Hottestgistnaija.com
Rejoinder: Response to SERAP’s Demand for Fuel Price Reversal
Firstly, if the Federal Government allows the price of fuel to be dictated entirely by market forces, as some media commentators like Reno Omokri advocate, the pump price could easily exceed ₦2,000 per litre of PMS, based on the current value of the Naira. With the current minimum wage, can this be deemed affordable or sustainable for the average Nigerian?
At such a prohibitive price, the cost of goods and services would inevitably soar by at least 80%, pushing Nigerians who are already struggling, into even deeper financial hardship. Are we then ready to face the potential social repercussions?
A sharp hike in prices will unleash rampant inflation, possibly leading to one of the worst economic crises Nigeria has ever seen. Many businesses will be unable to survive, as demand for unaffordable goods and services plummets. In such a situation, where does the “purported” national analysts expect to source the “increased taxes” to fund their proposed solutions?
Energy subsidies are a globally recognised tool for supporting social welfare, and there is nothing inherently wrong with them. However, Nigeria’s subsidy system has been grossly mismanaged. What we need is a subsidy model that is tailored to our current economic circumstances. This is where effective leadership is essential.
To address this, we propose the following steps:
1. Crude oil Sales in Naira to Dangote Refinery: Sell crude oil to the Dangote Refinery in Naira at a rate that ensures a pump price of around ₦800 per litre for Nigerians. This would offer much needed relief to the masses in our highly compromised oil sector.
2. Implement a Transparent Monitoring System: Introduce a smart, transparent system to track the movement of crude oil from refineries and finished products to pumps. The will uncover the inflated consumption figures periodically reported by the NNPC. Saudi Arabia operates such a system, and we could adopt a similar approach without reinventing the wheel.
3. Ban the Importation of PMS and Diesel: Halting the importation of these refined products would save the nation vast amounts of foreign exchange, thereby strengthening the Naira.
4. Reform NNPC Leadership: Remove the corrupt and ineffective management of the NNPC and install competent and transparent leadership. Revitalizing our refineries to produce more locally refined products and export them will increase our foreign exchange earnings, further bolstering the Naira.
5. Any government owned refinery that cannot be turned into an economically viable enterprise within a deadline of 18 months should be either sold or scrapped. Government MUST stop funding any staff cost or maintenance after that deadline.
6. Address Oil Theft: A decisive crackdown on crude oil theft would allow Nigeria to ramp up production to 2 million barrels per day, significantly increasing revenue for national development.
7. Enhance Border Control: Strengthen border control mechanisms to curb the smuggling of PMS and diesel, which distorts supply and demand within Nigeria.
Implementing these measures is well within the purview of the Federal Government and would set Nigeria on a path to economic recovery within a year. With a coordinated and transparent approach, we believe that it is possible to ultimately achieve a fuel pump price significantly below ₦400 per litre.
However, to accomplish this crucial economic objective, the Nigerian National Petroleum Corporation Limited (NNPCL) must be freed from political interference and empowered to operate efficiently in its core mandate, delivering prosperity for all Nigerians.
