The Lagos Chamber of Commerce and Industry (LCCI) has recommended a phased removal of petroleum subsidy to mitigate its effect on the masses.

“In the face of this dilemma, we recommend that the removal is phased. The federal government must consider doing all that is possible not to truncate the implementation of the PIA 2021, which has already brought so much hope for industry watchers as a big game-changer for the oil and gas sector,” LCCI director-general Chinyere Almona explained in a statement on Tuesday.

She stated this in reaction to Mr Buhari regime’s plans to suspend fuel subsidy removal.

Ms Almona explained that the phased subsidy removal should be accompanied by complementary investment in critical infrastructure to support production in the economy.

According to her, more production meant more job creation, poverty reduction and improved economic growth. However, she noted that a monthly payment of about N250 billion to subsidise fuel consumption meant an additional N1.5 trillion expenditure in the 2022 budget.

She stated that with additional expenditure against the projected revenue, deficit financing would be needed to support the budget expenditure.

Ms Almona also noted that the development was likely to see the government borrowing more than projected to finance the bloated expenditure in the face of revenue mobilisation challenge.

“The signing of the Petroleum Industry Bill into law by President Muhammadu Buhari was well-received by all major stakeholders and seen as a commendable act by the government,” Ms Almona. “The political will to sign the bill into law was highly applauded because of the expectations of many on the full exploitation of the inherent potential of the oil and gas sector.”

She further pointed out that “less than a year into the signing of the act, the implementation has suffered a flip-flop as some of the provisions of the act are being suspended.”

Ms Almona also mentioned that while the LCCI supported the full implementation of the PIA and total deregulation of the oil and gas sector, it was not insensitive to the plight of the masses that might feel the pains of fuel subsidy removal.

“Since the announcement of the planned removal of fuel subsidies, there have been numerous reactions expressing displeasure and readiness to stage protests against the planned action,” she explained. “The government, on the other hand, had expressed its concerns about the unsustainable subsidy payment which has become a strain on government revenue.”

The LCCI boss also stressed the need for stakeholders’ consultations to address the implications of the act’s lapsed provisions and forge the way ahead towards its full implementation.

(NAN)