5 Issues With The Vice President #FuelSubsidy Response
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#1 Are Our Refineries Working Or Twerking
VP: “What happened is as follows: our local consumption of fuel is almost entirely imported.”
So what happened to the 3 functioning refineries? Or was it a lie? Reminder:
January 2016: NNPC spokesman Ohi Alegbe said the Port Harcourt, Warri and Kaduna refineries were producing a total of 6.76 million litres of gasoline per day, adding that this was projected to rise to more than 10 million litres per day by the end of January. Source: Reuters Africa
NOTE: Nigeria consumes 35-50 liters per day on average. That means 20% to 33% will be carried by our local refineries per the above statement … so why the switch all of a sudden? Have we been lying about our refinery capacities to curry cheap approval points?
#2 NNPC too Wan Join
VP: “NNPC exchanges crude from its joint venture share to provide about 50% of local fuel consumption. The remaining 50% is imported by major and independent marketers.”
If this is true, why then is NNPC also increasing their pump price? NNPC should not require FOREX for joint venture share exchange!
VP: “These marketers up until three months ago sourced their foreign exchange from the Central Bank of Nigeria at the official rate. However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN. The CBN simply did not have enough.”
But we did not listen, despite the fact that our foreign reserves were dwindling due to low Oil prices we still said we would stubbornly maintain an unsustainable N197 to $1 exchange rate.
This, despite the fact that the black market rate was running away we still held it at N197. What this does is deplete our foreign reserves much faster.
Now FOREX has almost finished, we are now shifting the cost of poor economic decisions by this administration to the poor Nigerian man.
#4 Typographical Exchange Rate Error?
VP: “We expect that foreign exchange will be sourced at an average of about N285 to the dollar, (current interbank rate).”
So wait here I am confused. The official inter-bank rate has always been N197. But all of a sudden in the VPs message to Nigerians it is now at N285. Did they just devalue the Naira or is this a typographical error?
Please epp me ask, so CBN can update their page here.
NOTE: I actually think the VP made a mistake and was referring to the N285 pounding sterling exchange rate and not the dollar exchange rate. In which case it is quite sad that no one could proof read and catch this factual error.
#5 Government Still Trying To Control Price
VP: “They would then be restricted to selling at a price between N135 and N145 per litre.”
We did a similar restriction of N86.00, it failed woefully. Why do we now think a N145.00 will work differently?
How will the man transporting fuel from Lagos to Kano still sell fuel at the same price as the man in Lagos not transporting anything? Its logically impossible. What they should do is have price restrictions per state or region … and not try and restrict a price across country. It just won’t work!
At the end of the day, this is what happened …
The current Government despite sound advice from several Economists refused to devalue the Naira while running a propaganda campaign to make Nigerians believe that our refineries were working and everything was fine, gambling that the Oil will rebound and cover up the lies.
Sadly Oil never rebounded and this inevitably led to the fast depletion of our Foreign Reserves. To the extent that CBN could no longer keep up with the demand from Fuel importers.
And now the government is shifting the burden for their poor decisions to the Nigerian people. Now I am not saying our Vice President aka the ex-Pastor is telling Lies … but all I ask is that he …
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