•Says ‘With local production of fuel, price should be going down, not up as we’re now saving costs of shipping, insureance, freight etc’
•Without transparency reforms will not work
•How to tackle inflation, food scarcity etc.
In this interview, with Emma Ujah, our Abuja Bureau Chief, the President of the Nigeria Economic Society, Prof. Adeola Adenikinju says that the refinery and the NNPCL are yet to give Nigerians the comfort they expected with local production of fuel now going on.
Excerpts:
How would you look at the fact that Dangote Refinery has come on stream, but rather than the price of PMS coming down, it has escalated?
I share the views of free market economy, privatization and such reforms. And the whole idea is that when you have reforms or you privatize, you are replacing government inefficiency with private sector efficiency.
Unfortunately, what we are seeing and reading about what transpires between the NNPC and the Dangote Refinery has not really given us comfort.
If things work well, the estimate is that, if you produce locally, at least you are going to gain around between 10 to 15% of the formal price.
For instance, we are saving on cost of shipping, insurance, freight, all those taxes at the ports.
Unfortunately, what we are hearing is that we should not expect any change in prices. So, definitely there is total lack of transparency and you can’t manage reforms if you are not going to be transparent. You have to get the confidence of the people. There must be transparency. The process must be very clear. And NNPC should lead that. There is no need to hide anything.
This is the cost of procurement of this crude. Whatever we are taking from them is how much they are charging and these are the other cost layers that we want to have.
Market should be open
Many Nigerians have lost confidence in that process. I think there’s a need to go back. If government says that they have removed subsidy, then the market should be opened up.
There is a barrier right now because you are saying NNPC will be the sole off-taker of the PMS and then every other guy will go and buy from NNPC. You do that when you still want to maintain subsidy and you want to control the process. But if it is true that subsidy has been removed, then the market should be liberalized. Everybody should be free to either go to Dangote to buy, or to import so that, there will be competition.
Before now, we were told that petroleum products importation was responsible for about 30 percent of total foreign exchange demand. At some other time, it was said to be 25% and lately 15%. How do you expected the local products production to affect the FX market?
Have a press release, feature, article for publication? Send it to us via Whatsapp on +233543452542.
