Petrol Price And Economic Enslavement Of Nigerians

 By Adekunle Adekoya

AS each day dawns in Nigeria, the economic omens are getting more and more bothersome, sending  wave after wave of apprehension about how to make ends meet down the spines of most of us, except, perhaps, those permanently connected to sources of unending funds, like politicians, clergymen, and motor park operatives, known as agberos.

These three classes of Nigerians are about the only ones seemingly immune from the excruciating impact of the economic policies of the government in power. They are immune from it because the systems in which they operate is wired to generate money that they can spend at will without let and hindrance, and the sums available are simply humongous.

At the centre of our current hardship, as we all know, is the price of petrol, which is the fuel that powers movement and logistics in our petro-state. Any increase in the price of petrol is immediately reflected in the cost of commuting and the prices of goods and services, particularly food items. As the price of one 50 kilogramme bag of rice passes the N100,000 mark, it can be imagined just how many people are left in the country that can afford a plate of rice, with or without protein garnishing in form of meat or fish.

All of us, with the probable exception of the blood-sucking lampreys that constitute the petro-cabal, had hoped that with the commissioning of the Dangote Refinery, the price of petrol at the pump will go down to affordable levels. With imported petrol, the following charges apply, thereby bringing the cost of the product up from where it should be: These are 1. FOB cost — N434.32; 2. Freight cost— N86.48; 3. Insurance cost — N10.58; 4. Lightering cost — N23.45; 5. Jetty depot fees — N15.35; 6. Storage fees — N12.58; and 7. Financing costs — N34.67. Other charges are 8. Foreign exchange costs — N23.45; 9. NPA charges — N10.58; 10. NIMASA charges — N5.29; 11. Customs duties — N51.17; and 12. Other levies and charges — N50.00.

It is precisely the belief that most of these charges should not apply to Dangote Petrol that is confounding simple Nigerian minds like mine. If FOB charges and freight charges alone are taken off the landing cost of petrol since we now have a working refinery at home, that should be N520 off the price we’re currently paying, which is minimum of N998 in the Lagos area alone. That should bring the cost of petrol down to N478, in the first instance. Other charges that should not apply to locally-refined petrol are Nos 5,6, 7,8, 9, 10 and 11, which are jetty depot fees, storage fees, financing costs, foreign exchange costs, NPA charges, NIMASA charges, Customs duties and other levies.

Add these charges and you have N203.09. Add that to N520, and you have N723.09. If that is deducted from N998, we have N274.91. In all of this, we don’t know the cost of refining and profit margin for the refiner. If we know, it would be possible to hazard an educated guess. However, allowing the refiner’s whims at a cost of N100 will bring realistic cost of a litre of locally-refined petrol to just N374.91. My position is that if a litre of petrol can sell for less than N400 today, Nigerians will heave a huge sigh of relief and will immediately start seeing the effect as prices may come tumbling downwards.

However, there seems to be a determination by the petro-cabal to keep the masses of Nigerians in everlasting penury and crash this economy by insisting that the charges that apply to imported petrol must apply to locally-refined petrol, thereby making us pay through our noses for this all-important commodity.

My worry is that they seem to have willing aides in the power elite. If not, why would Dangote, a few weeks ago tell us all that only the FG can determine the price at which he should sell his petrol? Why has it been difficult for Dangote Refiney to tell the Nigerian public how much it can sell petrol? In addition, why was it that NNPCL was initially the sole offtaker of the petrol?

Then, the other no-brainers in this petrol brouhaha. One is that crude is being sold to local refiners in Naira. Good. The only thing that does to the value chain is the elimination of stress that comes with sourcing for dollars to pay for crude. It has little or no impact on the price if the crude is still being sold at the naira equivalent of the dollar at prevailing exchange rates. So, all the other refiners like Walter Smith Petroman, Edo Refinery, and Azikel, when they fully join the market with their refined products, will have all these crazy charges slammed on them? For what reason?

Let the Senate and the House of Representatives, for once, rise in defence of the average Nigerian and in the interest of the Nigerian economy and get these ludicrous charges off locally-refined petrol. Petrol is kneeling on the neck of this economy and it is asphyxiating. That should not be allowed to continue. As for the exchange rate, I advise people in power to simply ignore the World Bank which said that reversing reforms will spell doom for Nigeria.

Those guys at the World Bank and IMF simply don’t mean well, and enjoy jerking off as our people suffer. Nothing will happen, though Finance Minister Edun is reading the same page as the World Bank. Truth of the matter is: Naira flotation is not working, and will not work because the Naira cannot float on nothing. The economy needs a productive base for its currency, and it is just not there. Since we don’t know where we are going with flotation, it is wise to turn back to where we’re coming from.

*Adekoya is a commentator on public issues