Following an increase in petrol price, the Former President, Nigeria Association for Energy Economics and Professor Emeritus in Petroleum Economics, Wumi Iledare on Wednesday, said the product price at N161 per litre is unsustainable considering the current exchange rate.
He also asked Nigerians to brace up for more hikes and get used to the deregulated sector, stressing that the price would settle in the long run.
In an interview with the Tribune Online, Abuja, he said in his opinion, the Federal Government (FG) was still being lenient with the current price rate, compared with the prices obtainable in other West African countries.
“Looking at the exchange rate and looking at the landing cost of petroleum products, in my opinion, if you compare that price with what is being paid in Ghana you will be shocked that this is even a giveaway,” he said.
He described the current price as a “give away” saying;” The price as it is now looking at the exchange rate is still a giveaway and the only reason why it is still this low in my own opinion, looking at the circumstances of things is the fear of social unrest.
“We should prepare ourselves because this price of N160 a litre is not sustainable.”
The Professor explained that the country would still have fuel price issues to contend with except it fixes its refineries.
“when you don’t have a refinery that is working and you still have to depend on import with an exchange rate that is going off the roof N160 per litre is not Sustainable because there is no country surrounding that is selling a litre of PMS at N160 go to the Niger Republic, Cameroon, Ghana, Senegal, there is no country in West Africa sells petrol at N160.
“It is better for us to get used to the deregulated market cause, in the long run, it will settle down. What we have now is not Sustainable unless the refineries are working and the labour force is low and the price we pay for crude is at a marginal cost plus. That is the only way we can sustain N160 per litre.
Also, he noted that the country cannot survive a situation where 50 per cent of its foreign exchange demand is for oil export.
“…..a nation cannot survive like that. What we have now is like 40cent per litre. Go all over the world and show me where you can get fuel at 40 cents per litre,” he noted.