LCCI: It’s Disturbing NNPCL, Dangote Refinery Have Not Resolved Terms of Collaboration

•Asks CBN to be sensitive to adverse impact of rate hikes on businesses

Dike Onwuamaeze

Lagos Chamber of Commerce and Industry (LCCI) said it found it disturbing that Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery were yet to resolve the terms of collaboration in the pricing and sale of refined petrol for the benefit of businesses in Nigeria.

The chamber expressed the view yesterday in a statement signed by its Director General, Dr. Chinyere Almona, titled, “LCCI Statement on Dealing with Unbearable High Inflation and Interest Rates.”

LCCI urged the monetary authorities to be sensitive and focused on the troubling issues of high inflation and exchange rate that had adverse effect on businesses.

Almona stated, “Beyond the pains of petrol price hikes, a bigger problem is the controversies about the pricing dynamics of both imported and locally refined petroleum products.

“It is disturbing to note that the NNPCL and the Dangote Refinery have not wholly resolved terms of collaboration for the good of our nation, Nigeria.

“The excuse by the CBN that the monetary policy rate was raised on fears of a petrol price hike is not a sustainable argument.

“We expect the government to tackle the issues to benefit the Nigerian economy in a timely manner, too.

“Energy and transportation prices have significantly contributed to core inflation.”

LCCI also urged the government to “accelerate energy reforms in order to improve electricity generation, reduce reliance on costly diesel and petrol, and ensure stable power supply for manufacturers and SMEs”,   by prioritising the transition to renewable energy sources to reduce production costs.

The chamber said it expected to see quick actions on the adoption of CNG mobility in Nigeria.

It tasked the government to improve transportation infrastructure to cut logistics costs through investment in rail and road networks that would ease the transportation of goods, thereby reducing price volatility in consumer markets. 

LCCI stated that “the volatility in the exchange rate market has amplified inflationary pressures by raising the cost of imported goods and services”. It called for a more transparent foreign exchange management to reduce speculation and stabilise the naira.

According to the chamber, “A stable exchange rate will help moderate imported inflation, especially in essential commodities and raw materials needed for local production.

“We reiterate our earlier recommendation that the CBN should work with the Nigeria Customs Service to fix the import duty exchange rate for a certain period to aid business decisions on importation.”

Commenting on the recent decisions of the CBN’s Monetary Policy Committee (MPC), Almona stated, “The marginal drop in the August 2024 headline inflation rate to 32.15 per cent, down from 33.40 per cent in July 2024, is on a good note.

‘While this represents a month-on-month improvement, the broader year-on-year comparison still highlights a troubling 6.35 per cent increase compared to July 2023, and the interest rate raised to 27.25 per cent both present a tense business environment.

“The marginal drop in inflation reflects some level of policy impact. Still, it is insufficient to address the deep-rooted challenges contributing to high inflation, particularly in food and core inflation categories.

“The LCCI remains concerned that food inflation surged to 37.52 per cent year-on-year, with core inflation reaching 27.58 per cent, both of which highlight severe pressure on the purchasing power of Nigerians.”

The chamber stated that while the marginal decline in the August inflation rate was a welcome development, the upward trend in year-on-year inflation highlighted the need for sustained policy responses to keep the pressure down.

LCCI stated, “We urge the government to adopt a holistic approach to address inflation by boosting local production, stabilising energy and transportation costs, and aligning monetary and fiscal policies.

“We advise that the monetary authorities remain sensitive and focused on these troubling issues because they adversely impact businesses in Nigeria.”