Crude oil (Brent) price now up to ~ $55. Good and bad news for Nigeria.
Good news: more revenue but more importantly, more dollars in the system (assuming those boys stop blowing up oil pipelines). More dollars means manufacturers can (hopefully) get more dollars to import raw materials to produce more goods. That means prices of items falling. More dollars also means exchange rate falling. Ideally.
Bad news: higher fuel price, although this could be mitigated by exchange rate falling. But unless there is a subsidy (which I’m totally against), fuel prices could rise. But Nigerians are already going through excruciating economic conditions and fuel price increasing means things could get worse.
There are no easy solutions to this unless Nigeria starts refining locally, which will at least take away the exchange rate component of this fuel price madness.
Dangote’s refinery is still at least two years away but that seems to be the only solution in the horizon. For once, every Nigerian is praying for Dangote to succeed.
But no reason Nigeria should be in this situation. None. Zilch. We made ourselves a bad bed and while we try to make something better, we’ve got to lie on this one.