CPPE faults petrol price hike, says economy not ripe for full deregulation

The Centre for the Promotion of Private Enterprise (CPPE) has decried the recent increase in petrol prices, describing it as “ill-timed and insensitive” to Nigeria’s prevailing economic challenges.

Muda Yusuf, chief executive officer (CEO) of CPPE, spoke in a statement on Wednesday. 

Earlier today, the Nigerian National Petroleum Company (NNPC) Limited increased the price of premium motor spirit (PMS), also known as petrol, across its retail outlets.

TheCable observed that the price of the product increased to N998 per litre in Lagos on Wednesday — up from N855/litre.

Speaking on the development, Yusuf said the federal government should consider social, economic, and political factors in policy decisions, rather than solely focusing on commercial interests. 

The CPPE CEO said the price increase is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions.

“It is important to stress that Social, economic and political considerations matter in policy choices.  Commercial considerations should not completely override these considerations,” he said.

“The Nigerian economy is not ripe for full-blown deregulation and market principles on all fronts.

“The social cost of such policy choices is typically very high. This is an economy with very weak social safety nets. Over one hundred million people are wallowing in various variants of poverty.”

Yusuf said the country is also faced with the challenge of “policy sequencing”.

He said it would have been better for the government to implement the economic stabilisation bill before introducing the petrol hike.

“The present administration has presented an Economic Stabilisation Bill to the national assembly,” he said.

“The Bill is expected to bring some relief to the citizens and businesses. It would have been better to allow the proposed mitigating measures to be activated and gain traction before coming up with the petrol price hike.

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

‘FG SHOULD URGENTLY CUT IMPORT DUTIES, PEG EXCHANGE RATE’

Yusuf also said it is now important for the government to urgently cut import duties and taxes by a minimum of 25 percent on all industrial raw materials.

He added that the customs duty exchange rate should be fixed at a maximum of N1000 per dollar to reduce the current prohibitive 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,” Yusuf said.

“The government must be ready to trade off some revenue in the current situation.”

“There is a need to seek to achieve the maximisation of welfare function for citizens and productivity function for businesses.”

Yusuf also stressed that the government should not be fixated on revenue maximisation.