It is no longer news that the Federal Government has announced a reduction in the pump price of premium motor spirit (PMS), popularly called petrol. While I have made my position known on my Twitter handle that ‘a little over 10% reduction in cost of the final (crude oil) product (PMS) in response to an over 50% drop in the cost of the raw material is a good try and that Nigerians can get a better deal’, I am constrained to make this further intervention for a few reasons. 1.There is a sense in the public space that this reduction is politically motivated, given the reactions that have followed it. To the extent therefore that there is a political nexus, it deserves further interrogation because it is an ECONOMIC issue and this is a major issue in the elections as canvassed by both parties, especially at the Presidential candidacy level. General Buhari had seized the moment and the importance of the economic issue earlier this month. Through his campaign council he said: “Stop stealing from Nigerians and allow them enjoy the relief that has come to consumers of petroleum products globally. “For the Nigerian consumers, unfortunately the collapse of crude oil price since October 2014 has not translated into any change in diesel, kerosene and PMS prices across the country.”
- The second reason for my intervention is also economic, and it goes to interrogate POLICY, particularly this PRICING POLICY, and the consistency of the party in Government Vis-a-Vis their credibility before the Nigerian public.
- U.S.A Drop in Price (dollar per litre): 0.39 Percentage of price drop: 36.57%
- NIGERIA Drop in Price (dollar per litre): 0.03. Percentage of price drop: 10.3%
- b) A refinery in Nigeria, such as the 400,000 barrel refinery we are supporting by providing land for the Dangote Group in the Lekki Free Zone will keep jobs at home, (instead of in foreign refineries), create income for the Nigerian Government by way of companies income tax, and give us better control of pricing by eliminating subsidies and demurrage charges by port delays paid to ship owners in dollars against a weak Naira; and it will eliminate many other charges that are passed on to ordinary Nigerians.
- c) Clearly, an inefficient Port Management that escalates shipping costs, a devalued currency, and an exorbitant interest rate on borrowing, which are economic failures of the current Government, are part of the reasons why Nigeria cannot get a better deal from an over 50% drop in Crude Oil price.
- Are Government departments talking to themselves?
- Who is co-ordinating the economy?
- Why was the Honourable Minister for Finance not part of this major Pricing Policy briefing?
- Was this price reduction provided for in the 2015 budget?