THE PETROLEUM PRICE HIKE - BUHARI, KACHICKWU, POLITICS, INDEPENDENT OIL MARKETERS AND THE GOOD PEOPLE OF NIGERIA

By Muhammad Abubakar  B
An Economics graduate
Sokoto State Civil servant, a patriotic and a Concern citizen of Nigeria.
Basakkwace214@gmail.com

It's no longer a rumour that there maybe increase in the general price of  fuel in Nigeria from 145 to 180 to 182, which is as a result of the increase in the landing cost of fuel in Nigeria.

In the first quarter  of 2016, were the price of fuel at local filling stations were pegged at N145, the landing cost was about N134 where some independent oil marketers do sell fuel at the rate of N145, N143,  N142, and N140 by the likes of A.A Rano during Muslims fasting period

Gradually, the landing cost of fuel was increasing due to alot of factors, the rose was from N134 of 2016 to N171 Now.

QUESTION

Can an independent oil marketer of a country whose pegged price of petrol is N145 be able to import when the landing cost is now 171?

The answer to the above question is No,  therefore the independent oil marketers changed their means of supply  to neighboring countries  whose price of fuel is almost N300 -N350 per litre

The independent oil marketers therefore left NNPC alone to be importing fuel at a landing cost of N171 with a lost of N26 per litre, it's stated by premium times news paper  that NNPC is loosing N800-N900 Million Naira per litre  which a cumulatively stated to almost N86 Billion Naira in three months.
SUGGESTIONS PUT FORWARD BY THE PETROLEUM MINISTRY

1-That the government  should sell dollar to the independent oil marketers at the rate of N204 instead of the official rate of N305 Naira  to enable the landing cost of fuel go down which can sustain the consumption of fuel at the rate of N145
                     OR
2-The Government should bring back subsidy and be subsidizing N41 per litre to enable Marketers sell at the rate of N145
                             
                         OR
3-The government should let NNPC filling Stations be selling at the rate of N145 and let the marketers sell at any price (without control)

MY CRITICISMS TO THE SUGGESTIONS

1- The sell of dollar at the rate of N204 to marketers is no less of a subsidy and it will take us back to square one, where a marketer  will get dollar for N204 which instead of using it to buy fuel, he will be selling it to black marketers  at a rate where he'll get nothing less than 50% profit.

2- Bringing back subsidy in this kind of economy that's said to be unstable is not healthy for the economy and the corruption being dodged away from will linger.

3- letting NNPC alone sell at the rate of N145 will cause a lot of heavy ques  at NNPC filling stations or some corrupt NNPC workers will  be diverting it some marketers stations

THE POLITICAL IMPLICATIOAN OF THE CASE

The political aides of the president will never let him to allow a hike in fuel price considering the fact that we are in 2018 and 2019 is by the corner

THEOLOGICALLY

GOD the almighty is punishing the current administration for not being just to the previous government when they were trying to remove subsidy to channel the funds to capital projects.

I can still remember when GMB was interviewed in 2011 in respect to subsidy where he clearly stated that subsidy doesn't exist and that nobody is subsidizing fuel to masses were he went saying "Who's subsidizing Who? "

MY ADVICE

1-The government should with immediate effect focus much more on reviving refineries  to save the value of naira and drastically reduce the landing cost of fuel in Nigeria

2-The government should look forward to utilizing dangote's refinery which is said to be ready in 2018.

3-the government should at the worst scenario embark on the advise of Mr. Kachikwu to allow NNPC filling stations alone to sell at N145 and let other marketers sell above N145 which must be in the shortest possible run

4- The president of Nigeria should please resign from the seat of the minister of petroleum and assign a well experienced and deserved personal as his occupancy of the seat proves nothing positive to be proud of.

QUESTION

1-Why have we not completed works on the PH and KD refineries for about 3years as promised the president?

Thank you!!!

QUESTIONS BUHARI'S LED ADMINISTRATION NEEDED TO ADDRESS BEFORE GOING ON WITH THE DIVERSIFICATION AGENDA.

By Muhammad Basakkwace 

It's high time we think above our ears, Buhari's led administration is trying to please the masses using a wrong channel.

The buhari's administration  always talk about diversifying to agriculture, which I believe is not a bad idea but can not work for now. Below are the questions one need to ask him self before thinking about diversifying.

1-do u know that diversifying means competing with foreign products?

2-How do u expect nigeria to be agriculturally productive when inflation is at almost 20%?

3-when imported commodities are cheaper than the locally produced commodities even at a consumer price? 

4-when the level of depreciation Of Naira will make the farmers access imported machines at a higher price?

5- how can we diversify when developed countries farmers access loan at 0-1-2% interest?  

And list goes on and on.

Do not quote me wrong! it's obvious that there's need for us to diversify, but if the above stated problems are not being addressed, the diversification agenda of buhari will remain and be seen as the WORST AND THE BADDEST investment ever on agriculture. 

This kind of bad foresight is what leads to the abuse of Africans by the likes of trump and Netanyahu of Israel. 

PMB's TAKE ON BUDGET PADDING

I Quote  "I nvr knew what is called padding until this year, they allowed us to talk and do our "dogon turanci" I went and presented the budget and then they decided to pad it

It's a very very embarrassing and disappointing development which I think we wouldn't allow to go unpunished"

Abdulmumin Jibrin the whistle blower exhaust tireless effort by publicly exposing how budget was padded and also expose huge corrupt practices in the house of assembly but only to be suspended in return, under the watch of PMB.

Na GOD go save Nigeria.

-Muhdbsk 

Q&A: IS PRIVATIZATION THE ONLY WAY OUT OF RECESSION IN NIGERIA? AND WHAT IS THE IMPACT OF PRIVATIZING A PUBLIC PROPERTY? - A CASE STUDY OF 2016 ECONOMIC RECESSION IN NIGERIA.

The answer here is NO! Privatization is not the only way out of recession.

what really came up was on  how to get out of recession in the last quarter of the year? The problem in view here is on the fastest way of getting out of recession in the short run. 

Well in my own view, I think there are two things involve 

1-lack of hard currency in the economy 

2-no enough money in circulation 

    Normally when an economy is facing this kind of challenge, it mostly affect other factors which if not properly taken care of, the economy will eventually be in recession, which is what we are facing now.

Therefore CBN As the Apex financial authority are to come up with a policy that'll inject money in the economy maybe through low interest rest or reducing the cash reserve ratio to enable commercial banks to have access to more money that can be accessed by the masses through encouraged loans of low interest rate.

Mr Godwin of CBN took that step by injecting N1trn in the economy through banks but unfortunately it didn't work because the banks focused on giving loans to traders instead of empowering entrepreneur and farmers,there by the traders went purchasing foreign currencies for the normal importation of goods which eventually devalues naira the more, because  of the "free floating exchange rate policy" we have in nigeria.

The next question here is, then what can nigeria do to get out of recession? For recession is getting worst by the day, people are already starving, therefore the federal government threw a challenge to the economists to get nigeria out of recession, that Nigerians doesn't even want to hear the problem but the solution.

Well there's no economic policy in this world that can help nigeria get out recession in the short run, 

For any policy to be adopted can only work in the long-run which we believe Nigerians are to impatience to resist a long-run effect.

There come dangote, saraki and others debating on how to get money that can be injected into the economy. (Refer to my previous post on selling of oil assets or borrowing-a way out of recession).

THE POSITIVE IMPACT OF PRIVATIZING OIL INDUSTRIES IN    

NIGERIA.

1- it will curb the problem of recession in the short-run and in the long run it'll be a major contributor in stabilizing the economy.

2- Nigeria will have a whopping amount of $50B to inject into the economy in which this large amount of money that can used to revive agriculture and will also increase the production and investment level of nigeria.

3-it'll ease the stress of nigeria looking forward to borrowing of $2B to fund the Budget of change.

4- privatization as a whole plays a vital role in promoting the efficiency and the effectiveness of  any public sector being privatized   

To mention but few, there are also  some cons in privatizing a government property but in the kind of stage we are, and the kind of people we are governing the pros of privatizing the oil assets are more of the cons.

Indeed privatization has it own cons which are very obvious and can be well stated but considering the kind of situation we are being faced with we have no option but to privatize.

Assuming we take a particular policy that will help us get out of recession in the long-run (2-3-4-5 yrs)  coz we believe privatization may not be a good idea. What do u think will happen if 

1-Dollar hits $1-N1000

2-inflation rose to like 20%

3-un-employment rate increase

4-level of crimes increase

5-foreign investors continually taking their money back home

6-nigeria continually be looking forward to get loans to fund budgets?

Assuming all is well in nigeria, believe me I'll be the first person to against the sell of any asset considering the disadvantages.

-Muhammad Basakkwace 

HOW BUHARI CONTRIBUTES TO THE CURRENT ECONOMIC RECESSION.

Indeed For every policy has its  pros and cons,  that of buhari are more of cons than pros,the recession in Nigeria is clearly artificial (lack of good management) not as a result of natural phenomenon, Nigeria's economy of today isn't supposed to be in recession putting the recovered looted funds and the leakages covered by the current administration through implementation of TSA in place, the fall in the price of oil is indeed caused as a result of natural phenomenon, but it doesn't mean Nigeria should be in recession being Nigeria a country that depends on oil, there are so many ways that government can source their  revenue , that brought the rise of the welcome development that Nigeria was able to manage it expenditure with 70% non oil revenue showing the lessen dependency on oil as almost sole source of revenue.

The Nigeria's budget (budget of change) was put in place with a bench mark of $30 per barrel. How much is crude oil per barrel now?  It's being soled at $51 per barrel as of yesterday, the excess $21 are supposed to go to excess crude account. Buhari told us he was able to mop out 2.3trillion in few months through the implementation of TSA that was initiated by the previous government. Was't all lies or political propaganda? 

How do you expect a government of deceit to go without being in recession? It's a government of deceit because the messiah(buhari) promised clearly that he won't probe anyone but he'll jail whosever try looting  from his administration, how do u expect us not to be in recession when the corruption war it self is lopsided? Do you think the niger delta avengers are  existing because they want money or something from buhari?  No!! It's clear and obvious that they are only bombing and crippling the economy because of the lopsided corruption war waged by buhari, without the bombing of the pipelines, Nigeria's budget can be fully funded without external debt.

"Buhari" the pro-buhari's messiah traveled to London for mere ear treatment after allocating N4 billion Naira to the villa's clinic, weren't you inquisitive to know how much it cost for those 10 days? Buhari was unable to give dollar at an official rate to Nigerian students in diaspora but rather be saying we have educational institutions in Nigeria that they should all come back and continue from here, is he being just to them?? When two of his children recently graduated from a UK university in London, is he being just to Nigerians?

What about the presidential fleets that he was complaining of? Are they still there or they've been sold like he promised? In order to reduce the cost of governance as he said earlier.

What about oil subsidy that buhari said it was fraud? He clearly said in an interview that there's nothing like subsidy, that he'll call for the attention of petroleum economists to explain what a subsidy is to him, that he went asking, who's subsidizing who?? 

And now coming back to tell us to bear with him and and buy petrol at N145 that he's removing subsidy that he once told us was a fraud, is there just in this?

How do you expect this kind of economy not to be in recession?

An economy were someone can sit in his garden and make some billions without investing a kobo. Is that the equal distribution he promised us?

A government that is full of propaganda, full of promising and a failing statements. 

 Initially I thought buhari came to rescue Nigeria not knowing that he's only a hungry lion craving for power.

This reminds me of when buhari was saying it's unfortunate and disgracing for a country like Nigeria not to be able to pay salaries, so I don't know whether if  it's fortunate and appraising that some state governments are still suffering from the same under the watch of buhari-The messiah 

Buhari subsidized dollar for pilgrims when nigeria is already in recession! doesn't it sound uneconomic?  

-Muhammad Basakkwace

SELLING OF OIL ASSETs OR BORROWING OF MONEY-A WAY OUT OF RECESSION IN NIGERIA.

As we all know, nigeria is in recession and its getting worst by the day, which eventually gave rise to a search for an immediate solutions to the economic  hardship Nigerians are facing. 

It all begins at a point where the Nigeria's  business tycoon Alh. ALIKO DANGOTE  came up with an idea that nigeria should sell NLNG off In other to have money to inject into the economy as this recession is getting worst. He also advise nigeria that through the sell of an asset, the country  will at least curb the issue of  shortage of hard currency in the short-run, believing that injecting a whopping amount of $10b In the economy may lead to an appreciation of Naira  to $1-N240 or less.

Speaking from the upper legislative chamber, the senate president urges Nigerian government to adopt the advise given by dangote and sell off some non oil assets like NLNG that nigeria need an immediate solution to the issue of hunger (inflation) that is all over the nation.

Nevertheless, the revenue mobilization allocation and fiscal Commision RMAFC strongly disbelieve in any idea of selling an asset that it's not rational for any asset to be sold to meet up a short-term financial obligations, that the FG can still Borrow the same amount from IMF and the revenue from this assets can also be used to amortize the loan.

MY OWN VIEW

 I want to believe both the parties have something in common, that we need money to meet up a short-term financial obligation. But where they part is on how to get the money , at this point one needs To sideline one of the parties, in my own view I think I'll go with the dangote's idea of selling off an asset than borrowing From IMF, Below are my reasons.

1-IMF debt come along with some rules that'll favor them

2-borrowing from IMF is another form of modern colonialism  I.e the worst form of imperialism

3- IMF debt bailout  deepen rather than solve economic crises for example during the financial crisis of Mexico, Thailand, Indonesia, Russia and Brazil in 1997. The IMF came in as a lender of last resort, and yet the IMF bailout in the financial crisis did not stop the financial panic but rather the crisis deepens and spread out to more countries 

4- "If I had challenges in my company, I would not hesitate to sell assets, to remain afloat, to get to the better times, because it doesn’t make any sense for me to keep any assets and then suffocate the whole organization"(dangote 2016)

5- through the sell of an asset, the government will peacefully inject it's money in the economy without thinking of some ties that may have come along with when indebted. 

I believe there are so many reasons any one can give that may favor selling an asset to be a bad idea, but believe you me borrowing from IMF is economically more dangerous than selling an Asset.

-Muhammad Basakkwace

TEN WAYS THAT CAN HELP NIGERIA GET OUT OF ECONOMIC RECESSION IN THE LONG-RUN .(in a

1- industrialization 

2- entrepreneurship

3- curbing corruption by ignoring what have been looted earlier and focus on how to put in financial discipline to Nigerians.

4-a very strong economic team

5- diversification of the economy not only to agriculture but through utilization of our mineral resources to the fullest.

6-withdrawal of the free floating exchange rate policy pending to be adopted later. I.e when the refineries are fully working.

7-adopt some policies that'll encourage Foreign investors and favor the country as a whole.

8-encourage Privatization along with a policy that'll favor the government.

9-the state governments should be encouraged to adopt an effective tax system.

10-stop blaming the previous government and be thinking of a way forward.

 - Muhammad Basakkwace