LCCI STATEMENT ON TRANSPARENCY ON THE DOWNSTREAM SECTOR

 The Lagos Chamber of Commerce and Industry views with concern incidents of speculation around the pricing of PMS and the opaqueness in the pricing mechanism of petroleum products in the downstream sector. The Chamber is also worried by the likely implications of the dominance of a monopoly supplier like the NNPC Limited on competition.

The Chamber maintains the support it gave the government on fuel subsidy removal, and it is not unaware of the impact of the FX rate harmonization on the landing cost of fuel. LCCI, therefore, urges the regulator to strengthen issues around transparency in pricing in conjunction with other critical stakeholders. By reinforcing transparency, the regulator consciously promotes competition and market-determined prices and prevents a return to fuel subsidies.

To guarantee competition, the regulator should ensure that NNPC Limited, as the historical sole supplier and the supplier of last resort, does not use its dominant market supply position to keep new importers out of the market by supplying products at a price that is not reflective of either international import prices or the current foreign exchange rate.

The Chamber advocates for an increase in FX supply to the investors’ and exporters’ FX (I&E) window to check the excessive influence of FX demand backlog on prices, especially in the short run.

DR CHINYERE ALMONA, FCA

DIRECTOR GENERAL

LAGOS CHAMBER OF COMMERCE & INDUSTRY

14 JULY 2023