…says price stability not enough without reduction The Lagos Chamber of Commerce and Industry (LCCI) has commended the Federal Government’s
…says price stability not enough without reduction
The Lagos Chamber of Commerce and Industry (LCCI) has commended the Federal Government’s proposed petrol price-stabilisation mechanism but says stability at a high price will not restore business competitiveness.
The chamber, in a statement by Chinyere Almona, its director general, welcomed the plan to set a ceiling of N1,350 per litre on ex-gantry or landing cost of petrol, with monthly reviews and public disclosure.
It said the proposal acknowledges that volatility in energy prices hurts the wider economy and provides predictability without returning to subsidy.
However, Almona warned that the arrangement may only cushion businesses against sudden spikes without bringing down already elevated energy costs.
“While price stability is desirable, stability at an excessively high price is not sufficient to restore business competitiveness.”
“Nigeria needs a mechanism that delivers both price stability and a progressive reduction.”
According to the director general, Nigerian businesses are contending with high electricity tariffs, alternative power generation costs, rising logistics, expensive financing and other structural constraints.
Petrol price increases compound pressures on distribution, transportation and production, she noted.
She also flagged that requiring refiners and importers to absorb cost increases and recover later may smooth prices but could create deferred obligations that eventually push prices up again if not transparently managed.
To address this, the DG urged the Federal Government to complement the stabilisation mechanism with a six-month Petrol Price Reduction Programme to cut pump prices by 15-20 percent from prevailing national weighted average.
She recommended five measures to make the programme credible:
First, improve predictable crude supply to refineries under transparent, commercial arrangements to reduce forex exposure.
Second, boost CNG and electric vehicle infrastructure to cut transportation costs.
Third, reduce logistics and distribution bottlenecks and eliminate rent-seeking that inflates pump price.
Fourth, maintain exchange-rate and macroeconomic stability to improve price predictability. Fifth, protect commercial viability and ensure fiscal transparency with clear rules for entry, exit and treatment of accumulated obligations.
“Resilience alone cannot sustain competitiveness indefinitely. Businesses need an environment where energy is more affordable and policy delivers tangible benefits,” she said.
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Josephine Okojie-Okeiyi is a journalist with over five years’ reporting experience. She writes on industry, agriculture, commodities, climate change, and environmental issues. She is fellow of Thomson Reuters Foundation and Bloomberg Media Initiative for Africa.