The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) is deeply concerned about the recent announcement by the Honourable Minister of State Petroleum and the Nigerian National Petroleum Company Limited (NNPC Ltd.) regarding the pricing of Premium Motor Spirit (PMS) in the country.
The statement that PMS prices will be determined by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA) of 2021, is a significant policy shift with far-reaching implications for the Nigerian economy. NACCIMA condemns this sudden change without proper notice or stakeholder engagement.
NACCIMA is particularly alarmed by the potential impact of this decision on businesses, consumers, and the overall economic landscape. The deregulation of PMS prices, coupled with the influence of foreign exchange (forex) illiquidity, is likely to result in significant volatility and unpredictability in fuel prices. This, in turn, will have a cascading effect on the cost of goods and services across all sectors of the economy.
The possibility of a sharp increase in fuel prices, potentially exceeding the initial increase from 600 naira to 800 naira at NNPC station, is a grave concern. This will undoubtedly lead to a surge in inflationary pressures, eroding the purchasing power of consumers and putting immense strain on businesses already struggling to navigate the challenging economic environment.
Furthermore, NACCIMA is deeply concerned about the impact on the labour market. The earlier press release by labour unions, demanding the withdrawal of the previous price increase, is a clear indication of the potential for social unrest and agitation. A significant price hike in PMS, without proper stakeholder engagement and mitigation strategies, is likely to further exacerbate tensions and disrupt economic activities.
NACCIMA calls on the Honourable Minister of State Petroleum, the NNPC Ltd. and the relevant government authorities to engage with stakeholders, including the business community, labour unions, and consumer advocacy groups, to develop a comprehensive plan to address the potential consequences of this policy change. A more gradual and well-planned approach to PMS pricing is essential to ensure stability, predictability, and sustainable economic growth in Nigeria.
NACCIMA stands ready to work with the government and all relevant stakeholders to find a solution that protects the interests of businesses , workers and consumers alike. We must ensure that any policy changes in the energy sector are implemented in a manner that promotes the growth and development of the Nigerian economy.
Dele Kelvin Oye, Esq.
National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA)
Abuja, Nigeria.
5th September, 2024.
