Fuel price hike: Nigerian economy not ripe for full-blown deregulation – CPPE

The Centre for the Promotion of Private Enterprise, CPPE, has condemned the latest fuel price hike by the Nigerian National Petroleum Company Limited.

This comes as NNPCL increased fuel pump prices from N1,030 and N998 per liter in Abuja and Lagos from N897.

Reacting to the latest fuel pump price hike, CPPE said Nigeria is not ripe for full-blown deregulation of petrol.

The Director of CPPE, Muda Yusuf, disclosed this in a statement to DAILY POST on Wednesday.

He said the latest fuel pump price hike is regrettable.

According to him, commercial considerations should not completely override political, social considerations.

“The latest increase in PMS price is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions. 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.

“What the economy needs at this time are measures to ease the current economic and social challenges; not policies that would aggravate them.

“It is desirable at this time to urgently cut import duties and taxes by a minimum of 25 percent on all industrial raw materials, passenger buses of 18-seater and above and cars of 2000cc engine capacity and below.

“The customs duty exchange rate should be fixed at a maximum of N1000/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.

“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.