The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has raised serious concerns over the total deregulation of petrol prices, warning that it could lead to inflationary pressures and adverse consequences for businesses and consumers alike.
Following the government’s recent declaration that it would not fix petrol prices, NACCIMA called for a more cautious approach. The association emphasized that an unregulated fuel market could exacerbate inflation, increase the cost of goods and services, and erode the already fragile purchasing power of Nigerian consumers.
During a media briefing on Thursday, Heineken Lokpobiri, the Minister of State for Petroleum (Oil), announced that petrol prices would no longer be controlled by the government as the sector had been deregulated under the Petroleum Industry Act (PIA) of 2021. Lokpobiri noted that the current fuel scarcity across the country was not a result of government intervention in pricing but market forces at play.
However, NACCIMA, under the leadership of its president, Dele Kelvin Oye, expressed concerns on Friday about the far-reaching implications of this decision. According to Oye, the free-market determination of Premium Motor Spirit (PMS) prices, without adequate stakeholder engagement or preparation, could lead to severe economic instability.
Oye warned that the deregulation, particularly in the context of Nigeria’s ongoing foreign exchange (forex) challenges, would likely result in unpredictable and volatile fuel prices. He added that businesses, already struggling with the economic downturn, could face additional strain, and consumers, who have seen fuel prices jump from ₦600 to ₦800 per litre at Nigerian National Petroleum Company (NNPC) stations, may have to brace for further increases.
“NACCIMA is particularly alarmed by the potential impact of this decision on businesses, consumers, and the overall economic landscape. The deregulation of PMS prices, coupled with the influence of forex illiquidity, is likely to result in significant volatility and unpredictability in fuel prices. This, in turn, will have a cascading effect on the cost of goods and services across all sectors of the economy,” Oye said.
He added that the possibility of further increases in fuel prices could lead to a surge in inflation, which would erode the purchasing power of consumers and put businesses under immense pressure. Oye stressed that this could worsen an already dire economic situation, pushing the country closer to economic instability.
NACCIMA also voiced concerns about potential social unrest, pointing to previous protests led by labour unions against fuel price hikes. The association believes that without a phased and well-communicated approach to deregulation, social agitation could intensify, further disrupting economic activities and causing widespread discontent.
In response to these concerns, NACCIMA has called on the Minister of State for Petroleum, NNPC Ltd., and other relevant government authorities to take a more deliberate and gradual approach to deregulation. The association urged the government to engage with key stakeholders, including the business community, labour unions, and consumer advocacy groups, to develop a sustainable and inclusive plan for adjusting petrol prices.
“NACCIMA affirms its willingness to collaborate with the government to find solutions that protect the interests of businesses, workers, and consumers. We believe that any policy changes in the energy sector must be carefully managed to support Nigeria’s broader economic development goals,” Oye stated.
As Nigeria continues to navigate the complexities of deregulating its petroleum sector, NACCIMA’s warning points to the importance of thoughtful policymaking. Ensuring economic stability, preventing social unrest, and fostering sustainable growth will require the government to adopt a balanced approach that takes into account the concerns of all stakeholders.
