• Thursday, July 18, 2024
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BusinessDay

What about diesel, kerosene?

In break with tradition, Nigeria’s external reserves fall as oil prices rise

Both of these items equally need some form of surgery, some form of quick action pronouncement followed by a unilateral price cut like was done for Petrol last week.

Their case is simply a tale of two oils. One is under the grip of ‘market sharks’ and the most vulnerable one is an orphan. The first one is a symbol of executive office and how it greases official corruption wheels, a classic case of deregulation gone wrong-diesel, and the other one, the orphan-kerosene that illustrates how defenseless the poor can be.

Diesel sells for N150 per liter, and it is a familiar liquid for the privileged few that has formed themselves into a chain gang where tolls are charged for every drop. A liter of kerosene goes for N130, if you are lucky to find the product near you.

The diesel market is deregulated and just like petrol, the government still heavily subsidises kerosene.

So what is the problem with their pricing when they are all products made from a barrel of crude? Simple. The distance between the products producers and the consumers coquettishly got over stretched. You may add this too-petrol is the monster long unleashed on Nigerians. The people are now gripped by its fear after several years of torture perpetrated in the name of petrol. This makes it easy to manipulate the people with petrol more than with diesel or kerosene.

So you have the producers who charge the transporters who charge the market finders who charge the storage company who charge the distributors who charge the sellers who finally charge the consumers. The chain of gates reads like police check points along the Benin-Ore road before they were effectively dismantled-the port, market tankers, big trucks, peddling trucks, roadside tanks, jerry cans and bottle retailers, all of these add up to the final cost borne by the consumers. The executive arm of government and their travelling cohorts mounts all of these roadblocks.

Read also: Oil marketers blame NPA for high prices of AGO, Kerosene

True, this chain of brigands is unlikely to blink off in the near future. Believe, it will only take a hardheaded strategy by a hardheaded leader to dismantle. It is indeed very entrenched and all governments since oil became the cash cow just kept on refining and improving on processes to see the oil sector run down, dithering about setting a sensible framework for private sector involvement or for effective management of the Nigerian oil wealth.

I can understand why the executive is the sole dancer to this private song. They are the biggest beneficiary of do nothing in the sector- I must confess I borrowed this description from a prominent friend-that is why it is even more difficult to let go the sale and pricing of petrol for now.

Perhaps the petrol price reduction from N97 to N87 per liter is a giveaway-evidence that the executive-the only controller of oil matters-is a hipster orchestra conductor, favoured by itself and its clappers who want their delusion of control served with a side of nostalgia, and not the reality of the questions flying around them about their competence and corruption in managing the oil sector.

A better course-of which am certain is not lost in them-would see the executive (the Presidency) loosen the oil sector corset, while announcing a clear cut deregulation that will include the unbundling of the Nigeria National Petroleum Corporation (NNPC).

Anther feasible step, which again am certain they (both the executive and the National Assembly) know-is also the unbundling of the Petroleum Industry Bill (PIB). The best approach to this is to hang on to that which is so dear-the NNPC, which is regarded largely as the political part of the Bill and peopled by a bunch of yes-men who don’t know what they are saying yes to. Pass the fiscal side head-on. This certainly will stir a lot of interest because it would create an environment where everyone breathes-funds will be free to run wild and some vigour will return.

What is clear is that the oil sector requires a thorough review and the opportunity for that has been provided by the tumbling oil price. It is an opportunity to hands-off oil by the executive and let the sector determine whether to die or survive. The sector doesn’t need any executive interference anymore. That is obsolete and this has been demonstrated by countries elsewhere that were before now choked by the stench of crude oil. They let it go.!!!