The Lagos Chamber of Commerce and Industry (LCCI) has expressed reservation on Federal Government FG’s decision to delay removal of the petrol subsidy, stressing that making such move is ill-advised.
LCCI which revealed that the decision, as communicated by the National Economic Council (NEC), to Nigerians declared that although, the timing of the removal should not be now “given the stretching economic uncertainties facing both the business and the household sectors”.
The business think-tank body in a press statement issued Sunday and signed by its Director General Dr Chinyere Almona, as well as circulated among newsmen said that LCCI believed that the economic well-being of Nigerians, private and corporate, should be the focus of the government.
“These include debilitating inflation, currently at 22.04 per cent, worsening exchange rate, disturbing level of unemployment, high-interest rates and uncompetitive high operating costs. These conditions are quite inimical to growth” the statement lamented.
Almona stressed that the Chamber “is concerned about the huge cost of petrol subsidy over the years and its implications on social and infrastructural developments”, noting that the government has spent over N10 trillion of its scarce resources on petrol subsidy in less than two years.
She added that the budgeted cost of petrol subsidy was N3.36 trillion in the first half of 2023, saying that with the decision to delay the subsidy removal, it becomes imperative to make provisions for an additional N3.5 trillion in the supplementary budget for the incoming administration, asserting that this
was “largely unsustainable”.
The statement indicated that there was a great and urgent need for the government to thoroughly evaluate its economic realities and adequately put plans and measures in place to mitigate the negative consequences of subsidy removal on Nigerians in the short term.
It noted that the delay would have significant implications for the implementation of the Petroleum Industry Act (PIA), which may require amendments.
“The government needs to focus on the completion of the turnaround maintenance of our local refineries, as well as ensure that well-equipped modular refineries are empowered and supported” Almona said.
Meanwhile, the Chamber has recommended that government must actively engage all stakeholders on the implementation of the subsidy removal, detailing milestones that will be achieved (particularly in terms of social and infrastructural developments) with the proceeds from petrol subsidy removal and providing short-term measures to mitigate its adverse effects.