PwC: Why Local Refining Won’t Crash Fuel Prices

 

*Says current subsidy structure not benefitting Nigeria’s poorest*Advocates evidence-based palliatives to cushion impact

Price Waterhouse Coopers (PwC) has argued that in-country crude oil refining may not significantly reduce petrol prices because the costs of haulage, insurance and associated cost of importation do not constitute the most significant component of cost across the value chain.

In a report released by the global organisation which offers clients various professional business services, including accounting, auditing, human resources consulting, and strategy management, it picked holes in the general belief that local refining of crude oil could potentially eliminate the need for petrol subsidies altogether or make the market price affordable.

It argued that unless the international price of crude oil falls below a certain level, while local refining will provide a price cushion, it is not a silver bullet that would magically solve the subsidy problem.

OPINION: WHY THE PRESIDENT MUST NOT DO CASH PALLIATIVE OF N576 BILLION

By : Gbenga Adeoye

 A. There is no doubt about the fact that President Tinubu mean well for Nigeria and Nigerians.

B. He is one Politician on Nigeria's soil that has found help from the throne of Grace and that is why he won both primary and the Presidential election.

C. There is also no doubt that he has been preparing for this position from the day he resigned from MOBIL.

Economy requires carefully planned policies

NIGERIANS have endured a month of rising adversity as President Bola Tinubu unleashed a barrage of shock measures. The naira crashed toover N800 to $1 midweek before settling to N775/$1 by weekend. Higher electricity tariffs are imminent; more multinational firms are heading for the exit door; inflation is reaching for the sky, and about 7.1 million more persons are forecast to plunge into extreme poverty. Beyond drastic decisions, Tinubu should adopt thorough planning, preparation, and fallback measures to avoid creating bigger problems than he set out to solve.

For an economy of over 200 million persons, 63.6 percent of whom are living in penury, Africa’s largest, disarticulated, often dysfunctional, driven largely by the informal sector, and built on weak, compromised institutions, drastic policies must be preceded by exhaustive planning. Additionally, there must be simultaneous programmes to raise state capacity, protect the most vulnerable, and manage the inevitable fallout.