It’s very clear that we are not in a crisis; we just have economic managers who really are not interested in solving the problem.
I just saw a report attributed to the Minister of State for Petroleum saying that fuel prices should be dispensed at above N1, 000 per litre
The main reason for this, according to the report, is the rising smuggling across borders because of the relative cheapness of our own supplies.
This excuse is as old as Methuselah and has always been pooped by Nigerians.
Why must we pay more because of your inability to rein in your own security forces who, according to you, are involved in the snuggling?
Sadly this time around, I think they are just trying to give an already rogue dog further bad names because this situation is far beyond the tankers being smuggled across the borders.
This problem starts from that—the subsidy has gone silent and now has spiraled almost out of control.
Since that day, fuel has moved from 179 to the 1,000 we are seeing today, carrying with it inflation, which has hit the 40% mark with the erosion of the naira.
https://newsextra24.com/breaking-dangote-fixes-price-date-for-sales-of-petrol-to-public/
Let’s just say the economy has been hit by a tsunami, leaving the government with its hands on its head in fear.
The only thing very certain about this government now is its ability to ramp up its expenditure despite all of this and in its very strong belief that it can wrestle down discontent
We are beginning to see pressure from authorities on civil society; Labour is under it’s and Journalists are now in danger
As the economy grows worse, crackdowns on the dollar will intensify as the government continues to grapple with an economy that is spiraling so fast down the drain that it’s scary.
Now the main issue today is the pump price of fuel and the NNPCL’s hypocrisy in handling the matter.
You say you are whatever you have called yourself just now and you have declared dividends and, in the same vein, used the dividends to clear backlog and you still now, after several denials, admit to owe dealers over $6b in back payments?
You are the main cause of the problem. The confusion you have thrown into the space due to your opaque mode of operation and indecisiveness has thrown a bee hive filled with angry bees into the market.
I do not think you have the independence you need to run as what you want to run and this is part of the problem.
https://newsextra24.com/pope-francis-lands-in-indonesia-as-he-starts-marathon-trip-abroad/
Your books are wonky, your decision-taking is amateurish and your outlook posturing is bereft of the confidence the market needs to plan.
As for the government, it’s clear that it is not ready to do what needs to be done for the economy, as it is too neck deep in overspending, inability to block leakages and also its openness to engage.
But instead, it’s relying on its ability to honk down and ride public angst.
This thing is simple. Reduce government spending by over 50% if possible, block leakages, and move savings towards a temporary subsidy regiment to hold fuel prices and exchange rates for at least a six month period.
This should allow for planning and the calming down of nerves.
Now renegotiate debts to allow for longer tenured repayments to bring down debt servicing outflows that would also be used to stabilize the markets.
Instill a true reform package at NNPCL. If you want to commercialize it or privatize it, then do it.
Sell it, raise funds and use the monies to buffer fuel prices and the exchange rate so stability can come back.
The confusion that is NNPC is the major problem here, as decision-taking will be quite cumbersome.
One moment it is independent, and the next moment the Minister is handing down directives.
The decision to hand over the PH and Warri refineries to private interest is beneficial if it will happen, as it will allow for efficiency in the value chain, that is, if it is not sold to the usual suspects.
Importation should be democratized. Opened up, which will now push competition, which in time will impact prices.
In real time, at the current exchange rates impacting the landing price, Nigerians will not see fuel at Jonathan price levels in their lifetimes again and this is why the government must temporarily move away from the free market economics of the IMF into a buffer driven one funded by less spending on its part and a critical fight against corruption.
The issue is that the allure of the sector is too strong for the government and its cronies to hand it off.
The government will have to ask itself a very critical question: do we still need Nigeria or not and if they still want Nigeria, then they should hands off.
What we need now is sincerity of purpose by the government, a robust sweep of management of NNPCL and a robust and effective socio-welfare impact to cover the vulnerable, who are growing in malthusian proportions.
Thanks
Duke of Shomolu
