The Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Government to peg import duties at an exchange rate of N1,000/$ to stabilise costs for manufacturers who rely on imports, boost productivity and enable long-term planning.
The chamber, in a statement signed by its President, Mr Gabriel Idahosa, in reaction to the new fuel price hike, also proposed that crude oil supplied to refineries in naira be also pegged at an exchange rate of N1,000 to significantly lower the cost of petrol for end users.
Describing the nation’s business environment as becoming too tense for businesses to thrive, the chamber argued that a fixed rate would lower production costs, leading to increased output and job creation.
Besides, the chamber added, it would benefit the broader economy by fostering growth in related sectors like logistics and retail, ultimately supporting Nigeria’s economic stability and expansion.
LCCI also argued that besides significantly lowering the cost of petrol for end users, thereby reducing logistics and transportation expenses; pegging crude oil supplied in naira would also stimulate economic activity and help alleviate the current financial hardships faced by Nigerians.
Describing the nation as being at a crossroads with policy directions, the chamber expressed concerns that the latest increase in petrol pump prices is gradually turning Nigeria into a business environment that is too tense for businesses to thrive.
It noted that since the inception of this administration, petrol prices had gone up by about 430 percent to date, a development, it believed, has constituted a stumbling block to business growth.
According to the group, businesses have continued to suffer from increasing burdens of rising operating costs incurred on logistics, power supply, scarcity of forex for critical input and inflated costs on third-party sourced services.
It, therefore, warned that the situation might worsen in the coming months, due to a thriving speculative environment, harsh regulatory ecosystem, unguided controversies, persistent insecurity challenges and weakening purchasing power that restrains demand for goods and services.
The chamber noted that while the recent hike could be part of government’s plans to fully deregulate the oil and gas sector, the dynamics and controversies surrounding the steps have continued to create most of the distortions being experienced in the business environment, a development, it argued, has made businesses operate under dark clouds of uncertainties.
“It has become difficult to understand the plans and moves taken by the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation Limited and the various oil and gas sector regulators in the face of recent happenings.
“The controversies surrounding the working relationship between NNPCL and the Dangote Refinery are equally confusing,” the group stated.
It, therefore, called on the Federal Government to adopt multi-pronged approach, involving social, political and economic considerations, in addressing the challenges in the sector.
One of such, the chamber stated, is for the government to come clean on whether fuel subsidies have been removed entirely or partially and also let Nigerians know the quantity of fuel consumed locally.
It also stressed the need for the country to increase crude oil production and reduce oil theft to ensure her crude does not get to neighbouring countries where such crude is refined and imported back to Nigeria.
“We should implement the Petroleum Industry Act (PIA) to support a fully deregulated oil and gas sector. This will reduce the uncertainties and irregularities in the sector, enhance the sanctity of contracts and attract foreign investments,” the chamber added.
