I commend President Goodluck Ebele Jonathan, Ph.D., GCFR, for the reduction of the pump price of petrol from N97 to N87 per litre. It is yet another proof of his sensitivity to the expressed yearnings and aspirations of Nigerians with the fall in the international price of crude oil.
In my contribution to a Facebook post which my elder friend and brother, Pastor Agu Imo, made on the subject of the reduction of the price of petrol about three weeks ago, I had stated that the price would likely be reduced in February or March, 2015, in view of the time lag between when the petroleum marketing companies place orders for products and when they arrive in the country. I said then that the product being sold in petrol stations at that time was imported at the price prior to the fall in crude oil prices so the dealers would make a huge loss should they immediately adjust the selling price.
I expect a further reduction in the price of petrol in subsequent weeks in line with developments in the international market for the product and a similar announcement regarding the price of kerosene soon.
In effect, the price of petrol has now been deregulated. Indeed, the Forum of the Commissioners of Finance of the 36 States had long called for the deregulation of all petroleum products and the removal of subsidy on them in their bid to boost the federally-collected revenues available for sharing by the Federation Accounts Allocation Committee. I wonder if the opposition Governors have thought through this. I hope they would not pretend that they are unaware of the implications when people begin to react negatively to the removal of fuel subsidy.
True to character, some Buharists are already agog claiming "victory" for the reduction in the price of petrol. LOL! They think this is another opportunity to make political capital of a simple matter of rational economic management. The gullible ones are already buying their hypocritical sophistry. SMH!
I stand by my position that Fuel Subsidy should only be removed WHEN Nigeria builds more refineries and we stop the importation of petroleum products. It makes no sense importing products which we could easily produce locally and waste resources enriching private individuals and foreign firms through "subsidies". It is virtually impossible to ensure that there are no fraudulent subsidy payments as have been the case since the temptation to cheat is irresistible for mere carnal men irrespective of the checks and balances put in place. Collusion will render them ineffective as has been our experience.
I advocate that Nigeria bans the export of crude oil. It makes no sense with crude oil selling at under $50 per barrel and likely to fall as low as $30 in the near term. At such low prices it is unprofitable for Nigeria to even produce crude oil.
Nigeria should invest massively in building refineries and begin the export of petroleum and petrochemical products. We will actually make more money doing that. Potentially, Nigeria could earn as much as $200Billion (Two hundred billion U.S. Dollars!) annually within the first three years of exports and the foreign exchange revenues can only grow higher in the long term.
This is our chance. Let us exit the Organisation of Petroleum Exporting Countries (OPEC), restructure our oil and gas sector, and redefine ourselves as a Petroleum Products and Petrochemical Products Exporting Country.
We can. We should.
God bless Nigeria.
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