Dangote’s petrol price reduction commendable, will boost innovation in energy sector- LCCI
Lagos Chamber of Commerce & Industry LCCI
Nike Popoola
Lagos Chamber of Commerce and Industry (LCCI) has said that Dangote Refinery’s proactive approach to addressing energy challenges deserves widespread recognition.
The Director-General, Dr. Chinyere Almona, said in a statement titled, ‘LCCI statement on petrol price reduction by Dangote Refinery.”
The statement said, “The Dangote Refinery’s proactive approach to addressing energy challenges deserves widespread recognition and encouragement as it sets a benchmark for excellence and innovation in Nigeria’s energy sector.
“Beyond the gesture by Dangote Refinery on fuel price reduction, Nigerians can actually begin to expect a lower price for petrol if the government decides to sustain the Naira for crude supply to local refineries to refine oil for the Nigerian market.”
The LCCI noted that the controversies surrounding business relationships in the oil and gas sector are gradually dissipating, bringing a sense of stability to the industry. However, the confusion and disruptions experienced in recent months have significantly impacted the economy and may require time to resolve fully.
Regrettably, it added, these disruptions were avoidable. It stated, kWe emphasize that the oil and gas sector is crucial to the nation’s economic stability and growth. It is, therefore, imperative that the sector is managed with greater efficiency and foresight to prevent such challenges in the future.”
According to the statement, “The Chamber has expressed serious concerns about the recent increases in fuel prices, which have left businesses struggling to cope with the escalating energy costs. These rising costs have rendered many products uncompetitive due to unaffordable consumer prices. Energy price hikes remain a significant driver of Nigeria’s headline inflation, which stood at 33.88% as of October 2024, further straining the economy and households.
“With the Monetary Policy Rate (MPR) at 27.25% (and likely to rise following the November MPC meeting), persistent inflation at 33.88%, a depreciated currency trading above ₦1,690 to the dollar, and an unemployment rate of 4.3% in Q2 2024, the recent reduction in petrol prices facilitated by the Dangote Refinery is highly commendable. This development reflects a significant demonstration of capacity and readiness to meet local petrol demand, offering much-needed relief amid prevailing economic challenges.”
Eventually, with local fuel becoming more competitive and readily available, we can completely discontinue fuel importation. We can only begin to imagine the massive savings for the government and a lessening of the burden on the citizens when we begin to save billions of dollars from the total removal of subsidies, zero debt to fuel importers, and no more queues and loss of man-hours at our filling stations. This can actually be a reality if the government can wield the political will and deploy the appropriate economic policies to implement the reforms in the oil and gas sector.
A full deregulation and implementation of the Petroleum Industry Act (PIA) can create a better-managed oil and gas sector capable of attracting needed investments, creating more jobs as more operators enter the market, and boosting oil production output, which means less pressure on foreign currency demand and more foreign exchange earnings to the government.
