By Merit Ibe
Following the sharp increase in transportation and other costs arising from last week’s hike in fuel price, the Organised Private Sector (OPS) has urged the Federal Government to urgently put immediate and short-term measures in place to mitigate the pains of citizens.
The Nigerian National Petroleum Company Limited (NNPCL) had last week approved an upward review in the pump price of premium motor spirit nationwide. The approval took effect from Wednesday, May 31, the NNPCL said in a circular. The development comes days after the Bola Tinubu government’s declaration that it will put an end to the fuel subsidy regime.
Admitting that the increase was quite high and came as rude shock to the citizens, the OPS noted that these are some of the inevitable costs of reforms.
The Director, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said the reforms are needed to prevent the collapse of the economy, adding that things have to get worse before they can get better.
“Apparently things have to get worse before they get better. It would be painful initially, but it would progressively get better. As the supply side response improves, the prices will moderate. “
Yusuf explained that food and transportation account for over 50 per cent of household budget of the poor, saying something urgent needs to be done.
He said such measures should focus on reducing the cost of food, provision of cheaper public transportation options, improving power supply to reduce demand for fuel for electricity generators, incentives to promote the use of auto gas, reduction in import tariffs for intermediate products for food processing companies, eliminating taxes and levies on all agricultural inputs to boost food production and reduction in import tariffs on mass transit buses, among others.
The CPPE boss also opined that the NNPC pms pricing should be at least 15per cent less than the prices of private fuel stations, adding that this is necessary to signal social sensitivity by government.
Commending the Federal Government on the removal of subcidy, the Lagos Chamber of Commerce and Industry (LCCI),expressed confidence the removal will greatly impact the government’s coffers, reduce the outrageous cost of governance, improve accountability in the sector, impact government capacity to finance infrastructural development and to grow the economy.
President of the chamber, Dr Michael Olawale-Cole however urged the government to express commitment to the welfare of the masses, especially the most vulnerable groups and industries.
He said the help could 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 NLNG model.”
Appealing to Nigerians to express understanding and support the government in the proper implementation of this much-desired policy, he 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.
He also asked that the vexing issue of oil theft should also be addressed .
“The LCCI wishes to commend the Federal Government on the removal of fuel subsidy. 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.
“We 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.
Over the years, 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.”