CPPE calls for urgent, coordinated measures to cushion rising crude oil prices
The Centre for the Promotion of Private Enterprise (CPPE), has called on the federal government to introduce coordinated policy measures to cushion the impact of rising crude oil prices.
The centre, a private think tank in Lagos, gave the advice in a policy brief signed by Dr Muda Yusuf, its Director-General, in Lagos on Sunday.
It gave the advice against the backdrop of the rising international prices of crude oil caused by the ongoing U.S./Israel war on Iran.
The centre said Nigeria’s latest CPI report indicated that the current geopolitical energy shock posed a significant risk to Nigeria’s inflation outlook, with the potential to reverse recent gains and deepen pressures on households and businesses.
It said a proactive, coordinated and forward-looking policy response was, therefore, imperative to safeguard macroeconomic stability, protect citizens and support enterprise sustainability in an increasingly volatile global environment.
According to the CPPE, priority should be accorded to strengthening domestic refining capacity through the provision of stable and reliable crude oil supply to local refineries, including the Dangote refinery, under supportive, predictable and, where feasible, concessionary terms.
“This is crucial for moderating domestic fuel prices, easing pressure on foreign exchange demand and enhancing the country’s energy security.
“Governments at all levels should also scale up investment in efficient and affordable public transportation systems as a key social protection measure.
“Transport costs have become a major channel of inflation transmission, and easing this burden would provide immediate relief to households.
In addition, fiscal barriers to renewable energy adoption should be removed,” it said.
The CPPE also suggested waivers on import duties and taxes on solar equipment, inverters and batteries to introduced to accelerate the transition to alternative energy sources and reduce dependence on expensive fossil-fuel-based self-generation.
“Additionally, all maritime charges should be suspended to ease the escalating shipping cost amidst the sharp increase in marine insurance globally.
“More fundamentally, there is an urgent need to improve electricity supply. Reliable power remains the most effective long-term solution to Nigeria’s energy cost crisis.
“Strengthening generation, transmission and distribution infrastructure, alongside support for decentralized energy solutions, would significantly reduce production costs and inflationary pressures.
“In the short term, flexible and remote work arrangements should also be encouraged where feasible, as a means of reducing commuting costs and mitigating the welfare impact of rising fuel prices.
“Monetary and fiscal authorities must remain cautious and disciplined. The resurgence in monthly inflation and the emergence of external shocks suggest that premature policy easing would be risky.
“Oil revenue windfalls should be managed prudently, with emphasis on strengthening foreign exchange reserves and supporting productive sectors of the economy,” the CPPE said.
