By Lateef Adegbite
Those who thinks that petrol price that had be jerked up by the Nigerian National Petroleum Corporation, NNPC, now baptized , Nigerian National Petroleum Company Limited, NNPCL, with the passage of the Petroleum Industry Bill by the 9th National Assembly and signed into Law by former Pesident Muhammadu Buhari, on August, 2020, may have to do a rethink.
This is because, the arrow head of the petrol price increase, President Bola Ahmed Tinubu, who incidentally was an ex-while governor of Lagos state, has said that there was going back on the decision as the price of the product would now be determined by market forces like Automotive Gas Oil, popular, diesel, Dual Purpose kerosene, DPK and Aviation fuel.
The Nigerian President who has been under intense pressure from several quarters, both within and outside the country to reverse the pump price of petrol from the current N897.00 to the original N600.00, had said that the removal of the subsidy on petrol on May 29, 2023, was designed to free up resources for investment in critical infrastructure and social services.
Speaking at the 17th annual Chartered Institute of Bankers of Nigeria, CIBN, Banking and Finance Conference in Abuja, the Federal Capital Territory, FCT, on Tuesday, September 10, 2024, the Nigerian President who had admitted that’’ though painful in the short term’’ had said that the frequent adjustment of the country’s monetary policy rate on the advice of the Bankers Committee under the Chairmanship of Olayemi Michael Cardoso, governor of Central Bank of Nigeria, CBN, was a move aimed at curbing inflation and fostering a more market-oriented foreign exchange rate system.
The Nigerian President, who was said to have been represented at the CIBN, Banking and Finance, Conferenceat the FCT, by Vice President Kashim Shettima, who incidentally was a former governor of Borno tate and instrumental of the Federal Government donation of N3 billion for flood victims in Maiduguri, the state Capital, in listing the challenges faced by Nigerians which include high costs of living, inflation, unemployment, infrastructure deficits and effects of global economic shifts this time around, had said that ‘’ the challenges also present opportunities for growth and development in the country’’.
Vice Shettima, who may have spoken the mind of the President, had said that that the focus of the Tinubu’s Administration is on restoring confidence in the Nigerian economy through measures aimed at’’ reducing inflation, stabilizing the country’s foreign exchange market and improving Fiscal Management’’.
Giving an insider information, the former Borno state governor, disclosed that the present government is investing heavily on roads, railways and energy projects through public –private partnerships ‘’to reduce transportation costs and improve market access.
In spite of the monetary policy measures that had been adopted by the government in the recent to cushion the hardship in the country, Festus Osifo, President of of the Trade Union Congress, TUC, would not take it. The TUC, president, who could not hide his feelings had said that the way out to resolving the crisis in the nation’s economy which had to do with the removal of petrol subsidy by the Tinubu’s Administration is for the CBN, and the Nigeria Customs Service, NCS, under the close watch of Bashir Adewale Adeniyi, MFR, ‘’to give special foreign exchange rate to the NNPCL, to import petrol from the offshore refineries into the country until the Noth merican country of the United States, US, 20 billion dollars, 650,00b/d, and local refineries including the 445,000b/d, PortHarcourt, Warri and Kaduna , which had undergone Turn Around Maintenance , TAM, become fully functional.
The TUC, top official would want the CBN and NCS, to grant a special rate of about N1000.00 to a US, dollar, instead of the N1,6000.00 to a US dollar, being the official exchange rate. The TUC, president is optimistic that if this can be done, the cost of petrol importation into the country by the oil octopus will crash and the pump price of petrol will rebound back to the original N600, from its current price of of N907.00, depending on the location.
The President of the Petroleum and Natural Gas Senior Staff Association, PENGASSAN, who does not believe that the hardship and hunger in the country was caused by the Federal Government removal of of subsidy on petrol , had aid that that the devaluation of the naira to the US, dollar and other foreign exchange by the Nigerian President on assumption of office, at the tail end of May, 2023, was ‘’the real problem of the country’’.
The Pengasan, president had said that with the sale of crude oil to Dangote in naira and the exchange rate put at n1000.00 to a US, dollar, as suggested y the TUC, president, all marketers will go to Dangote refinery to lift products and sell at reduced rate compared to what it is practicable at present.
With what is happening in the international oil market, where the benchmark of the Nigeria Brent was said to be selling below $ US$70 per barrel, at a time the country’s production level was 1.307 million barrels per day compared to the July figure of 1.52mbd.
The drop in oil revenue in the month of August 2024, appears to have come on the heels of the country’s dwindling oil production since the beginning of the year and at a time the Nigerian President is looking for money desperately to run the affairs of the government.
Energy analysts believe that the Organization of Petroleum Exporting Countries, OPEC’s decision to revise its demand estimates to be lower last August could have been the major reason for the drop in the oil cartel crude oil prices in the international oil market.
They had confirmed that crude oil imports from the oil cartel member countries actually fell by 7% last August, noting that the market has not yet recovered.
