By Victor Ahiuma-Young
The umbrella body for employers in the country, the Nigeria Employers’ Consultative Association, NECA, has called for immediate rehabilitation of the four public refineries following the removal of subsidy on Premium Motor Spirit, PMS, commonly known as Petrol.
In a statement on Wednesday, NECA’s Director-General, Wale-Smatt Oyerinde, lamented it was worrisome to note that prices of other commodities had skyrocketed few hours after the President’s pronouncement of subsidy removal.
He said “The inaugural address of the President on fuel subsidy has generated heated reaction, with fuel queues returning to the petrol station and the prices of goods and services increasing astronomically. The increase, if not well managed could lead to an increase in the prices of goods and services with consequential effects on the purchasing power of the already impoverished Nigerian.
“Already inflation rate in the country is high at 22.22 percent as recorded in April 2023 and as such, any increase in the pump price of fuel will further accelerate inflation, which will distort and destabilize economic activities, shrink private sector business capitals and lower the real disposal income of the people. No doubt, therefore, the economy would contract in terms of growth; business activities will face serious backlash; and aggregate consumption will fall due to inflationary pressure.
“While it is desirable to remove the fuel subsidy, which in real terms, is subsidizing inefficiency and corruption, it is important that the removal is systematically and strategically done in order not to further impoverish and worsen the already bad socio-economic indicators such as employment, poverty per capita income and many more. It is worrisome to note that prices of other commodities have skyrocketed few hours after the President’s pronouncement of subsidy removal. Consequently, it is critically important that the new Government approaches the removal of the subsidy with caution to circumvent further degeneration in the economy.
“We reiterate that in the spirit of frontally addressing corruption as stated in the President’s inaugural address, efforts should be stepped up to complete the rehabilitation of the refineries to complement the Dangote Refinery that just came on board recently. With the measure, it will be possible to attain scale in PMS refining in the country so as to moderate domestic prices.”