 Nigerians have been told to expect another hike in the pump price of petrol. This is as a result of the rise of the cost of crude oil coupled with the depreciation of Naira against the United States dollars. Oil marketers explained that the cost of crude oil and the exchange rate of the dollar accounted for over 80% of the cost of PMS. Brent crude, the global benchmark for oil, rose to $94 per barrel on Sunday, the highest figure in the year 2023. Now oil had started the year at about $82 per barrel then dipped to about $70 per barrel in June but traded above $92 per barrel in the past week. Although the federal government and its national petroleum company limited, that's the NNPC limited, had insisted that subsidy on petrol had ended following the derogation of the downstream oil sector, operators insisted on Sunday that the government was implementing a quasi subsidy. Joining us to discuss this is Mokta Mohamed, he is an economist. Thank you so much Mokta for joining us. Mokta, can you hear me? I can hear you clearly. Perfect. Let's go straight to we've lost some time to bad connections. Exactly what do you think marketers mean by quasi subsidy even though the federal government has said subsidy is gone? We're still having to deal with some under or back room payments. Is that what they're talking about? I think what they are saying is that the government may have to do that if they don't want them to increase the pump price of petrol product because the whole beauty of deregulation is market forces determining prices and these prices are not being contrary to Nigeria but international price. So international price for crude oil at when the oil and the PMS was set at once one five hundred and five hundred and eighty in Lagos and six hundred and thirty outside Lagos at that time was eighty dollars per bar and it has it stands nice about ninety four dollars per bar. So ordinarily we should see the increment in the PMS. So what they are saying if you want to continue to maintain this current price then you as a government we need to pay us subsidies in which are from the name of our colleagues. What exactly can a government do right now because whether we like it or not we're in between a rock and a hard place in terms of what the Naira looks like as against the dollar knowing also that this crude is not refined in Nigeria we still have to send it outside refine it pay to import it back into the country and on the side there's still crude that is being stolen within the country and taken outside. What what what does the government what do they have to do to deal with this issue now because I do not know if government wants to run a quasi subsidy on this particular issue. Maksa can you hear me? Sorry Maksa are you there can you hear me? Yes I can hear you. Go ahead. Well I don't know what the government is is going to do at this time now is either they complete the I mean the large deregulation to go ahead or they do what the market are calling beside the real because the only way you can guide against this is if we're doing local refining of the petrol and products as a standard we're not you know local refining of petrol and products so definitely think the market as a right and again like you said it's not just the incrementing for a price that the major challenge with us now is the volatility in the exchange rate to this 800 tomorrow is nine seven something then the next day you're having a 930 if you're not buying at the official market so there's a lot of factors so the only solution for it as a standard if we would have been local refining of our petrol and product and as is as is what made to understand we made to understand today and the small talk about dangute refining I would not even come into strength in sometime in November or December so definitely we still have a lot of issues to tackle so the only thing the government can do now is either you go back to subsidy or your market has to increase the price the pump price of petrol but again looking at it the other way around how many oil marketing companies have been able to import we only had one that did it after that it still remains same of same so NMPC still remain the sole importer of refined petroleum products into the country as it stands today hmm talking about this refineries um adruan glale had spoken about the fact that the by december we would be seeing some of these refineries start working but he then put a caveat saying well don't get too excited that you know the refineries are coming doesn't mean that you know fuel will be sold at a cheaper rate so again the average person the average minded person is saying so why the refineries why refining Nigeria if we're still going to pay exorbitant prices to get PMS and the spoke was in is also being a political um if you last week something last week I I read an interview by former president deletion goba sanjo and he said it would be a miracle if come December the product called refineries starts working remember before night was set to start working in February by the then minister for petroleum and there is not the governorship aspirant in Biasha state so definitely from February we are moving to December now and for me uh we are we are not we are not to show about it now to the other aspect what he was saying about and we've said it before is uh that's why your local refining of petroleum product doesn't mean that the product will come cheap what it just means that the price might be low because of the cost of production you will not be paying for um um see water price maybe uh mass supplies or you are going to be paying taxes you're going to be paying demerage you're going to be paying for every international water you pass through all those charges will go so when you remove those such such um charges from from from production they might bring it down but not necessarily so much because um this key determinant is that even dango telefinery or protocol refineries will still have to buy for in the international price rate which is going to be by dollar then the other aspect that might help bring it down is when you are refining in there you know you don't have to source for dollar to pay so you just look at it maybe you have cash back in and that also could help bring down the price but not drastically i think that's what he meant to say um again with the the artisanal refineries this is the last um question and i'm going to ask you um i remember under the Bahá'í administration former vice president um Yamio Shiba Joe had said that these artisanal refineries were going to also be used more like a backup to help with you know refining uh even though all the refineries would not be up and running at the same time uh do you see anything uh you know moving in that department nothing so um the truth of the matter is that government has no business in being refining refining of my particular particular product as long as that space still remains in the hands of government will continue to have the challenges we have government need to sell this sell of these refineries refineries are no working they are also late and they will need to be sold up to investors and government can use the money to invest in other sector all government can't do a leasing with other and become a shareholder of this refinery that's what i feel all they talk about oh modular refinery or maybe we're going to help them establish a refinery instead of shutting it down i think it's just all all does not make economic sense the only economic sense we need now get give license to let's have more people pure refinery let's see government sell up their share in some of these refineries and then let's begin to get local production of refamping from products that would just be the game changer for Nigeria in terms of those who do business within the confines of Nigeria people who have to commute who have to use fuel again don't forget that this country is powered by PMS whether we like it or not just a few businesses are powered by you know diesel the rest of us deal with PMS how soon can we address this issue will it go away anytime soon will there be a stabilization with again the old benchmark going on the up and up will Nigeria is like i asked for my guess will we be able to breathe anytime soon sorry i don't think you breathe anytime soon if we look at what is going because what we're seeing in the international market is market forces remember Saudi Arabia is cutting their own quarter so that is creating artificial shortage remember the Russian Ukraine crisis is still there that's also affecting production from Russia so definitely that's international politics and as long as that remains there we won't have a breeder the only breeder we'll have is get stable exchange rates if marketers can begin to assess exchange rate at the official price that could help bring down the price uh elitism but they get the the the whole idea to change it needs to make sure you get with a local refining of petroleum product and it's in the outside of that it's just a temporary solution to a permanent problem and that will not bring a solution we need a solution and that solution is encourage local investments and call it foreign investors or local investors into this downstream sector the petroleum sector and also let them begin to build more refineries let not only have dangutere refineries NMPC is a limited liability company they should be able to say we also want to turn around our refineries or we are partnering with this person and this person or this company and this company to make sure refineries come on stream without government spending money so it's it's even not right now that NMPC is a limited liability company that governments we are now saying they are using taxpayer money to turn around for for turn around maintenance of NMPC NMPC is a private company even NMPC can go from Nigeria get to Egypt and get a loan from Nance Bank to put off our to create stability in our exchange rate three billion to loan to CBN that mean they are they could also attract private investment into this refineries these refineries are really what they tell us they should be well Mokta that's the time that we have I want to say thank you Mokta Muhammad is the CEO of finance with Mokta and he's also an economist thank you so much for speaking with us unfortunately we did not have enough time to continue this conversation I'll make up for some of that time thank you for having me thank you very much well that's it on the show tonight we appreciate you for watching don't forget tomorrow we'll be back here still talking politics within and outside Nigeria I am Mary Annaclone go follow us on our YouTube plus TV Africa to follow up on all our previous episodes have a good night