Awaiting N40 Per Litre Fuel

TAMUNOEMI Sokari David-West's fame as Professor of Virology at the
University tends to obscure his involvement in politics where his
services as Commissioner for Education (Rivers State), Minister of
Petroleum, and Minister of Mines, Power and Steel, all under military
regimes, are well known. He is one of those tipped for cabinet
membership in the in-coming government.

It could be on the authority of these pedigrees that he affirmed that
Maj-Gen Muhammadu Buhari would reduce the price of fuel to N40 per
litre. He did not say what the price of kerosene, a product majority
of Nigerian urban dwellers use, as cooking fuel, would be. It is
equally doubtful that he spoke on the authority of the
President-elect, General Buhari. Did he speak, leaning on his
understanding of the economics of oil and gas or as a counterpoise to
government's reduction of the price of fuel to N87 per litre, which
some saw as a campaign gimmick?

Whatever informed the position, those who know that David-West, 78,
was Buhari's Minister of Petroleum, 31 years ago, may consider his
proposed price of fuel to have some substance or was it David-West's
way of protecting his principal, in case the price of fuel became an
election issue? How did he arrive at his figure?

Nigerians would be interested in any government policy that would
reduce the incremental hardships that they have seen through various
regimes. Fuel is so central to Nigerian life that they would support
policies that would make it available and affordable. They would also
want to know how lower fuel prices would affect other sectors of the
economy. Would the price go down because of subsidy?

The major determinants of the price of fuel are cost of products and
distribution. They have not been addressed and they do not seem like
issues that could be resolved in months. Adequate domestic refining
capacity, for domestic consumption, would eliminate cost of
importation, which high exchange rates exacerbate. Domestic refining
would, also, create job.

Distribution challenges are evident from burst pipelines to the
celebrated chaos on the Apapa-Oshodi Expressway. They have great
impact on the price of fuel, in addition to indeterminate costs like
charges marketers pay at the depots. These are obstacles to cheaper
fuel and some interests have over the years elevated them to prominent
features of the economics of the industry.

Sustainable solutions that include functioning refineries, new
distribution logics with primacy for the rails would crash the price
of petroleum products perhaps below David-West's projection. Nigerians
await solutions to national challenges that look beyond immediate
applause, but we have to abridge expectation with hard work.
--Vanguard