LCCI Urges FG to Cut Petrol Prices by 15–20% in Six Months

The Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government to introduce a six-month petrol price reduction programme targeting a 15 to 20 per cent cut in domestic pump prices, warning that stabilising prices at excessively high levels would do little to ease the burden on businesses and households.

The chamber said the proposed petrol price-stabilisation mechanism should be complemented by a clearly defined programme capable of delivering progressive, measurable and sustainable reductions in the cost of petrol across the country.

In a statement signed by its Director-General, Mrs Chinyere Almona, the LCCI acknowledged the economic rationale behind the government's planned intervention, particularly as rising energy and transportation costs continue to exert pressure on businesses, erode household purchasing power and weaken Nigeria's competitiveness.

The chamber welcomed the proposal to establish a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol, subject to monthly reviews and public disclosure, describing it as recognition of the damaging effects of excessive volatility in energy prices on the wider economy.

However, it maintained that the initiative must go beyond moderating sudden price increases to address the high cost of fuel that continues to undermine production, distribution and commercial activities.

“The proposal to establish a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol, with monthly reviews and public disclosure, represents an acknowledgement by the government that excessive volatility in energy prices has significant consequences for the wider economy,” Almona said.

She noted that greater predictability in petrol pricing was desirable, particularly if it could be achieved without returning to the former fuel subsidy regime.

Nevertheless, the LCCI chief cautioned that price stability alone would not restore business competitiveness if petrol remained unaffordable for manufacturers, transport operators, distributors and other productive enterprises.

“While price stability is desirable, stability at an excessively high price is not sufficient to restore business competitiveness. Nigeria needs a mechanism that delivers both price stability and a progressive reduction in petrol prices over a defined period,” she said.

According to the chamber, the proposed arrangement, in its present form, could shield businesses and consumers from sudden price increases without necessarily reducing the already elevated cost of energy.

It argued that the distinction between preventing further price increases and achieving actual price reductions was critical to determining the initiative's effectiveness in improving economic conditions.

High Energy and Logistics Costs Weigh On Businesses

The LCCI said Nigerian businesses were already grappling with multiple operating-cost pressures, including high electricity tariffs, substantial expenditure on alternative power generation, rising logistics costs and expensive financing.

It explained that increases in petrol prices further compounded these challenges by raising the cost of transporting raw materials and finished products, moving goods to markets and sustaining production activities.

For businesses that depend heavily on road transportation and privately generated electricity, the chamber noted that persistent energy-price pressures could undermine profitability, discourage investment and weaken their ability to compete in domestic and international markets.

Households also bear the consequences through higher transportation fares and the increased cost of goods and services, as businesses often transfer part of their rising operating expenses to consumers.

The chamber therefore called for a more comprehensive approach that would address both the immediate volatility in petrol prices and the structural factors responsible for keeping energy and distribution costs high.

LCCI Seeks Transparent Management of Price-Stabilisation Mechanism

The chamber also raised concerns about the proposed arrangement under which refiners and importers would absorb temporary increases in costs and subsequently recover those expenses when market conditions improved.

While acknowledging that such an approach could help smooth short-term price movements, it warned that the arrangement might create deferred cost obligations capable of exerting renewed upward pressure on pump prices if they were not transparently managed.

It stressed the need for clear rules governing the calculation, disclosure and recovery of such costs to prevent the mechanism from becoming a source of uncertainty for refiners, marketers and consumers.

According to the LCCI, any intervention designed to stabilise petrol prices must be supported by transparent commercial arrangements and independently verifiable cost information to ensure that the interests of businesses, consumers and investors are adequately protected.

Domestic Crude Supply, CNG Infrastructure Key to Lower Prices

To achieve its proposed 15 to 20 per cent reduction in petrol prices over six months, the chamber recommended that the Federal Government work closely with domestic refiners, petroleum marketers, regulators and other stakeholders.

It said the reduction target should be measured against the prevailing national weighted-average pump price and implemented in line with independently verified supply costs and prevailing market conditions.

The LCCI identified improved domestic crude oil supply to refineries as one of the critical measures required to achieve the objective.

It called for transparent commercial arrangements that would guarantee more reliable crude supply to domestic refining facilities, thereby supporting efficient operations and reducing avoidable supply-chain costs.

The chamber also advocated accelerated deployment of compressed natural gas (CNG) infrastructure and electric vehicle facilities as part of efforts to reduce the economy's dependence on petrol.

According to it, expanding access to alternative fuels and transportation technologies would provide households and businesses with more options, ease pressure on petrol demand and support the development of a more diversified energy market.

Other recommendations included reducing avoidable logistics and distribution costs, maintaining exchange-rate stability and ensuring that measures to lower petrol prices did not undermine the commercial viability of refiners and other participants in the petroleum supply chain.

The chamber emphasised that fiscal transparency would also be essential to the programme's credibility, particularly if the government introduced financial arrangements or other interventions to support price reductions.

Price Reduction Must Improve Economic Welfare

The LCCI maintained that the success of the proposed stabilisation mechanism should not be judged solely by its ability to prevent sudden increases in petrol prices.

Instead, it said the government should assess the initiative by its contribution to reducing operating costs, improving household welfare and strengthening the competitiveness of Nigerian enterprises.

It called for a defined implementation timetable, transparent pricing information and measurable benchmarks through which the public could evaluate progress throughout the six-month period.

The chamber's position underscores the challenge facing policymakers as they seek to moderate the impact of petrol price volatility while avoiding a return to the former subsidy system.

For businesses, the LCCI argued, the critical consideration is whether the intervention would translate into lower transportation, production and distribution expenses rather than merely provide temporary relief from abrupt price adjustments.

It said a sustainable reduction in petrol prices would require coordinated action across crude supply, refining, foreign exchange, distribution infrastructure and alternative energy development.

“We welcome the government's intervention to moderate price volatility, but the next step must be a credible plan to bring petrol prices down progressively, sustainably and transparently,” Almona said.

The chamber urged the Federal Government to incorporate these recommendations into its proposed framework, insisting that a successful policy must combine price stability with tangible reductions in energy costs and broader improvements in the operating environment for Nigerian businesses.