• Friday, March 29, 2024
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LCCI urges FG to set up pricing window to mitigate impact of petrol deregulation

LCCI urges FG to set up pricing window to mitigate impact of petrol deregulation

The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government to set up a social pricing window for vulnerable Nigerians to mitigate the impact of its deregulation policy on that segment of the society.

Muda Yusuf, director-general, LCCI, told journalists in Lagos that government at all level must prioritise mass transit to reduce the impact of the removal of subsidy on Premium Motor Spirit (PMS) on transportation cost.

Yusuf noted that the removal of subsidy on PMS also known as petrol would cause some challenges which could be for a short term if the right programmes are put in place.

“The deregulation policy is something that should be sustained and we should be looking at how we can mitigate the short term challenges on Nigerians,” he said.

Read Also: We have enough petrol supply for the next 40 days- NNPC

In the short term, Yusuf said a social pricing window for the vulnerable segment of society should be explored.

“The way we think this can work is to designate all the Nigerian National Petroleum Corporation (NNPC) stations and provide a social pricing mechanism in NNPC stations alone,’ he said.

According to the DG, the federal government can set aside a certain amount to subsidise in these windows and it should not be more than 10 percent of the total consumption of fuel in the short term before it transit into full deregulation.

”For instance, if our total consumption is 50 million litres, we can earmark like five million litres to serve these vulnerable groups through the NNPC stations which we have all over the country,” he explained.

According to him, other petrol stations should be allowed to function fully within the deregulation framework and provide services for more economically empowered persons.

He said vulnerable people who can afford to queue for some hours can use the NNPC stations but those who can pay can go straight to other stations to buy fuel.

He added that this is a model that Nigeria can consider and it will also bring some comfort to organised labour that something is being done immediately to assist the vulnerable groups in the society.

“Of course there will be issues of corruption but we have to live with some of these things in this transitional phase so that we can move forward, otherwise the government will be seen as being very insensitive.

“That is why I think that we should have that kind of social pricing window to take care of vulnerable Nigerians using only the NNPC stations,” Yusuf said.

He noted that another way to mitigate the impact was to look at the challenges it poses to cost of transportation and energy cost for Small and Medium Enterprises in particular.

Yusuf said: “We need to look at the issue of mass transit once again. We need to ensure that we structure our budgets both at the national and sub-national levels to ensure that we prioritise mass transit.

“We also need to accelerate the process of ensuring that we produce refined petroleum products domestically and to accelerate that, this deregulation has to be in place.

“I have heard arguments that we should allow refineries to be working before we deregulate but that is not going to work.
Unless we have a deregulation policy in place, it will be difficult to attract direct capital into the refineries.

“So deregulation should come before attracting investment to the refineries because as things stand, we cannot depend on government-owned and managed refineries. It has been proven that this is not sustainable. We need this policy reform to make that happen.”