The fact that the price of petrol can drop if the value of the Naira appreciates should not surprise an accountant like President Bola Tinubu. The inverse relationship of the value of the Naira and the price of petrol happens because, petroleum, described as an “international citizen,” is largely traded with the American dollar. You may have observed that the Nigeria National Petroleum Company Limited took pains to convert the price of the first consignment of petrol it bought from Dangote Refinery from Naira to the American dollar, the current store of the value of practically all currencies of the nations of the world.
The Crude Oil Refiners Association of Nigeria recognised this obvious relationship, and suggested that local refiners, like Dangote Refineries, can bring the price of petrol down to N550 if the Central Bank of Nigeria pegs the exchange rate to N1000 to the American dollar. Therefore, the quartet of President Tinubu, Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Heineken Lokpobiri, Minister of State for Petroleum Resources, and Yemi Cardoso, Governor of Central Bank of Nigeria, must find a way to strengthen the Naira. Obviously, an increased inflow of the dollar, that the sale of petroleum should bring to Nigeria, will provide foreign exchange to service Nigeria’s foreign loans, as well as pay for the importation of petroleum products that fuel the transportation system and power Nigeria’s economy.
But one must admit there is.