When you are admitted to study Economics in the University, the first topic you will be exposed to is Demand and Supply with Equilibrum. You will then be introduced to price levels and an equilibrum price. This is done to make you a more rational producer and consumer as well. I have been trying to practically analyse these relationships for year in the real world situation, to enable me understand the oil markets both domestic and the global markets, especially during the GEJ petrol pump price regulation when the Former CBN Governor and his other Economic council members advised him to revised the price. Although many Nigerians were so frightened about the price hike, i was somewhat indifferent knowing fully well that the oil market is selt-regulating, although happens in isolation most of the time. From my observation, the Crude oil price in the world market has fallen since June from USD:115 to USD:65, a price fall of more than 40percent. In a situation of Ceteri-Paribus, this should be backed by the general fall in petrol and all other crude oil BPs, the pump price of petrol in the Nigerian markets should also fall in response to the general fall in the world market prices. The response we get here is the Nigerian Naira Devaluation, putting the USDollar high above the Nigeria Naira, making your N100,000 savings/investmen fall to N79,000. (correct me if im wrong) and making Nigerians pay higher in the forex markets. This are dangerous economic policies. we should have a benefit of falling petrol pump prices as well here in Nigeria to complement our losses.
Posted on: Sat, 13 Dec 2014 07:59:57 +0000
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