MODIFYING THE FORCES OF THE MARKET BY MODERATING WITH THE FORCES OF MERCY
By Bala Ibrahim
“Nothing can make injustice just but mercy”
In school, and in Economics, we were told about the economic factors affecting the price of, demand for, and availability of a commodity, any commodity. These factors or forces are majorly divided into four, and are called, the four major market forces, namely: Government, International transactions, Speculation and expectation, and Supply and demand. In simple terms, as laymen, we were told, the price of any commodity is determined by the forces of demand and supply. If the demand is high, and supply is low, the price would go up. So said our teachers. The commodity in contention here is oil, petrol in particular, and the theatre of transaction is Nigeria. The supply of crude is high. The price of the crude is also relatively high. But the supply of the product, petrol, is defiantly low, forcing a defiantly high price for petrol. Why?
A simple research would reveal that Nigeria’s oil production amounted to about 1.5 million barrels per day in 2023, an increase when compared to the previous year. Between 1998 and 2022, the figures decreased by approximately 480 thousand barrels per day, and the reasons are numerous. Crude oil sales accounted for the larger chunk of the oil revenue of Nigeria, as N188.15bn was generated from crude oil sales, while gas sales generated N29.69bn. The oil sector provides for 95% of Nigeria’s foreign exchange earnings and 80% of its budgetary revenues. In short, everything about Nigeria is largely dependent on oil, which the country has in abundance. Yet, the same oil is fast becoming a curse, that is inflicting harm on the comfort of the country. God!, what have we done wrong?
On Tuesday, the National oil company, the Nigerian National Petroleum Company Limited, NNPCL, announced a change in the pump price of petrol in Nigeria, increasing it from ₦568 to ₦855, ₦897 per litre, depending on location. Already, black marketers were selling at higher prices. Some as high as N1,200 per litre. The company admitted, to the embarrassment of many, that it was struggling to maintain fuel supplies because of financial difficulties. Financial difficulties at a time the country said it had removed fuel subsidy in order to overcome same financial difficulties? God!, what have we done wrong?
Pursuant to this price increase, everything in the country has been positioned for price review, including the cost of breathing, I thing. According to the NNPCL, foreign exchange illiquidity has been a significant factor influencing the fluctuation in prices of Premium Motor Spirit, popularly called petrol. These factors are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act, PIA. In essence, the company is saying, the fate of the people, as far as the purchase of petrol is concerned, is dependent on the forces of the market. Well, that is pure economics, which is legal. But beyond economics, there is the issue of governance, which has the duty of comparing the performance of different sectors under different conditions, and moderating where necessary, with a view to bringing sanity to the system. And that is moral.
Governments maintain the legal and social framework, provide public goods and services, redistribute income, mitigate externalities, and stabilise the economy. These are the statutory responsibilities of any government, including our own government of Nigeria, which has pledged to do justice to all. Lawyers say, justice is rendered when people receive their due, according to the law, be it God’s law or man’s law. An act of justice is typically an act of the law, and might be an act of vengeance and force. Mercy, on the other hand, means exercising forbearance. An act of mercy is an act of grace and COMPASSION.The emphasis on compassion is mine, with the hope that it would draw the attention of the government.
The same lawyers say, justice can be tampered with mercy. Justice, which by nature involves retribution, can be softened by mercy. This includes, merciful interventions in the market.
Perhaps, it is in an effort to effect this aspect of tampering justice with mercy, and also in readiness to activate the role of the first among the four major market forces, which is Government, that, Vice President Kashim Shettima, summoned the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, and the Group Managing Director of the NNPCL, Mele Kyari to his office yesterday. Also summoned was the National Security Adviser, Mallam Nuhu Ribadu. By virtue of the composition and the strategic importance of the people invited, the expectations would clearly come in line with the move to modify the forces of the market by moderating with the forces of mercy.
May Allah make it so, ameen. Because, nothing can make injustice just but mercy.
MODIFYING THE FORCES OF THE MARKET BY MODERATING WITH THE FORCES OF MERCY