Deregulation: CBN raises alarm

Central Bank of Nigeria (CBN) has picked hole in the planned deregulation of the downstream oil sector, saying that it will cause inflation. Speaking during the 66 Monetary Policy Committee (MPC) meeting on Tuesday in Abuja, CBN Governor, Mr Sanusi Lamido Sanusi, stated that inflation had decelerated and that seasonal factors and the planned deregulation of the downstream oil sector of the economy pose a major threat to inflation outlook in the near or medium term.

In his submission, the deregulation heightens the criticality of the policy dilemma being faced by the CBN, disclosing that the current accommodative monetary policy could be inflationary.
He stated that this is beside the existing paradox of the co-existence of system wide liquidity shortages as reflected in the data on monetary and credit aggregates and abundant liquidity with some banks as evidenced from the data on standing facilities.

However, a member of the National Stakeholders Working Group, (NSWG), of the Nigerian Extractive Industries Transparency Initiative (NEITI), Mazi Sam Ohuabunwa, has said fuel had since been deregulated in the South-East and some parts of the northern part of the country.
This is just as many Nigerians are railing against the impending deregulation of the downstream sector of the petroleum industry when palliatives are not yet in place.

According to Ohuabunwa, petroleum products had since been sold at market prices, which are usually higher than the government-regulated prices.
Investigations showed that by yesterday P.M.S was selling at between N80 and N90 in Owerri and some other parts of the East. In many parts of the North, the product sells above the official pump price.
“It seems the East and certain parts of the North have long deregulated their own P.M.S. (premium motor spirit or petrol),” the NEITI chieftain said at a one-day road show in Owerri led by NEITI Chairman, Prof. Asisi Asobie.

“So when they talk about deregulation, I laugh. We have long deregulated it in the East and the North - in certain parts of the North. It’s only certain parts of the West and Abuja that are still regulated. That is the way it is. It is not a fair deal that you’re paying for the commodity higher than other people are paying in the country is not the best.”
Ohuabunwa, who is the South-East representative in NEITI, also lambasted the governors of the five South-eastern states for staying away from the accountability agency’s road show in Owerri, which he said would have been an opportunity for them to answer questions on the application of oil revenues, among other issues.

He said of the absence of the five governors from the region who failed to show up, and sent no representatives: “I must say I am not happy; I am disappointed because I am aware that attempts were made to make sure the South-eastern governors are here and I am the representative on the NEITI board. So, I feel disappointed because when you go to other regions, you see their governors – government people are interested in what’s going on. We’ve brought this show here and we can’t find our people.”

Meanwhile, Nigerians have called on Federal Government to rather increase the prices of petroleum products and ensure its availability in the market instead of subjecting them to unnecessary suffering in search of the commodity produced in the country.
This view is being expressed by many Nigerians some of whom have spent several hours on queue at various filling stations in Abuja.
According to them, it is better the product is supplied and available to buy than its absence at the fuel stations thereby forcing Nigerians to sleep at filling stations every day.

Meanwhile, petrol is now being sold at N250 per litre as a press time on Tuesday in Abuja. Fuel scarcity in the country has entered the 7th day with Nigerians counting losses and struggling to cope with the hardship caused them.
Though, there is no increase in the pump price of petrol yet, motorists believe that with the scarcity, if the price is increased above the current N65 per litre, marketers might be encouraged to supply enough for sale.
However, transport fares in the city has continued to increase as a normal taxi drop that hitherto costs between N200 to N250 now goes for as much as N300 to N400.

National President of National Union Roads Transport Workers (NURTW), Alhaji Gidado Haman, has explained that his members have no option than to increase the fares since they go through all kinds of difficulties to buy fuel and most has to buy through black market stating that transport would go much higher if the situation does not improve.
He wondered why Department of Petroleum Resources (DPR) could not do its work of ensuring there is no hoarding of the product by marketers as, according to him, someone is responsible for the flooding of the black marketers in the city and must be checked.