BEST POLICIES FOR ENDING PETROL PRICE HIKES IN NIGERIA

Know this!

Eversincer we ventured into the petroleum sector of our economy on a large and dominant scale, in 1971, during the administration of the then Head of State, General Yakubu Gowon; Nigeria has been exporting raw crude oil per barrrels daily (PBD) to her buyers such as USA, UK and perhaps the EU (European Union) for about 40 years plus but we, ourselves, Nigerians have been getting the end of the supply, petrol , imported or refined locally, becomes a #70 per litre and from there it goes  high in the face of petrol price hikes in Nigeria.

“He whose father’s house is behind the river does not wash his hands with spittle”——African proverb

Why then do we have to buy at such a high price?

Is it wrong oil policies,or it is a general maladministration?We need to understand the problem of our petroleum sector.

Petrol Price Hikes in Nigeria: Subsidy and Hikes

Nigerian youths, I always encourage us to educate ourselves on some Nigerian issues and African issues.

Wetin be “petrol subsidy”? Wetin be “petrol price hike”

“Petrol subsidy means Government pays a portion of the original marketing price of the petrol to enable you and I buy it at a reduced standard price”

Petrol subsidy is a portion payment by the Government on the selling price of petrol for the benefits of the citizens to get them at reduced rates.

Petrol price hikes are sudden but projected increase in the price of petrol (goods/services sha…) by the Government for one reason or another.

Mind you,other reasons feel cause petrol price hikes: strikes by petrol sector workers will cause lack of production or low production which will result to lower petrol supply and then transmit to petrol scarcity and then finally to petrol hike (increase in the price)

All these petrol price hikes and petrol subsidy are used as tools of diplomatic negotiation by the masses and the Government.

If the petrol price hikes become larger than what the citizens can bear, they go on strike and on protests via civil society organizations, non-governmental organizations, organised labour unions, opposition political parties (the ones not in power but alive to power) and even the individual citizen for his sitting room as them dey yan am for radio or social media………

However, if the Government has been subsidizing the price of petrol, in its budget for next year, it may not allocate for petrol subsidy citing that the national revenue cannot support the subsidy because of development projects or another reason.

Petrol price hike! Petrol Subsidy! Petrol Subsidy Removal! This happened at various times but history for my current affairs has it say

Head of State Muhammadu Buhari was the only leader that didn’t touch the price of petrol , that was 1984-85 oooooh…..

While President Umaru Musa Yar’Adua is so far the only leader to have reduced the price of petrol.

Petrol Price Hikes in Nigeria: Solutions

Short Term Solution

  • Reactivate our refineries with two refineries for exporting refined crude (refining at least 10,000 BPD)and two for local consumption (refining at least a total 1000 BPD) the two nearer to the seaport can be used for export.

  • Reform the Export Processing Zones and Nigeria Export Import Bank and Nigeria Export Promotion Council into ExportNigeriaCommission (ENC) with a special arrangement for packaging our refine crude oil for export.

  • Open the petrol sector to private investors (70 per cent Nigerian interest/ investment market share)

  • Reform Nigeria National Petroleum Corporation (NNPC) into stopping its regulatory role; it should only perform operational role by being the Oil Company of Nigeria; it should sell PMS (Premium Motor Spirit or petrol) DPK and Gas and other allied products to fuelling stations across Nigeria. This will put a quick end to its inefficiency and mismanagement.

  • Let the Federal Ministry of Petroleum regulate the sector.

  • Stop the subsidy of petrol 7 months later (we kept it until now for balancing the macro economy of the Government and the micro economy of individuals

  • Export more of refined crude oil and less of raw crude oil

Long-Term Solution

  • Let the South-South (Enasaboro/NigerDelta) states control their petroleum sector and pay tax to the FG with a new Peoples Constitution that can usher in a #NewNigeriaProject.

  • Let there be local refining companies via an Act “Petroleum Refining Companies Act” by the South-South States that can see SMEs(Small and Medium-scale Enterprises) especially in the NigerDelta refining kerosene and petrol under specific conditions.

  • Keep NNPC as the Oil Company of Nigeria let it buy crude from NigerDelta and other oil-producing states, refine them at the Government (NNPC) refineries and sell them locally and abroad as a Federation and improve its services to the sand shores of Africa——–Oil Company for Africa

Petrol Price Hikes in  Nigeria:12 Potential Achievements

First of all to solve a problem correctly you must understand the problem (understanding) then devise means by which you can tackle them (wisdom).

  1. Our refineries will become active and we will no longer depend on importing refined petroleum products at high petro-dollar costs. As Dollar dey increase to Naira, na so e dey become expensive for Government to keep buying!importing it and still subsidizing it locally.

  2. A benchmark of 1000 BPD for local consumption is fairly okay for a start and 10,000 BPD for export while stock-piling the excess that falls out of OPEC (Organization of Petroleum Exporting Countries) quota/share for Nigeria as Add-ons to Local Production Stock (i.e the 1,000 BPD) (because Nigeria is a member and as such is subject to their collective agreement, to which Nigeria too can contribute)

  3. Reforming the Federal Government’s export parastatals will reduce the funds needed to run them separately and will increase their effiiciency and synergy.

  4. Privatization or better still Deregulation in our case, will ensure that we have more funds in our petrol sector and keeping them free from sabotage by pacing them under the Indigenization Decree of 1977(General Olusegun Obasanjo Regime) that will keep

    the sector with firms that have at least 70 per cent Nigerian interest even if we have ready foreign investors, let us ensure that we still have a say in our economy to protect the Nigerian economic space and to also create ready employment and correct allocation of our teeming youths and labour force (We produce many Chemical and Petrochemical Engineers yearly for mainstream employment in the petrol sector)

  5. NNPC is handling too many duties and to me is not that efficient, giving it only operational capacity and not regulatory power will enable it live up to its name as “Corporation”which is “company” and not “Commission” which means “regulation”. NNPC will become the Oil Company of Nigeria. Mismanagement of public funds and oil policies will be checkmated instantly.

  6. The Federal Ministry of Petroleum for the short term and later the Federal Ministry of Commerce and Investments should regulate the petroleum industry and keep it in tune with oil policies of the FG.

  7. Stopping Oil Subsidies 7 months later will enable the economy to balance as while we are doing all these reforms we have to keep the citizens welfare at “excellent”, also when you plant a seed it does need some time to germinate, all these reform seeds must be given time to produce the desired effect in our national economy.

  8. Exporting more of refined petroleum products and less of raw crude oil will add more value to the goods/commodities in price, satisfaction and national prestige.

  9. The long-term solutions such as Restructuring our National Economy and ensuring NigerDelta (Enasaboro) controls her crude oil and remit tax to the FG will ensure that the FG will explore other promising sectors to incorporate into Nigeria National Economy and it will also let the FG save revenue it will have expended on recurrent expenditure (salaries)and capital expenditure(rigs,oil tanks) on managing the petrol sector of the entire country. NigerDelta will also be producing oil and oil will flow from NigerDelta to all Nigeria in abundance removing scarcity, reducing the price drastically, ending Niger Delta agitation and pipeline vandalism, enabling NigerDelta to have an economic base of its own and mange it in relation to their environment; and finally supplementing FG’s NNPC oil production.

  10. The bill for Oil SMEs if passed in the NigerDelta especially will put an end to “oil theft”(to the FG) or rather “oil justice” (to NigerDelta) and ensure that talented and skilled local producers can set up local private refineries or oil companies refining oil and making a living. For example, Ewherido in Delta State can set up a small factory employ 5 hands some (Engineering Graduates and other Graduates or some skilled people or apprentice s) purchase/build some oil processing machines and process crude oil for small oil companies in small quantities. Or he can buy crude oil from oil companies be it private sector like Shell or if not allowed,then from NNPC Direct Crude Purchase (the FG should create this platform), he refines it,packages it and markets it through Ehwerido Olugbogo Nig.Ltd. Ehwerido makes a living! Like a saw-mill! Those of you who know saw-mill business you know how carpenters and furniture makers bring wood to the saw-mill owner for a price which the owner demands or they directly buy wood from the wood market and saw it into sizes and put it on sale.

  11. NNPC sourcing for crude oil by acquiring license from oil-producing states and refine them at her refineries in Kaduna, Eleme, Warri and Port-Harcourt ; and selling them at home and abroad will put an end ,to hikes because supply and demand with little Government intervention will regulate the market and the politics will have a reduced effect on the price of oil. Furthermore, it will increase oil supply in Nigeria, increase oil revenue and reduce oil scarcity, and consequently it will reduce petrol price hikes in Nigeria. Serving as Nigeria Oil Company for Nigeria and Africa will help Nigeria to play a good role for her sister-states,GOD-WILLING.

This is my idea on what we can do to solve Nigeria’s petroleum problem and petrol price hikes. Truly, there is a Petroleum Industry Bill (PIB) that has been in the National Assembly on debate but I haven’t got to read am well well!

This is my own contribution to solving petrol price hikes in Nigeria and the petroleum problems  in general , what is yours?Please share this with your friends by using the social buttons

Article by VisionaryDemola
I am a politics blogger, a policy analyst and a political commentator.
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