Victor EzejaChief Executive Office, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has decried the latest hike in pump price of Premium Motor Spirit (PMS) also known as petrol, saying it is ill-timed.
In a statement issued in reaction to petrol price hike, Dr Yusuf said the action does not take cognizance of the prevailing economic hardship in the country.
Join our WhatsApp ChannelPrime Business Africa had reported that the Nigeria National Petroleum Company (NNPCL) increased the pump price of petrol at its retail outlets across the country. It adjusted the price to N1,030 per litre in Abuja and N998 in Lagos from around N897.
Analysts and other stakeholders in the downstream oil and gas industry have said the price adjustment marks the beginning of the deregulation of the market.
However, Dr Yusuf said the Nigerian economy is not yet ripe for “full-blown deregulation.”
According to him, the social cost of the policy is very high. He stressed that there is a need to consider the impact of every policy on the vulnerable segments of society and not just focusing on the commercial aspect.
“The latest increase in PMS price is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions,” Yusuf lamented.
“It is important to stress that social, economic and political considerations matter in policy choices.
“Commercial considerations should not completely override these considerations. There is always a place for political economy in the interest of the vulnerable segments of society.
“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.
“There is also an issue of policy sequencing.
“The present administration has presented an Economic Stabilisation Bill to the national assembly.
“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.”
READ ALSO: Cost Of Living Worsens As Nigerians Grapple With Biting Petrol Price Hike
He pointed out that what the economy needs at this time are measures to ease the current economic and social challenges, not policies that would worsen them.
Nigerians have endured series of petrol price hikes in the last 18 months. From N198 per litre as at May 2023, it has jumped by over 400 per cent, with the attendant implication on cost of things across the country including food, transportation and other essential items.
Commenting on the general cost of things, the CPPE CEO called on the Nigerian government to urgently cut import duties and taxes by at least a minimum of 25 per cent on all industrial raw materials, passenger buses of 18-seater and above and cars of 2000cc engine capacity and below.
Peg Customs Duty Exchange Rate at N1,000/$
The economic expert also reiterated his call on the government to fix customs duty exchange rate at a maximum of N1,000 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,” he added.
“The government must be ready to trade off some revenue in the current situation. There is a need to seek to achieve the maximization of the welfare function for citizens and the productivity function for businesses. The government should not be too fixated on revenue maximization,” he said.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
