•Predicts drop in energy prices, tasks government on self reliance
The Centre for the Promotion of Private Enterprise (CPPE) has warned that the policies of the newly sworn-in President of the United States of America (USA), Mr. Donald Trump, may lead to a drop in prices of PMS, diesel and other petroleum products, with their attendant effects on government revenue and foreign exchange earnings, in 2025.
The Centre, in a statement signed by its CEO, Dr. Muda Yusuf, on Sunday, therefore, stressed the need for government to begin to commit to the policy of self-reliance and less import- dependence in critical areas, to mitigate the effects of such negative development.
It predicted the likelihood of the global oil market witnessing a weakening of crude oil prices, with the current efforts by the US President to broker peace between Russia and Ukraine, a development, it believed, might make the $75 per barrel in the 2025 budget unrealistic.
CPPE also warned that the likely restoration of relationship between the US and Russia, could see to the fall in oil prices, thereby leading to an increase in global oil output since Russia supplies about 10 million barrel per day to the oil market.
The Centre added that Trump’s present immigration policy on documentation might affect
diaspora remittances; since a huge number of diaspora Nigerians, estimated at 500,000, might be affected.
On climate change, CPPE argued that President Trump’s decision to opt out of the climate change agreement, the Paris Accord, would also have far-reaching consequences for the global oil market; since it signals less commitment to climate change concerns and the acceleration of more investment in fossil fuels by the USA.
“Additionally, the sweeping imposition of trade tariffs on major US trading partners may weaken the global economic growth outlook, dampen global oil demand and depress oil prices.
“However, the upside is that energy prices would drop globally, the price of diesel, PMS Jet fuel, gas This would gladden the hearts of many economic players in the country. The transmission effect would be very fast because of the deregulated regime of the oil and gas sector.
“Heightened prospects of a drop in oil prices would negatively impact government revenue and foreign exchange earnings.
“This has implications for the outlook for revenue, fiscal deficit, government debt and exchange rate. The current budget benchmark of $75 per barrel may not stand in the circumstances,” it stated.
CPPE, therefore, called on the government to commit more to the policy of self-reliance, and less import dependence in critical areas of the economy, especially energy, food, pharmaceuticals and security, arguing that excessive import dependence poses a major risk to economic and social security of the country.
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