LCCI Raises Alarm Over Soaring Fuel Costs and Real Sector Contraction
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona, has voiced deep concern regarding the escalating prices of petrol and diesel, with diesel reaching approximately N2000 per litre as of yesterday. Currently, petrol is retailing between N1350 and N1400 per litre, marking a significant increase that threatens business sustainability across Nigeria.
Unsustainable Trends and Government Call to Action
Dr Almona emphasised that this upward trend is unsustainable for businesses, urging the government to intervene promptly to avert a total collapse of the real sector. She stressed that any government action should focus on strategic market stabilisation rather than mere price suppression. Immediate priorities, according to her, should involve targeted, time-bound support for critical sectors such as transportation, agriculture, and Micro, Small, and Medium Enterprises (MSMEs) to mitigate inflationary spillovers, while avoiding inefficient blanket subsidies.
Currency Stabilisation and Policy Clarity
More critically, she highlighted the necessity of stabilising the naira through improved foreign exchange liquidity and enhanced policy coordination, given the strong exchange-rate pass-through into fuel pricing. Dr Almona also called on the government to signal policy clarity and consistency to reinforce investor confidence in the deregulated regime, ensuring a stable economic environment.
Economic Impacts and Structural Challenges
"While higher crude prices typically imply fiscal upside, Nigeria's benefits remain constrained by production limitations and structural inefficiencies," she stated. "The dominant impact is adverse, with cost-push inflation intensifying, industrial competitiveness weakening, and household purchasing power declining." She further explained that energy costs, as a major component of production and logistics, will continue to erode business margins and dampen economic expansion, reinforcing broader macroeconomic vulnerabilities.
Urgent Measures for Domestic Crude Supply
Dr Almona urged the Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) to urgently enforce domestic crude supply obligations under the Petroleum Industry Act. This includes ensuring consistent allocation of over 300,000 barrels per day to local refineries, particularly the Dangote Refinery. She noted that this must be complemented by a transparent and scalable naira-for-crude framework to reduce foreign exchange exposure, lower production costs, and stabilise output.
Regulatory Framework and Market Oversight
At the regulatory level, she called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to implement a clear, rules-based pricing framework. This framework should reflect verifiable cost fundamentals while preventing abuse of market dominance, without undermining the principles of deregulation. Dr Almona's statements underscore the urgent need for coordinated efforts to address the rising fuel costs and support Nigeria's struggling real sector.
