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By Merit Ibe
The Lagos Chamber of Chamber and Industry (LCCI) has said Federal Government’s decision to delay the petrol subsidy removal will have significant implications for the implementation of the Petroleum Industry Act (PIA), which may require amendments.
The National Economic Council (NEC), had last Thursday stated that the timing of the removal should not be now given the stretching economic uncertainties facing both the business and the household sectors.
Director General of the chamber, Dr. Chinyere Almona, who made the remark in response to NECs statement, said the chamber believes the economic well-being of Nigerians, private and corporate, should be the focus of the government.
She lamented that these conditions are quite inimical to growth, adding that the chamber was also concerned about the huge cost of petrol subsidy over the years and its implications on social and infrastructural developments.
Analysing the cost, Almona noted that government has spent more than N10 trillion of its scarce resources on petrol subsidy in less than two years, with a budgeted cost of petrol subsidy at N3.36 trillion in the first half of 2023.
The DG is of the view 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, noting that this is largely unsustainable.
“Conditions inimical to growth include debilitating inflation, currently at 22.04%, worsening exchange rate, disturbing level of unemployment, high-interest rates and uncompetitive high operating costs. Therefore, there is 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.
“We further note that the delay will have significant implications for the implementation of the Petroleum Industry Act (PIA), which may require amendment,” Almona said.
She called for government’s focus on the completion of the turnaround maintenance of the local refineries, as well as ensure that well-equipped modular refineries are empowered and supported.
Almona also noted that the chamber recommends 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.
