The Lagos Chamber of Commerce and Industry (LCCI) has condemned the Petroleum Products Pricing Regulatory Agency for continuing to fix the price of petrol after the deregulation of the downstream oil sector. It described the action as inconsistent with deregulation.
Toki Mabogunje, president of the LCCI said, “Price fixing by the Petroleum Product Pricing Regulatory Agency is not consistent with the philosophy of a market driven downstream sector. It is a contradiction in terms.”
In a statement on the quarterly press conference of the chamber on Tuesday, the chamber cautioned the federal government against ontinued use of debt to meet financial obligations, saying the approach was not sustainable as the country was still struggling to generate sufficient revenues.
In the statement entitled ‘Text of LCCI Quarterly Press Conference’, Mabogunje enjoined the government to explore equity financing to bridge fiscal deficit.
“We call for caution on the continued use of debt to meet fiscal obligations, especially at a time the country is struggling to generate adequate revenue,” she said.
Mabogunje noted that data from the Debt Management Office showed that public debt stock increased by 4.5 per cent to N28.63tn as of March 31, 2020, from N27.40tn as of December 31, 2019.
With additional credit facilities already secured from the International Monetary Fund and the African Development Bank, she predicted that the country’s debt stock could reach N33tn by the end of the year, which was equivalent to 22 per cent of the Gross Domestic Product.
Commenting on the recent adjustment of the exchange rate from N360/$ to N381/$, the LCCI president said the move would improve transparency in forex management.
She pointed out that the unification of the exchange rate would affect the cost of production, investment, government budget that had earlier been predicated on N360/$, project costs with foreign currency components and external debt obligations by corporates and government.
“It would boost the naira value of oil revenue, reduce exchange rate premium between official and parallel market rates, discourage round-tripping, ease the liquidity crisis in the forex market and correct external imbalances,” she added.
Mabogunje commended the government on the deregulation of the downstream sector, saying market-based pricing regime was the right thing to do.
She noted that the non-passage of the Petroleum Industry Bill had deprived the oil sector and the broader economy of enormous private investment inflows into the sector.
“The Lagos Chamber calls for an expeditious consideration and passage of the revised bill by the National Assembly,” she said.