Last Friday, October 11, 2024, I listened attentively to a panel of experts and stakeholders on the BBC program Ra’ayi Riga, anchored by Umaima Sani Abdulmumin. The program ended with a significant doubt in my mind regarding a matter purported to be a provision of OPEC and crucial to the price of petrol in Nigeria.
Tyranny
I could not fathom how particularly the representatives of NNPC and IPMAN stressed that Nigerians would be at the mercy of two variables: the international market and the price of the US Dollar in Nigeria. They stated that the OPEC agreement compels member countries to sell allocated domestic crude at international rates, even if refined locally. One of them even mentioned that the Iran-Israel conflict could cause the domestic price of petrol in Nigeria to rise. 😳
So, we should expect higher fuel prices anytime the rate of the dollar appreciates in Nigeria and also when, for any reason, there is a rise in the cost of crude in the international market. It is the rule, according to them. Our fate, they claim, is sealed, regardless of our OPEC membership and the Dangote refinery. Nigerians will no longer have a stable fuel price.
Trust me, in Nigeria, the equation will be simultaneous. At any given moment, a reason will be found to use either or both parameters to increase the pump price. The target of the government is to extract more revenue from citizens while the businessmen in Dangote, Major Marketers, NNPCL, and IPMAN continue to feed their greed for endless profit with our blood.
One would wonder why OPEC would be so oppressive in inflicting such tyranny on the citizens of its members. Senator Ndume, who was on the panel, said if he cannot understand why, how would they expect a commoner sitting under the tree to do so?
The Truth
The truth is that there is no provision like that in OPEC agreements. In fact, the very idea of a domestic crude quota arose in the realization that citizens of member countries may need to enjoy cheaper oil than the international market price. That is why those citizens have been enjoying cheaper fuel for the past five decades in different countries. Many still do. Why not Nigerians?
If you ask ChatGPT whether the OPEC agreement compels member countries to sell crude for domestic consumption at international market prices only, this is the answer you get:
“OPEC (Organization of the Petroleum Exporting Countries) does not directly compel member countries to sell crude oil for domestic consumption at international market prices. OPEC’s primary role is to coordinate and unify petroleum policies among member countries to stabilize oil markets and secure a steady supply of oil.
“However, OPEC’s production quotas, agreements on output levels, and policies can indirectly influence domestic oil pricing. In practice, many OPEC members choose to sell crude oil domestically at subsidized rates or prices lower than the international market. This decision is made at the discretion of individual member countries, often as part of national energy policies aimed at supporting domestic economies and industries. Nonetheless, these policies may vary from one member country to another depending on domestic priorities and economic strategies.
“There is no formal OPEC rule that requires domestic sales to match international prices, though they can be influenced by international agreements and market pressures.”
The Truth
The truth is that the President and Minister of Petroleum can sell our 445,000 barrels a day to Dangote at even N50,000 per barrel after taking into consideration the cost of extraction, and OPEC will not raise any eyebrows. Dangote can charge the cost of refining, add his profit, and sell to NNPCL and IPMAN at, say, N300 per litre. On their part, the marketers will add their cost of transportation, storage, profit, etc., and sell it to Nigerians at N400 per litre. And—boom—we all will be happy.
It is entirely at the discretion of the President and his government. So whoever wants to sell our locally produced fuel by that simultaneous equation is on his own. There is no OPEC in the equation.
The Squeeze
Also, among those who would fight against Nigerians enjoying affordable fuel rates are the IMF, World Bank, and the West generally. They want the government to squeeze us more so that we can service our debts and collect more loans from the Shylock. The age-old philosophy is: our poverty, their wealth; our pain, their joy.
Added to these are local liberal economists who believe in high taxation, claiming that the blood money will be used to develop our infrastructure, health, education, etc. It is just the same old bunkum selling since 1986 at the debut of Naira devaluation while our infrastructure, hospitals, and schools continue to deteriorate in rebuttal of that thesis.
A Call
I call on the President to consider the low-income status of our citizens. Only an affordable fuel price will hold together our social fabric, ensure our prosperity, and guarantee our security. It is zero subsidy because we are not buying it from anyone. It is our oil.
The President must keep in mind that the IMF and oil magnates are not his partners in 2027. He is on his own. They will be there to outlive him and work with the next President. Let this sink into his psyche. Tam!
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