However, in the wake of the pseudo deregulation of the petroleum downstream by President Obasanjo in 2004, which provoked robust opposition from Labour and the Nigerian public, on the adverse impact of higher fuel prices, this writer authored two articles titled, “The Mother and Father of Fuel Prices” (November 22, 2004) and “Only a Stronger Naira Will Stop Rising Fuel Prices” (August 22, 2005) in Vanguard Newspaper, see www.Lesleba.com. Deregulation would mean competitive market determined prices for fuel, and should equally drive improvement in supply and customer services in the downstream sector. Instructively, such a responsive exchange rate mechanism will either stabilise or even reduce domestic fuel prices even when crude oil prices rise. From the preceding, it should be evident that the single most important factor in the determination of local fuel prices is actually the naira exchange rate. Indeed, in a deregulated domestic market, fuel prices will invariably move in sympathy with international crude prices, but the appropriate and sensible management of increasing dollar revenue from higher crude prices, will determine the naira exchange rate and consequently the domestic fuel price.

Source: Punch January 08, 2018 04:18 UTC