Group speaks on possibility of crashing petrol price in Nigeria

• The federal government was asked by LCCI to continue implementing naira payments for crude oil
• The LCCI president mentioned that total deregulation of the oil and gas sector could help lower prices
• He claimed that the full execution of the Petroleum Industry Act (PIA) would spur reforms

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The Lagos Chamber of Commerce and Industry (LCCI) urged the federal government to sustain the implementation of naira payments for crude oil sales to the Dangote Refinery and other local refineries.

Complete deregulation of the oil and gas sector might help lower prices, according to the president of the LCCI. Photo Credit: Contributor
Source: Getty Images

Recall that the government had stated that the sales of crude oil in naira to Dangote Refinery and other local refiners started from October 1st, 2024.

At the press conference to address the obstacles affecting the organized private sector, Gabriel Idahosa, president of the LCCI, made this statement.

Deregulation to aid price reduction

The LCCI president said that complete deregulation in the oil and gas industry might aid in price reduction.

“The end to the federal government’s petrol pricing interventions is long overdue. Allowing a direct purchase mechanism that allows marketers of premium motor spirit (PMS) to negotiate commercial terms directly with refineries is quite commendable.“With more competition and a smoother supply chain in the market, we may see lower prices soon if the oil and gas sector is fully deregulated and well-driven by the regulators in the sector,” he said.

He added that the Petroleum Industry Act's (PIA) full implementation would encourage changes that would revolutionize the nation's economy, Daily Trust reported.

“We urge the government to summon the courage to be consistent with the oil and gas sector reforms and implement the Petroleum Industry Act (PIA) fully. We see the long-term gains of these reforms if they are implemented under a conducive regulatory environment,” he added.

The cost of living has increased due to the federal government's monetary policy, he emphasized, adding that non-cash actions and fiscal stimulus will lessen the impact.

“In the situation we find ourselves in, we urge the government to stay focused and more vigorous regarding the ongoing interventions like removing some taxes, the transition to Compressed Natural Gas (CNG) mobility, the Crude for Naira scheme, and the suspension of some import duties.“The CNG mobility initiative must be supported with CNG refuelling stations nationwide and credit facilities to support quick conversion and usage,” he said.

World Bank sends warning against petrol price increase

Legit.ng reported that the World Bank has warned that a further spike in the price of Premium Motor Spirit (petrol) could endanger Nigeria's already precarious economic recovery after fuel subsidies were eliminated.

In May 2023, President Bola Tinubu formally declared that gasoline subsidies would no longer be provided. Since then, prices have soared from N175 per liter to over N1,000 nationwide.

As macroeconomic and fiscal reforms start to take hold, Nigeria's economy is expected to develop by 3.3 percent in 2024 and 3.6 percent in 2025–2026.

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Source: Legit.ng