The Lagos Chamber of Commerce and Industry (LCCI) has urged the Tinubu administration to reduce petrol pump prices by 15 to 20 percent for six months, warning that stabilising fuel prices at their current high levels would do little to ease the economic hardship facing businesses and households.
The chamber said the proposed intervention should go beyond preventing sudden increases in petrol prices to deliver measurable reductions in energy and transportation costs, which continue to put pressure on Nigerian businesses.
The LCCI made the demand while responding to the federal government’s planned petrol price-stabilisation mechanism, which includes a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol for 30 days.
The chamber welcomed the initiative but argued that a price ceiling alone would not guarantee lower pump prices for consumers or significantly reduce the operating expenses of businesses.
Its Director-General, Chinyere Almona, said the government should work with domestic refiners, petroleum marketers, regulators and other industry stakeholders to implement a six-month programme targeting a 15 to 20 percent reduction from the prevailing national weighted-average petrol price.
According to the chamber, the reduction should be based on independently verified supply costs, prevailing market conditions and measures capable of sustaining lower prices without undermining the commercial viability of operators.
The LCCI said Nigerian businesses were already grappling with high electricity tariffs, the cost of running generators, rising transportation expenses and expensive financing, warning that further increases in petrol prices could worsen production costs, weaken consumer purchasing power and undermine the competitiveness of local enterprises.
It maintained that the success of the government’s intervention should be measured not merely by its ability to prevent sudden price increases but by whether businesses and households experience meaningful and sustained reductions in energy costs.
The chamber also warned that a price-stabilisation mechanism that keeps petrol prices high without a clear reduction strategy would offer limited relief to businesses struggling with persistent operating challenges.
It urged the government to address the underlying factors driving domestic petrol prices, including crude oil supply uncertainties, foreign exchange volatility, distribution bottlenecks and avoidable logistics expenses.
The LCCI called for predictable crude oil supplies to domestic refineries through transparent and commercially viable arrangements, saying reliable access to crude could reduce procurement uncertainties, foreign exchange exposure and unnecessary logistics costs.
It also recommended accelerated investment in compressed natural gas (CNG) and electric vehicle infrastructure to reduce the economy’s dependence on petrol and lower the cost of transporting goods and people.
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On petroleum distribution, the chamber urged the government to improve storage facilities, remove transportation bottlenecks and tackle unlawful charges and rent-seeking practices that increase the final pump price paid by consumers.
It further identified exchange-rate stability as a critical factor in achieving sustainable reductions, noting that fluctuations in the foreign exchange market and international oil prices affect domestic petroleum supply costs.
The chamber, however, cautioned that the proposed price-smoothing arrangement could create additional financial risks if refiners and importers were required to absorb temporary increases in supply costs and recover the amounts later.
It warned that without transparent accounting and clearly defined limits, accumulated cost obligations could eventually trigger renewed increases in petrol prices, defeating the purpose of the intervention.
The LCCI therefore called for clear rules governing the introduction and withdrawal of the stabilisation mechanism, including how deferred costs would be calculated, accounted for and recovered.
It said the government must ensure that the arrangement did not impose unlimited losses on refiners and importers, discourage private investment or create conditions that could lead to fuel shortages.
The chamber acknowledged that Nigeria could not completely shield its domestic petroleum market from movements in international crude oil and refined-product prices.
However, it insisted that domestic inefficiencies should be addressed to prevent avoidable costs from worsening the impact of global market fluctuations on Nigerian consumers and businesses.
The LCCI said local enterprises had continued to demonstrate resilience despite difficult operating conditions but warned that resilience alone could not sustain their competitiveness indefinitely.
It stressed that lower energy costs, efficient logistics, commercially viable investments and predictable government policies were necessary to protect jobs, improve the business environment and support economic growth.
The chamber said the ultimate test of the government’s petrol price intervention should be whether businesses spend less on fuel, transportation and distribution, while households experience tangible relief from the rising cost of living.
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