Naira-for-crude: LCCI urges govt to peg exchange at $/N1,000

The Lagos Chamber of Commerce and Industry urges the Federal Government to provide crude oil to local refiners at a $/N1,000 exchange rate, to tackle the rising petrol prices.

In a statement, the LCCI President, Gabriel Idahosa, argued pegging the exchange rate for crude sales to local refineries would lower the cost of fuel production, thereby reducing the price of petrol at the pump and easing the burden on businesses and consumers.

Idahosa said, “Crude oil supplied to refineries in naira should be pegged at an exchange rate of N1,000 to one USD. This would significantly lower the cost of petrol for end users, thereby reducing logistics and transportation expenses.

“The ripple effect would stimulate economic activity and help alleviate the current financial hardships faced by Nigerians. It will also significantly contribute to the reduction in food inflation since transport costs are a major component of food production and delivery costs.”

He noted that petrol costs had soared by 430 per cent since President Bola Tinubu was sworn in on May 29, 2023, which had crippled business operations.

The Nigerian National Petroleum Company Limited increased the Premium Motor Spirit pump price from N897 to N1,030 per litre on Wednesday, the second increase in one month.

The LCCI urged the government to clarify its position on the complete or partial removal of fuel subsidies.

The chamber claimed that the uncertainty surrounding the policy, increasing operating costs, and a scarcity of foreign exchange have made it difficult for businesses to make long-term plans.

“The government must come out clean on whether fuel subsidies have been removed entirely or partially,” Idahosa said. “The regulatory agencies in the oil and gas sector should let us know what fuel is consumed locally in Nigeria.”

The chamber also reiterated the need to fully implement the Petroleum Industry Act, which would streamline operations in the oil and gas sector and attract foreign investments.

Also, the LCCI recommended increased crude oil production and reduced oil theft to ensure Nigeria’s crude does not reach neighbouring countries, where it is refined and imported back to Nigeria.

Idahosa highlighted the transition to Compressed Natural Gas mobility as a key intervention and called for widespread CNG refuelling stations and financial support to ease the conversion process for businesses and consumers.

The LCCI called on the government to communicate its economic policies, as businesses struggled to navigate an environment of uncertainty, rising inflation, and increasing costs.

“A clear policy direction will provide the certainty businesses need to make informed decisions and plan for the future,” the chamber stated.