Governor of Lagos State, Babatunde Fashola has questioned the Federal Government’s reluctance to cut pump price of Premium Motor Spirit (Petrol) from N97 per litre following the fall in the global oil price.

The Governor said “We should be enjoying cheap fuel if the price of oil has dropped globally. And even as we import the product, a major component has reduced in price. While this has reduced, the pump price of fuel in the country still remains the same. Then something is wrong. If the price increases in the country when the price of oil goes up globally, then it should also reduce when the price of oil drops.

“I understand that I am not an economist; they (Federal Government) are the economist. But I have some logic and common sense to ask critical questions. For instance, if one buys flour at N10 per kilogram, and the bread was sold at N1 per loaf, if the price of flour drops, the price of the bread should also change.”

He also noted that the Nigerian economy is not doing well and many people have to survive through whatever means.

nonen:
Yea. Fashola has the local logic correct. However there's an expected increase in fuel pump price due to the dollar-naira exchange rate disparity. Since the naira is losing weight against the dollars, the importers will have to pay more to import the product. Fashola logic would have worked only if we refine the crude here.

nonen:
Yea. Fashola has the local logic correct. However there's an expected increase in fuel pump price due to the dollar-naira exchange rate disparity. Since the naira is losing weight against the dollars, the importers will have to pay more to import the product. Fashola logic would have worked only if we refine the crude here.

Obiagelli:
Isn't this the best time to remove their phantom subsidy?

Crocz:
He absolutely right....Nigerians are just insensitive to situations like this, we should be buying petrol less now


But the government can't afford to do that cos the revenue will go down low even more...so when people protest it, they'll just say they are implementing full subsidy removal and in the end, it won't matter

chemali:


This is the best time to remove the subsidy. Instead, we are told the subsidy would be halved next year to 450 billion (I don't know who they are deceiving). The system itself is messed up. Even if the price of petrol doesn't drop, why is diesel still priced highly? Even though the naira was devalued, there should have been a difference.

Obiagelli:

A lot of difference by my own calculations.

revolt:
once more lemme ppl again!! It doesn't affect the price cos were importing and not producing bulk of it. Only way we can start producing is deregulation n total govt handsoff the sector. Capitalism is our christ for now.

Subsidy must go or our children will still be facing same issue 60yrs from now.

Bayswater:


Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel.

post=28662963:
If subsidy was removed, we would have been enjoying the drop in oil prices. But the issue is that, when the government go ahead with that plan, Lagosians will "occupy Ojota for six months ". You cannot eat your cake and have it.

revolt:
oga whoever is importing diesel will not reduce his price, cos it profitable. If we were refining then wed hve a case but infact, its even more expensive to import now with devaluation of naira. The subsidy must go

nonen:
Yea. Fashola has the local logic correct. However there's an expected increase in fuel pump price due to the dollar-naira exchange rate disparity. Since the naira is losing weight against the dollars, the importers will have to pay more to import the product. Fashola logic would have worked only if we refine the crude here.

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.

nonen:
Yea. Fashola has the local logic correct. However there's an expected increase in fuel pump price due to the dollar-naira exchange rate disparity. Since the naira is losing weight against the dollars, the importers will have to pay more to import the product. Fashola logic would have worked only if we refine the crude here.