Fuel Subsidy Removal: LCCI Calls For Review Of Forex

 
The director-general of Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf said, for the objective of liberating the petroleum downstream sector to be achieved, the current foreign exchange policy needs to be urgently reviewed.

In a statement, Yusuf said, “This has to be done to improve liquidity and transparency in the foreign exchange market. Only a limited success will be achieved if the current rigidities in the management of the foreign exchange market persist.”

He pointed out that the decision by the federal government to liberalize the petroleum downstream sector is inevitable given the acute resource constraint that the country is faced with at this time.

“The over regulation of the sector and the subsidy regime had put enormous pressure on government finances and on our foreign reserves. It was evident that the policy choice was not sustainable. The review is in the long term interest of the economy and the people.

“Petroleum subsidy management has been characterised by serious transparency issues for several decades. There are two components of the subsidy phenomenon. The first is the actual subsidy, which is the differential between the pump price and the landing and other costs of fuel. The second and more disturbing component is the blatant corruption inherent in the fuel subsidy regime,” he said.