Removal of petrol subsidy will grow Nigeria’s economy – LCCI

The Lagos Chamber of Commerce and Industry (LCCI), the premier chamber of commerce in Nigeria has commended the Federal Government’s removal of fuel subsidy as it will grow the country’s economy.

Unfortunately, previous regimes had shied away from this grave but nation-building decision. It is, however, noteworthy that industry regulators and operators are already implementing the subsidy removal adjustments, the LCCI said in a statement on Friday.

“The chamber is confident the removal will greatly impact the government’s coffers, reduce the outrageous cost of governance, improve accountability in the sector and impact government capacity to finance infrastructural development,” it said.

It said that they anticipate that the decision, if followed through appropriately, will result in improved investments, especially along its value chain, promote healthy competition and even ensure product availability.

“Other gains are growth in aggregate employment, weaken the undue pressure on the local tender, improve balance of payments and economic growth,” it added.

On Monday, President Bola Tinubu during his inaugural speech announced the removal of the petrol subsidy.

Barely three hours after the speech, fuel prices across the country surged by an average of 174.6 percent from their then price a month ago.

Read also: Nigeria can save $21bn from local oil refining, subsidy removal – IPMAN

Currently, fuel in Africa’s biggest economy is selling at an average of N526.7 per litre from an average of N191.8 per litre a month ago, according to BusinessDay’s calculation of NNPC’s new/old price list.

“Over the year, the chamber, like many reputable international institutions and local organisations, has consistently expressed its fears and concerns about the enormous fiscal burden the subsidy regime had placed on the nation and its financial wellbeing, which are known to all and sundry,” Michael Olawale-Cole, president of LCCI said in the statement.

According to him, the chamber appeals to Nigerians to express understanding and support the government in the proper implementation of this much-desired policy. “Also, we urge the government to express commitment to the welfare of the masses, especially the most vulnerable groups and industries.”

The chamber recommends that it can come in the form of palliative provisions and interventions for critical industries. “The government should also hasten to rehabilitate existing refineries – get them into proper functional state. It can thereafter completely sell them in an open, competitive bidding process or partly sell them using the Nigeria Liquefied Natural Gas model,” it said.

Olawale-Cole urged industry regulators to ensure a seamless transition particularly in terms of distribution channels and speedily address any violations, like tampering with meters that could thwart the efficient implementation of the policy. “Although, it is almost coming in as a footnote, the vexing issue of oil theft should also be addressed.”