N97-N87/Litre:THE GLOBAL VIEW AND ITS IMPLICATIONS By Yusuf Odaudu. The Minister of Petroleum in a press statement announced a Ten(N10)naira price slash in Premium Motor Spirit(PMS) from N97-N87/litre as a result of deregulation of crude oil prices in the International Market. The statement in itself is completely self-explanatory,so why are nigerians fanatically attributing this price reduction to the presidents so-called benevolence and quickly using it as a campaign tool to secure votes?Are we that naive and mentally regressive that facts can be manipulated right under our noses even after the reasons to a governmental decision was clearly stated in a press conference?If YES,then here are some facts to devour aimed at making us aware of our stands as an oil producing nation and collectively come up with ways to forge ahead admist a declining Global Economy. OIL PRODUCTION:THE GLOBAL SCOPE According to International Energy Agency(IEA),the top 10 Oil producer countries accounted for over 63% of worlds oil production in 2011.The top 10 oil producers also accounted for 64% of worlds oil production in 2012.The top oil producers in 2012 were: 1.Russia 554Mt(13%) 2.Saudi Arabia 520Mt(13%) 3.United States of America 387Mt(9%) 4.China 206 Mt (5%) 5.Iran 186 Mt(4%) 6.Canada 182 Mt(4%) 7.United Arab Emirates 163 Mt(4%) 8.Venezuela 162 Mt(4%) 9.Kuwait 152 Mt(4%) 10.Iraq 148 Mt(4%).As at November 2012,Russia produced 10.9million barrels of crude oil/day while Saudi Arabia produced 9.9million barrels/day.So much crude oil produced by just two countries one would say,isnt it?A critical look at the oil- producer lists that comes up yearly cleary expresses a steep competition in oil production with countries pushing production to limits so as to push themselves (vertically) position-wise on the volumnal list,hence obtaining power. In retrospect,Oil was a hot topic at the Global Elites annual gathering in switzerland six years ago.It promises to steal the spotlight this week at the World Economic Forum in Davos,only this time,instead of debating how to find enough energy to power the global economy,executives and policy makers will seek ways of curbing the excessive supply of crude oil and it being the major causative agent in Global deflation. Back in 2009,while Sen. Barack Obama was taking his Oath of Office,his major priority was to reduce Americas dependency on foreigh crude oil.Fastfoward to 2015,U.S shale producers are pumping nearly 4million barrels a day,more oil than Iraq.USAs energy boom is not the sole factor behind the dramatic price swing.Other producers,including OPEC,have been pumping away furiously,taking advantage of price around $100(USD) a barrel.Due to a sky-high increase in production and excessive aavailability of crude oil,prices have collapsed to $50(USD)/barrel,hence a reduction in global economic growth,energy efficiency and alternative energy sources have drastically dragged down demand for crude oil and its products. Though i love being and want to be optimistic,it saddens me to say that relief wont be coming from OPEC anytime soon if Saudi Arabia and its Gulf neighbours have their way-as they always do- Saudi Arabia,which has always played the balancing role in world markets-pumping more when demand is strong and slashing supply when demand slows- seems to have had enough.In a press conference held with Saudi Energy Minister,Ali Al-Naimi said We are tired of playing Big Brother,its time U.S and Russia do their bit.Saudi Arabia are certainly not going to cut.He further said this position we will hold forever,not just 2015.Relative to that,its not doubt going to be painful year for oil and gas companies and markets that depend extensively on energy exports i.e Nigeria. In a nutshell,the Nigerian Governments decision to enforce a N10 price slash is not a benevolent gesture but rather a compulsorily strato-economic decision in line with the recent global deregulation of crude oil prices in the international market.For Nigerian consumers,the deregulated prices of crude oil since October 2014 has not translated into any change in diesel,kerosene and PMS prices. Price of diesel has been deregulated since 2009 but still sells at N150-N170/litre(the same pump price when the international benchmark per barrel of crude oil was over $100(USD).Now the international benchmark has dropped to $47.50(USD) per barrel at Monday. So the big question is :Where is the deregulation and relief which it ought to bring to local consumers of diesel?Some school of thought say these amounts are being stored up in our Foreign Reserves.If it is truely so,then why are our Foreign Reserves rapidly drying up instead of getting obese?(Pardon my sarcasm).As it stands,the maximum amount local consumers of diesel should pay is at a margin below N100 per litre.Therefore,Nigerians are being shortchanged by about N50-N70 on every litre of diesel sold by the government. My Conclusion:This article isnt intended to throw stones at the government or play the blame game but rather as an eye-opener for the populace.Personally i have no issues with the GEJ-led administrationt(or any government for whatsoever) because to me we will keep replacing bad governments with another(for those that understand the Big Scheme).Having read the above global facts,figures and trends,how dare you attribute the N10 oil price slash to our president knowing fully well Nigeria is an OPEC country and works strictly with policies and regulations as stipulated by the governing body?Why must Nigerians be swift to fool themselves even before the politicians think of doing so?Why have we lost the intelectual capacity to ask the right questions and possibly get the right answers on which we can forge our decision- making on?PDP,APC,AC or blah,blah,blah...have all proved that they lack what it takes to deliver a sustainable economic growth.What matters is You & I.What are you doing to change yourself and your primary environment? #ThinkAboutIt Good Morning Ife Students
Posted on: Tue, 20 Jan 2015 07:32:55 +0000
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