Expert Reacts as Petrol Price Increases Again, Gives Realistic Solutions

• Muda Yusuf said that the most recent increase in petrol prices at present is regrettably ill timed
• The director, Center for the Promotion of Private Enterprise, said Nigeria's economy is not ready for complete deregulation
• He made the statement as petrol prices across different regions increased reaching N998 and N1,030 per litre

In light of the current challenging economic circumstances, the Centre for the Promotion of Private Enterprise (CPPE) stated on Wednesday, October 9, 2024 that the most recent increase in the price of gasoline is unfortunately "ill timed."

According to Premium Times, numerous Nigerian National Petroleum Company Limited (NNPC Ltd.) locations in Lagos and Abuja saw an increase in petrol pump prices on Wednesday, reaching N998 and N1,030 per litre, respectively.

The latest event transpired following the NNPC's resolution to terminate its exclusive procurement contract with Dangote refinery.

Expert reacts

The director of CPPE, Muda Yusuf, in a signed statement, said that the Nigerian economy is not ready for complete deregulation and market principles.

He asserted that political, social, and economic factors influence policy decisions.

Yusuf said:

“Commercial considerations should not completely override these considerations. There is always a place for political economy in the interest of the vulnerable segments of society. The Nigerian economy is not ripe for full-blown deregulation and market principles on all fronts. The social cost of such policy choices are typically very high,”

“Over one hundred million people are wallowing in various variants of poverty. There is also an issue of policy sequencing. The present administration has presented an economic stabilisation bill to the national assembly. The bill is expected to bring some relief to the citizens and businesses.”

What FG could have done

Yusuf said before introducing the increase in fuel prices, it would have been preferable to wait for the suggested mitigating measures to take effect and gather traction.

“What the economy needs at this time are measures to ease the current economic and social challenges; not policies that would aggravate them.

“It is desirable at this time to urgently cut import duties and taxes by a minimum of 25% on all industrial raw materials, passenger buses of 18 seater and above and cars of 2000cc engine capacity and below,” he said.

Importation should be encouraged

Yusuf suggested capping the customs duty exchange rate at N1000 per dollar in order to lower the currently exorbitant cost of imports.

“Relevant legislation should be amended to that effect. This is without prejudice to the fiscal policy measures contained in the economic stabilisation plan. The government must be ready to trade off some revenue in the current situation,” he added.

Why Dangote cannot crash fuel price

Legit.ng earlier reported that an expert in the oil and gas industry asked the Nigerian Midstream and Downstream Petroleum Regulatory Authority to resist pressure, arguing that the country was not ready to stop importing refined petroleum products.

This came after the NMDPRA chief executive, Farouk Ahmed, made accusations that the Dangote refinery wanted him to stop granting licenses for petrol imports, which prompted the experts to make this statement.

According to Ahmed, he turned down the request to prevent monopolies and guarantee national energy security.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.