Though commending government on the reduction in price of premium motor spirit (PMS), NECA said government should allow the international price of crude to determine the prices of the products in Nigeria, and the template should be flexible to accommodate changes as they might occur.
NECA’s director-general, Dr. Timothy Olawale, noted that it was a welcome development, with the caveat that as Nigeria operates a monoeconomy hinged on oil, government should ensure a total eradication of the subsidy regime in whatever form.
Olaleye stated that the price of PMS and other petroleum products could have been much lower if the pricing template had been rigorously followed and applied.
He said, “Government should address the issue of subsidy and ensure its total eradication. Energy consumption subsidy is any policy by government that is aimed at reducing the price of energy consumed by citizens relative to what the price would have been in the absence of such policy.
“The regulated price arguably will reduce the consumer price index (CPI) and make it easy to regulate the level of inflation. Subsidy often leads to increased demand for PMS due to over-use and waste arising from reduced price of the product, creating unnecessary shortage of supply.”
The NECA boss urged government to provide leadership and direction in diversifying the economy: “The nation cannot hinge its destiny on the price of a commodity in which it has no control on the pricing.
“It is time to deliberately create a roadmap for rapid diversifying of the economy away from oil. We need actions; the government needs to create avenues for more economic activities to happen like diversifying the tax revenue of the government beyond oil,” he stated.
The NECA DG warned that the shortfall in oil prices should not be a licence to further mortgage the future of the nation with borrowing as the budget is already struggling under the weight of debt service.