Impact of subsidy removal on Nigeria’s economy will be enormous –LCCI

The removal of subsidy payment on petroleum products by the Nigerian National Petroleum Corporation (NNPC) will prove a major paradigm shift for the oil and gas sector in the country, the Lagos Chamber of Commerce and Industry (LCCI) has said.

Muda Yusuf, the LCCI Director General, disclosed in a statement on Sunday that the effects of the decision on the economy would be enormous.

“However, it is vital to ensure that this new policy direction will be entrenched so that there will be no contemplation of any form of reversal.

“We are aware that similar attempts to undertake this crucial reform in the past had not been successful.   However, we are confident that in the current dispensation, this will not be the case.”

Yusuf said swift efforts should be taken to perfect the policy process with relevant legislation, further stating that such a legislative review would harmonise the reform with some extant laws.

The LCCI boss cited related legislations such as those backing up the establishment of Petrol Subsidy Fund, the Petroleum Product Pricing and Regulatory Agency and the Petroleum Equalisation Fund as examples.

“It is imperative to ensure clarity on access to foreign exchange for petroleum marketers to import petroleum products.

“Operators [who are currently in a quandary on this matter] are eagerly awaiting guidelines from the Central Bank of Nigeria on this critical aspect of access to forex for the importation of petroleum products.”

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He lauded the NNPC’s promise to involve the private sector in the operation of Nigeria’s state-owned refineries in the future.

“This is another laudable initiative which will ensure that these national assets are put to use for the growth and development of our economy,” the LCCI boss said.

A vital element of the oil and gas industry, Mr Yusuf observed, was a total deregulation of the sector.

He affirmed that this was the essence of the Petroleum Industry Bill “which, regrettably, has got stuck in the legislative processes for close to two decades.”

Yusuf expressed the optimism that deregulating the downstream sector would create resources for investment in critical infrastructure including rail, power, roads as well as health and education sectors.

“Nigeria has been in the business of oil for over 50 years, but we don’t have any private refineries operating on a commercial scale. This is a big issue.

“No oil-producing country imports refined petroleum products on a scale that we do in Nigeria.  It is inexcusable.”

 

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