“Generally, the global economy will continue to grow in 2022 with increasing vaccinations. That will also increase demands for more energy input. However, 2022 will also see more actions on Net Zero Emission Projects as the Conference of the Parties, COP27, is set to put more commitment and enforcement on Net Zero Emission obligations. Regardless, fossil fuel will continue to drive the global industry in 2022 with prices hedging toward the $100 mark.”
Amieyeofori, who noted that the subsidy decision might have been fueled by political considerations, said: “Nigeria is in an election year with a transition government that would want to keep Aso Rock for the ruling party. A lot of discipline will be required to respect the principles of excess crude account policies. Also, the country continues to rely on external debt which has increasingly taken a toll on our revenue for debt servicing. I do not, therefore, see a ballooning excess crude account in 2022. However, we will see a significant jump in the reserves.
“Well, since we will continue to import, of course, that will significantly impact on the landing cost under a $100/bbl crude price. That will further require a greater subsidy of the product. And given an election year, I see the government playing the ostrich to satisfy the public.
“I would not want to go into an argument with the government because they keep the numbers, however, if we have to jump from 35 million to 60 million to 103 million litres without a significant impact on the economy, then, it is doubtful. This is because of the per capita consumption without equivalent per capita economic growth across the sectors.”
He added: “We should expect most things to be done in the spirit of ‘politicking’. But it is advisable for the government to focus on developing the nation’s economy while providing for the welfare of its citizens.”
Why FG suspended subsidy —-Minister
Recently, the Minister of Finance and National Planning, Zainab Ahmed, had disclosed that the federal government decided to suspend its plan to remove fuel subsidy because of the negative impact it would have on its citizens.
She had stated: “So, even as the government is not immediately removing the fuel subsidy, we have to make sure that what the nation is incurring is efficient, and that it is a real cost that has been consumed by the country.”
In the meantime, based on the 65.7 million litres daily national demand used by the Minister of Finance and N243 subsidy per litre provided IPMAN in this report, the nation’s daily commitment would amount to N16 billion daily.