Petrol Stabilisation Plan: LCCI Demands 6-month Price Reduction Programme

The Lagos Chamber of Commerce and Industry (LCCI) has commended the federal government for its proposed petrol price-stabilisation mechanism aimed at shielding Nigerian businesses and households from fluctuations in international crude oil prices and foreign exchange rates.

In a press statement signed by its director-general, Dr. Chinyere Almona, the Chamber said it recognises the economic rationale behind the initiative, particularly at a time when rising energy and transportation costs are putting considerable pressure on businesses, weakening household purchasing power and undermining competitiveness.

“The proposal to establish a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol, with monthly reviews and public disclosure, represents an acknowledgement by the government that excessive volatility in energy prices has significant consequences for the wider economy,” Almona noted.

She also welcomed the intention to introduce greater predictability into petrol pricing without returning to the former fuel subsidy regime.

She however cautioned that price stability at an excessively high level is not sufficient to restore business competitiveness.

“While price stability is desirable, stability at an excessively high price is not sufficient to restore business competitiveness. Nigeria needs a mechanism that delivers both price stability and a progressive reduction in petrol prices over a defined period,” she said.

LCCI DG expressed concern that the proposed arrangement, in its present form, may cushion businesses against sudden increases without necessarily bringing down the already elevated cost of energy.

According to her, Nigerian businesses are contending with high electricity tariffs, substantial expenditure on alternative power generation, rising logistics costs, expensive financing and other structural constraints, with petrol price increases compounding pressures on distribution, transportation and production.

LCCI also noted that requiring refiners and importers to absorb temporary cost increases and recover them when market conditions improve may smooth price movements, but could create deferred cost obligations that may place renewed upward pressure on prices if not transparently managed.

The chamber urged the federal government to complement the stabilisation mechanism with a six-month Petrol Price Reduction Programme designed to deliver progressive, measurable and sustainable reductions in domestic pump prices.

Almona proposed that the government, working with domestic refiners, marketers, regulators and other stakeholders, should target a 15–20 per cent reduction from the prevailing national weighted-average price, subject to independently verified supply costs and market conditions.

She recommended five additional measures to ensure credibility: improved domestic crude supply to refineries under transparent commercial arrangements, accelerated deployment of CNG and electric vehicle infrastructure, reduction of avoidable logistics and distribution costs, maintenance of exchange-rate stability, and protection of commercial viability and fiscal transparency.

She stressed that the initiative should be evaluated not merely by how successfully it prevents sudden price increases, but by whether it contributes to lower operating costs and improved economic welfare.

“We welcome the government’s intervention to moderate price volatility, but the next step must be a credible plan to bring petrol prices down progressively, sustainably and transparently,” Almona said.