The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, says it is suicidal for Dangote Refinery to sell petrol below its production cost, warning that Nigerians must not to be carried away by false expectations.
Rewane stated this on Channels Television’s Business Morning segment of Sunrise Daily breakfast programme on Tuesday.
The economist said, “Dangote Refinery or any refinery for that matter, apart from government-owned refineries are in business to produce at a profit. Two, they will produce at a point at a price point where their marginal cost equals their marginal revenue and they will not sell below cost if not if they do that consistently, they will go out of business.
“What Dangote Refinery is assuring the country is quality and quantity, but that pricing is not necessarily in the hands of Dangote Refinery but in the hands of the market; as the market determines the price including the global crude price, guaranteed margin and the cost of processing. It’s as simple as that. Nobody goes into business to sell below its cost price if not that is suicide”, said Rewane.
He also said, “I think we should get a better picture here than be carried away by false expectations. Yes, it’s good to know that the petrol is being lifted, it is a milestone from our own refineries, which we had before, but now we have the largest single-train refinery in the world. We have it as a result of the initiative of Alhaji Dangote but now it is business time.”
Rewane also said the August inflation figure which showed a decline was not sustainable, adding, “I think one thing we have to put this out there so that everybody knows this: inflation data happened at a period before the petrol price increase and the data was taken at the time of the protests. So, we saw prices of perishable commodities decline, and we did not feel the impact of the increase in petrol prices.
“It is good news, but we shouldn’t get too excited, because the September data is beginning to point to the fact that more likely than not, we are going to have an increase in the price level so that’s what we’re going to see in September.
“Our forecast and our view is that moderation in inflation is going to be more visible at the end of the year rather than at this time. We had expected it in September, but now it’s more likely to happen in December. It is short-lived because it happened in between protests and petrol price increase.”
Akpabio commends Tinubu’s swift response to Borno flood disaster
President of the Senate, Senator Godswill Akpabio, has praised President Bola Ahmed Tinubu, for his timely intervention in the deadly floods that affected Maiduguri, the capital of Borno State and other states as a result of devastating rainfall that occasioned the over flow from the Alau Dam.
Akpabio gave the commendation in Government House, Maiduguri during the President’s condolence visit to the Shehu of Borno, Abubakar Ibn Umar Garba Al Amin El-Kanemi in Maiduguri.
According to a statement by his Special Adviser, Media and Publicity, Office of the Senate President, Hon Eseme Eyiboh, the Senate President assured the President of the resolve of the National Assembly to collaborate with the Executive to ease pains of affected victims nationwide.
“I regard this as a display of love, compassion and commitment to the safety and welfare of Nigerians. On resumption, the National Assembly will mobilize to support the intervention purse and complement the efforts of the Federal Government, State governments, NNPCL, NEMA, and other interventionist agencies.”
Senator Akpabio also promised to “add verve to the Special Disaster Intervention Fund when established” and expressed gratitude to President Tinubu, Vice President Kashim Shettima, Nigeria Governors’ Forum, NNPCL, NEMA, the Armed Forces and other stakeholders for their swift and strong interventions in addressing the flood disaster.
“The National Assembly is committed to supporting all endeavors of governments at Federal and sub-nationals aimed at renewing the hopes of Nigerians. Most importantly, the President’s announcement to set up a Special Disaster Intervention Fund from FAAC allocations to assist in future unforeseen natural disasters demonstrates unrelenting commitment to good governance and transformative leadership”, he further assured.
He equally commended Governor Babagana Zulum for his proactiveness in handling the disaster and attending to the needs of the victims.
