Former and present Group Managing Directors of the Nigerian National Petroleum Corporation(NNPC) have expressed fears that the current pump price of N145 per litre is no longer feasible.
They said the amount does not correspond with the price-determining components of the commodity and the fluctuations of the foreign exchange rate.
They stated this after a one-day meeting they held with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja.
The NNPC in its statement said, “They (the GMDs) noted that the petrol price of N145/litre is not congruent with the liberalisation policy especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority charges, etc remaining uncapped.”
The declaration of the NNPC present and past bosses confirmed an exclusive report by SUNDAY PUNCH on August 7, 2016, in which oil marketers revealed that the actual or real cost of petrol was N151.87 when all the pricing components are adequately captured.
The marketers had stated that they were struggling to maintain petrol price at N145 per litre because of the stiff competition in the downstream oil sector, but stressed that the practice was not sustainable.
The GMDs, however, commended the NNPC for resolving the fuel supply crisis and urged the corporation to come up with measures that will ensure sustenance of seamless supply of petroleum products nationwide.
According to the corporation, the GMDs expressed concerns about the declining crude oil production level and its consequences on the environment and the nation’s revenue.
They further agreed that if the current situation remains unchecked, it could lead to the crippling of the corporation and the nation’s oil and gas sector which is the mainstay of the Nigerian economy.
The Nigeria Labour Congress, Trade Union Congress, Afenifere, former federal lawmakers, security experts and rights activists, however, warned the President Muhammadu Buhari administration not to contemplate any further increase in the pump price of petroleum products in the country
The General Secretary of the NLC, Dr. Peter Ozo-Eson, who stated this in an interview with SUNDAY PUNCH, said Nigerians would not accept further fuel price increment.
Ozo-Eson had warned the government earlier this week against increasing the pump price of petroleum products in the country.
He said, “We had given a warning before that Nigerians cannot take any further increase, that they shouldn’t do it.
“That remains our position, and if they go ahead and do it, it is up to Nigerians to say how they want to respond to it. But we remain opposed to any new increase in the price of petroleum product.”
Meanwhile, Constitutional lawyer and Senior Advocate of Nigeria, Chief Olisa Agbakoba, has described Nigeria’s economic situation as a disastrous one saying the Naira will soon exchange for N1,000.
The Naira currently exchanges for N420 to the dollar at the parallel market. Speaking on Channelstv programme, Sunrise Daily, Agbakoba also said those claiming that Nigeria’s economy will bounce back in the first quarter of 2017 are not being realistic, saying a recession has a cycle which is three years.
“It is not surprising. Remember I said it about three months ago. The analogy will be if you are hypertensive, you see your figures going up. If it continues to go up, you have a stroke and die. It is an absolutely disastrous situation.” “Those who say we are going to bounce back in Q1 2017, that is not going to happen. Whether Q1 or Q2 of 2017, we are not going to bounce back. Typically, a recession has a cycle which is three years. A recession has to be converted with the proper economic tools.
“First, we have no macroeconomic tools. The policy of the government on how to deal with the economy is unclear. The CBN has adopted a monetary approach which is tight money by taking the MPR to 14 percent, base lending rate. “This means that the banks will now lend at, at least, 20 percent. That is terrible. But one thing that will shock the system is massive bounce. You need to pump money into the system. When you pump money into the system, you need to have productive activity.”
Agbakoba also urged the Federal Government to take a cue from how the late British Prime Minister handled the situation when Britain was in recession.
“When (Margaret) Thatcher took Britain into a recession by her tight money, she was able to succeed in bringing it out because she had a very robust privatization programme. In our Nigeria’s economic sector, I don’t see anything happening. So, it is bad news, massive unemployment and even the 2016 budget remains 90 percent un-implemented. It was politically incorrect to say there is a recession. People did not want to say it. People wanted to say things that will please the government. Even with respect to my good friend, Bismarck Rewane, he got it wrong because he is also now seeing the issue.
“Anyone who has any knowledge of econometrics would have seen that from Q4 2015, we have not grown. And from Q4 2015 to Q1 2016, we have been contracting. Now we have two contractions. Absolutely, I don’t even think that we are in recession, we are heading to depression.
“Monetary, fiscal and trade policies go together. So, the CBN is doing the wrong things by trying to manage the foreign exchange process. I cannot for the life of it understand why the CBN is over-excited about the foreign exchange process.
“The Naira is going to N1,000 to a dollar because you cannot defend it. Just watch and see. The more the Naira is defended, the more squeeze the CBN will put. And if there is that squeeze, there will be nothing to put into the system for the manufacturers to grow,” he concluded.
