BreakingNews 12/5/16 - N145: Nigerian Masses Condemned To Buy Petrol Based On Blackmarket Forex Import Cost

[ Masterweb Reports: Dr. Peregrino Brimah reports ] - The abbreviated explanation of the new deregulated petrol prices is the decision by the Nigerian government to push Nigerians away from enjoying fuel imports with CBN dollars, analysts have said. More than just remove the fuel subsidy, which it already did, the government is also being miserly with 'its' dollar reserves – for the masses that is – and forcing the citizenry to buy product imported based on black/parallel market forex prices. 

 

In the statement released by the Nigerian government on the 'deregulation' of the fuel downstream, the decision by the 'Honorable' minister of Petroleum is captured thus. I quote:

 

"2. All Oil Marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product."

 

The 'Subsidy' Removed: CBN 'Subsidized' Dollar

 

Secondary sources of forex is the blackmarket. The ongoing fuel shortage can now be better understood. The answer to "how hard can it be to properly estimate and import the fuel needs of a nation?", is answered: it depends on how much CBN dollars the government is willing to spare. Kachikwu and Emefiele were unwilling to use CBN dollars to import refined product and that is why we had long lines at the pump.

 

The Federal government of Nigeria is unwilling to continue to use its dollars to import fuel for Nigerians.

 

The CBN dollar rate is N197/USD while the blackmarket rate hovers around N325/USD.

 

The subsidy on fuel was removed since December. Our memory span is not that short. [See: Nigeria scraps fuel subsidy, cuts petrol price to N85 per liter- PremiumTimes, December 26th, 2015]

 

What was just removed was the CBN dollar rate 'subsidy' if I can e pardoned for using that term. Nothing changed between December and now. Global oil prices have barely increased. There is no other denominator to factor for this 50% hike is there?

 

The change in price per liter can be calculated with basic level maths simply thus:

 

At CBN N197 the price without subsidy was N85.60

 

At Blackmarket N325 what will the price be?

 

325 x 85.60 / 197 = N141.00

 

This is how Kachikwu and co came up with the new N145/liter rate.

 

CBN Dollar: You Now Get None While The Cabal Happily Get All

 

What bothers is the same Federal government has in public statements, promised to continue to allow unfettered access to CBN dollars for Nigeria's cabal, the likes of Aliko Dangote and others.

 

“Your ongoing 14 billion dollar refinery investment will enjoy our support, no doubt. We are doing this to fast-track the importation of equipment you need for a speedy completion of that project and to encourage other Nigerians to follow your lead," CBN Governor Godwin Emefiele said during a tour of Dangote's $14 billion refinery project in January this year.
 

 

Nigeria imported 6 billion litters of fuel in 2015. The cost in CBN dollars to import this amount of fuel is less than $3 billion/annum. 

 

But unfortunately, rather that use some of the forex revenue generated from the sale of oil to import fuel for the masses, the government will happily invest that forex in Dangote's private refinery and other businesses of the affluent and force the masses to buy fuel at the convenience of hawk private cabal and the banks that have now become the official blackmarket.

 

If after this hike, the NNPC stil

 
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