When we were protesting, we were calculating only the cost of production, consisting of the cost of crude and the cost of refining. We did not realise that the ever weakening value of the Naira made this an unwinnable price war for the reason that forex was expended on importation of fuel. With this Government the problem has manifested in a different way. With low crude oil price, it became clear on the eve of the elections that there then was profit rather than subsidy on the exchange rate prevailing at the time. The Government of GEJ tried to win public goodwill by reducing the price of fuel much against my own thinking and voiced opinion that the windfall should be retained to recover previous losses and act as a hedge against future rise in the cost of importation. The Jonathan Government was compelled by the campaigns of APC to move from profit position on the price of crude when it reduced the price from N97 to N87. But immediately, the value of the Naira began to plummet rapidly thus wiping off the margins in Naira terms between importation costs and sales price. Muhammadu Buhari administration did not react intelligently to the situation when it further reduced the pump price to N86.50 in order to give some credibility to its election campaign position and promises. But by this time analysts like my humble self had seen the bottomless hole and had been shouting that only total deregulation would pull the Government out of the hole. Muhammadu Buhari dug into his position and was indirectly subsidising fuel in trillions of Naira represented by the difference between the Landing Cost of Fuel and PMS Official Selling Price of N148. But Nigerians are buying PMS at average price of N300, casting much doubt on the recommended N148 pump price. The Government got its fingers burnt terribly and Nigerians suffered so much.
– Chuks Nwachuku
