• Says N145 per litre won't crash Naira
The Nigerian Association for Energy Economics (NAEE) said yesterday that the new pump price of petrol would not diminish the value of the naira as being feared in some quarters. It said oil marketers will be looking beyond the bureaux de change to source for foreign exchange for petrol importation.
President of NAEE, Prof. Wumi Iledare, said in Abuja that fears that the new price modulation would crash the naira were misplaced although he was quick to say that some macro-economic shock was inevitable.
He stated that there are dedicated markets where such huge demand for foreign exchange could be sourced.
"You can expect some macro-economic shock. I do not expect that the place where the marketers will be getting forex is where furniture importers will have to go. It depends on the volume of forex you need that will give you power to negotiate," he said. "The price we pay for a dollar is not necessarily uniform across the sectors. Even without going through the government it's still possible for marketers to source the dollar independent of the bureaux de change.
"That's why the minister wasn't using forex rate obtainable in the bureaux de change to calculate the price of petrol imports because there are other alternative sources for this type of market."
He maintained that offshore traders know that there's no better place to invest than Africa right now, adding that all we need to work on is the rule of law.
He added: "When I talk about parallel market I'm not talking about bureaux de change. I'm looking at alternative sources of forex that do not necessary have to be resident in Nigeria.
"Why then would they go and import petrol if they don't have alternative ways to pay? For example, if Shell or Total is interested in getting forex for petrol import do you think they will go to the bureaux de change? All of these things will play out easily if the rule of law is allowed to govern the process."
He further stated that the federal government should completely deregulate the downstream sector of the petroleum industry to attract investments, and declared that setting a price cap of N145 per litre for petrol was wrong.
Rather, Iledare said a complete deregulation that allows market forces to determine the price of the product should have been adopted.
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