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Just before the battle

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Just before the battle
By Joseph Edgar . . .

It’s 24 hours to the NLC expected ‘war’ against the recent policy on the deregulation of the oil sector. But as I am thinking, I want to scream. These NLC people, do they live in caves.  Can’t they for once In their lives disappoint us and look at the issues at stake instead of taking their usual grandstanding position which is only always aimed at faux popularism.

For them, it’s all about their wages and transport fares. Deliberately blinding themselves to the wider challenges faced by our mono product economy and its penchant of spending one third of its budget subsidizing a product even though the product cascades around the whole economy touching all critical sectors.

The bare faced truth is that the subsidy was just a strong vehicle for massive corruption. It’s benefits reaching only a privileged minority. The very vast majority of Nigerians have never bought fuel at the approved regulated prices despite governments best efforts including the equalization fund which was meant to bridge prices between the hinterland and the the coastal parts of the country. So the continuation of this policy with its attendant drain on scarce resources would only be equated to mass suicide headlined by government.

Oil prices are headed south, shale oil and other western policies aimed at reducing its dependence on oil thereby leading to the shrinking of the markets and also the activities of the renewed militants have all contributed to a sharp fall in oil prices, thereby mutiliating our revenues to the point where our external reserves are facing an anaemic drain. So it will be share madness and Tom foolery for anyone to expect that the subsidy would remain, least of all the NLC.

My only grouse is the insistence by government for the marketers to source its forex from the parallel market. This would put more pressure in that market which itself is not deep enough to meet the demand. This would just lead to them buying from official sources round tripping and throwing the cost at the end user of the product thereby ensuring availability but at a price that would erode whatever gain we might have expected to gain from this removal.

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So government must open whatever window the NNPC used to source its dollars at the official rate when they were  the sole importer of  fuel. Allowing them to buy the dollar at the official price which would intself bring down the prices of the product giving Nigerians succor.

Despite the harsh pain, I support fully this policy and all right thinking Nigerians should do the same if we are going to come out of the woods. Government should reduce its interference in the markets to just a regulatory role and allow the private sector to provide efficiency and competition with the forces of demand and supply effectively inter playing.

Well, on the NLC day, I will enjoy the usual odd football match on the streets while attempting to relax and rest from the hustle and bustle of our lives here in Lagos.

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