This subsidy should have been removed years ago.

dappssee:

What do you know about privatization?

Look at the telecoms industry? Isn't it liberalized. I think people that benefit from the rot and corruption of the NNPC will not support selling those refineries. They never function despite all the billions that go into TAM (Turn Around Maintenance). So who is fooling who?
You import one million litres of fuel and tell me you've impoted one and a half million litres so the subsidy on half a million litres goes into private pockets.

For me selling those damned refineries is long overdue and this should pave the way for deregulation.

If you have a better suggestion, say it and give a reason for it. I hate it when people argue without a rationale

Dapsee,
Like some poster said earlier, comparing the oil and gas sector to the telecoms sector is akin to comparing apples and oranges.
The fact that there is a discrepancy between the number of litres imported and the number reported when subsidies are refunded points to a problem with corruption which should be addressed. Doing that would solve the problem at the dishonest importers expense and common sense says that it's the right way to go.
Deregulation at this time when there is economic turmoil will put the bill at the feet of everyday Nigerians who will have to pay more for petrol without any increase in income. Also, the folk that have fought the sale of the refineries will continue to do so whether deregulation takes place or not. The fact that they will make more money from deregulation will not satisfy their greed I assure you.
Tell me which you prefer; to fix the corruption problem and have the dishonest importers get their rightful due or to leave the corruption ridden system in place and put the bill at the feet of the common man. I say the former.
Also, equating the removal of subsidies to creating a morecondusive environment for selling the refineries is faulty logic. I'm willing to bet that whether this deregulation goes ahead or not those refineries will remain exactly the way they are for a mighty long time.

Corruption has become a way of life for Nigerians and its so sad. One way of solving it is by removing the opportunities that make it thrive. There's a lot of corruption at the NNPC as a consequence of their mismanagement of the refineries and the amorphous figures they claim on subsidies.

Now I'm not saying deregulation should be immediate but that the refineries should be privatized before that is done. Naturally the fuel pump price should have dropped considering the price of crude internationally but the fact that we import fuel will mean that the prices will be affected directly by the exchange rate.

If the refineries are managed by private hands, they will function at installed capacity or something close and this will mean availabilty at reduced cost. I dont know why this logic seems so hard to grasp.

Corruption is now a way of living in Nigeria, stopping it is just like trying to stop eating, it is only God that can help.

The simple fact is that Nigeria is not developing compare to other countries.

The person I can blame is the current president Ya'radua (aka baba go slow).

@ Talksmith

Yes I maintain you have a fascist ideology on this subject matter. I knew sooner than later you do want to chip-in the point of the telecoms industry to further strengthen your argument. I need to remind you that MTN have relocated their main office back to South Africa. What made Econet, Vodacom, etc not to thrive in Nigeria? How functional is the working capacity of Nitel today? Please mull over these things and get back to me.

Econet was bought over because it didn't have financial clout. Vodacom's deal was CANCELLED because of allegations of corruption in the process of finalising the deal. Celtel is now called Zain and is making profits in Nigeria. There has been no case of any of them not being able to thrive. MTN's HQ location is not the matter here - it continues to make more from Nigeria than it does in SA, so your point is moot.

Please stop equating apples with guava. They are two different areas of functions. GSM can be regulated easily by the government without need of external forces. Oil has external factors set in place, such as OPEC. Probably you are oblivious to the fact that when subsidy is removed from the Nigeria oil market, it would have also have an impact on the GSM companies. [b]Partly due to the success of the GSM industry in Nigeria is the subsidy on oil (Take it or leave it)! [/b]You are simply seeing this matter from the angle of various independent oil market struggling to own the market, whereas, greediness to make money is inherent with the oil business.

So what if there are external factors for OPEC? Is that a justification for subsidy? Are external factors such as importing from Thailand and Chinese demand not affecting rice prices? Why not subsidize those as well?

I will not 'take it or leave it', because you have exhibited SHOCKING ignorance once again. Diesel prices have been FULLY DEREGULATED for years with NO SUBSIDY, and that is the primary fuel the GSM operators use to power their base stations. So please explain how the subsidy has made them succeed.

Greediness to make money?  MTN was greedy to make money as well, till the MARKET sorted out the issue with Glo's introduction and a crash in SIM prices and tariffs. There will be greed, but the market will sort itself out. Once again, no reason to selectively protect petrol prices alone to the detriment of the wider economy.

You are a jester! Please tell me when last the refineries worked? If you make void my option of ''effective monitoring policies,'' I see your point of good management ability as a child's play. The same refineries Obasanjo spent billions of naira on to make functional throughout his tenure, you now tell me: ''Investors with management ability can come down and rapidly turn them around''! How amazing to see such work in Nigeria! What the current system does, is for the Government to regulate the price, based on the subsidy given. However, loopholes covering oil bunkering have been left un-attended which makes even your so-called 'local oil companies' to make profit from thereby.

The refineries were achieving 80% availability in 2001, and had 70% availability in 2005/2006, easily verifiable from NNPC statistics, before the Chanomi Creek pipeline vandalisation dropped capacity down again. With repairs and expansion, they can achieve 90-95% availability and will meet supply with expansion.

They were working at 70% under government supervision, and will achieve better under private management. Regulating prices through subsidies can never bring in investors. Oil bunkering is not the cause of the problem here - it is an inefficient subsidy system that gets padded with whatever unwanted costs the marketers don't like, with us footing the bill. Remove this loophole and they will be FORCED to become efficient.

On-site generation of power based on what? Answer: Subsidies set in place by the Government. Removing the subsidies only means the cost of operation going up! This is then played out on its consumers. SIMPLE.

Again, display of ignorance. On site power generation is based on fuel gas usage - a by product of the refining process. There is NO SUBSIDY on this, and the refinery pays for fuel gas as part of the oil received for refinement. Since the government insisted refineries paid international crude prices for feedstock a few years back, there is NO SUBSIDY on power generation. Get your facts straight.

Who is responsible for this ''COMPETENT MANAGEMENT" in Nigeria?  PLEASE!

So you would prefer the government's incompetence to private initiative? There will be competent management when private enterprises are allowed to run these facilities. They need to secure financing, justify expenditure to shareholders and achieve returns. They are FORCED to be efficient through the market.

We have been spending money on improving transport, please tell me over the years what has been the outcome to it? Government after government create budget for road maintenance and repairs, yet tomorrow, there will still be road accidents across the nation Nigeria. There is no point there SIR. We are simply creating room for more misappropriation of funds.

Funds are being mis-appropriated on this subsidy and the system still doesn't work. I don't buy the excuse that due to past failure to fix roads, we should continue letting some people feed fat on subsidies. We are not creating room for more misappropriation, we are simply closing ONE channel. There will be no more subsidy 'allocation' to be padded by fraudulent administrators.

[quote[
True beneficiaries of subsidy has been the masses so far. It is just a shame that some greedy beings have exploited the loopholes with the subsidies to enhance their own pecuniary status. And for that, it is the citizenry that must suffer! What a shame on the government!

[/quote]
The masses have not benefited - if proper investment was made in power generation, so much petrol would not be needed to power millions of small generators all over the country. The subsidy is being dispersed sparsely with little benefit. 700 billion can fix power in Nigeria and have a much greater effect than knocking 5 or 10 naira off every litre of petrol you buy.

[quote]
I think I have addressed this issue above. Furthermore, developed nations, use GAS for power supply. So stating that ''power supply has little if anything to with petroleum products production and supply'' is totally WRONG of you. It is just a pity that Nigeria has not utilized in full capacity the potentials with Gas for power supply.

It does have little to do with it - Nigeria generates power with Gas as well, not liquid fuels. We need to invest in utilising our gas capacity, not continuing to subsidise at an unsustainable level, while neglecting crucial infrastructure upgrades.

NO! It would not make sense. If the billions of Naira, Obasanjo spent on improving power supply cannot be accounted for, how logical would subsidies be channeled to achieving that?

Who says the billions cannot be accounted for? Please state what you know and not baseless speculations in newspapers. There are 6 power plants completed only requiring gas supply to start generation. Besides, why should petrol prices be the focus of subsidies except for an emotional feeling that 'this is our oil and it should be cheap'?

I have little or no information to this. I am least qualified to respond to this. Hope you do not mind if I do not TALK about it?

I don't mind talking about it, but we must do it in an informed manner, not from an emotional starting point. Without knowing the quantum of subsidy, what exactly are we crying about? Take the government out of this and let the system work with appropriate supervision, NOT subsidy.

The varied analysis posted for and against this subsidy thing gives one an idea that this surely is not a forum for slowpoke yahoo-yahoo felas.

I see the subsidy [/b]as the monster that's scaring so many. [b]THANK GOD THEY HAVE NOW DECIDED TO REMOVE IT.
Every govt I have known in Nigeria had threatened an harassed us with "we will remove subsidy, we will remove subsidy". Now that they have done it (or are they just planning) lets see what else they will say they are going to remove so that they will do well.

On another note, this deregulation thing, if sincerely implemented, is what we need in this country to stop all this inefficiency we have seen in running of the of govt agencies in the oil sector. I am not an economist but I know that in Nigeria it is cheaper to block the avenue for corruption than to fight it.

@ debosky,
In trying to understand your point, I am of the conviction that semantics seems to be a gray area to your fully comprehending why subsidy removal on the Nigerian Oil market cannot work. I have read your rejoinder, and once more you humor with your IGNORANCE and your passionate attempt to prevaricate from some of the points I have made. I would once again assume the role of a pedagogy in making clear this subject matter to you.

debosky:

Econet was bought over because it didn't have financial clout. Vodacom's deal was CANCELLED because of allegations of corruption in the process of finalising the deal. Celtel is now called Zain and is making profits in Nigeria. There has been no case of any of them not being able to thrive. MTN's HQ location is not the matter here - it continues to make more from Nigeria than it does in SA, so your point is moot.

Kindly explain what happened to Celtel before it became Zain. Epileptic services to its consumers means thriving to you? How many of the GSM consumers enjoy the full services of these independent marketers? There have been numerous cases of consumers losing their money to poor services. Who regulates them? Who are they going to complain to? The NCC? Please do not let us go there! Once more you have chosen to be oblivious to the plight of Nitel which I earlier mentioned in my argument. Deregulation clearly has its advantages as evidenced with the GSM sector, but to think or imagine that the same is applicable to the Oil sector is totally IGNORANT of you. The location of MTN to South Africa matters Mister. When you state that it continues to make more money in Nigeria than it does in South Africa, does that not strike a bell of thinking within you? Moving to a location where operational cost is lower, continue to operate in a market where cheap and easy money can be made due to lacking of proper monitoring.

debosky:
So what if there are external factors for OPEC? Is that a justification for subsidy? Are external factors such as importing from Thailand and Chinese demand not affecting rice prices? Why not subsidize those as well?

You keep concocting irrelevant points to your argument. Rice can be grown locally by any farmer who desires to. What economical benefit does it serve to subsidize it importation from Thailand or China? On the other hand, kindly tell me whether any farmer can grow 'Oil' on its farmland? Your ignorance is truly blissful.

debosky:
I will not 'take it or leave it', because you have exhibited SHOCKING ignorance once again. Diesel prices have been FULLY DEREGULATED for years with NO SUBSIDY, and that is the primary fuel the GSM operators use to power their base stations. So please explain how the subsidy has made them succeed.

Pray tell me, what is the percentage share of DIESEL users in Nigeria to PETROL users? Moreover, when the government increased the price of DIESEL, FUEL and KEROSENE in Nigeria during the Obasanjo regime, did we not all see that call rates and charges was sky-rocketed by GSM operators? Are you once more ignorant to that fact? If you raise the issue of no subsidy on diesel for years, what is market demand for diesel in Nigeria? How many cars run on diesel as compared to petrol? Most diesel users in Nigeria, lie within the industry - manufacturing sector of the economy. It is a total different ball game. Please stop displaying this arrogant ignorance.

debosky:
Greediness to make money?  MTN was greedy to make money as well, till the MARKET sorted out the issue with Glo's introduction and a crash in SIM prices and tariffs. There will be greed, but the market will sort itself out. Once again, no reason to selectively protect petrol prices alone to the detriment of the wider economy.

What exactly is detrimental to the economy when subsidy was in place? The only detrimental factor to it, was that as I have been saying it ever since: illegal bunkering of oil became good business. Is this a problem of the masses? NO! Why inflict the punishment at this point in time of global economic melt-down on the citizenry?

Whereas developed nations are looking for means to cut down costs for manufacturers and producers, so as to encourage consumers to spend more, in order to boost the financial sector; our own Nigerian government are rather adding costs to manufacturers, which would in turn to make consumers to spend more in this hard times of financial depression. And your sole explanation is that the removal of subsidies will help maintain, restore, or even develop infrastructure. I am truly appalled by your insensitivity and poor rationale to see through things.

debosky:
The refineries were achieving 80% availability in 2001, and had 70% availability in 2005/2006, easily verifiable from NNPC statistics, before the Chanomi Creek pipeline vandalisation dropped capacity down again. With repairs and expansion, they can achieve 90-95% availability and will meet supply with expansion.

Where did you get this baseless assumptions from? As at September 2008, NNPC was still saying they are developing 3 New Refineries at a cost of N800 Billion. And a debosky comes here to tell me refineries are achieving a higher percentage availability. When it is no longer news that Nigeria's moribund oil refineries have not been receiving any function whatsoever for YEARS now. There are four oil refineries in Nigeria, tell me which of them is functional? You would rather sit down with useless NNPC statistics which are only used as PR and base your argument on that? I am once more disappointed!

The Kaduna Refinery and Petrochemical Company Limited (KRPC Ltd), the only refinery located in North has not received any Turn Around Maintenance in the last ten years. Towards the end of Obasanjo's regime in 2007, this refinery was sold to a company called Blue Star Ltd which was purportedly owned by Dangote and Femi Otedola. Are this the external investors you lay claim to?

Furthermore, how much is the cost and repairs? Who is going to foot the bill? The poor but yet hard working citizens? Do you know how long it takes to repair this refineries and set them working in place once more? It is so easy for you to refer to the GSM sector, setting up a refinery is not a matter of months. It takes an appreciable amount of time - years to do such. China will tell you better when it comes to this.

debosky:
They were working at 70% under government supervision, and will achieve better under private management. Regulating prices through subsidies can never bring in investors. Oil bunkering is not the cause of the problem here - it is an inefficient subsidy system that gets padded with whatever unwanted costs the marketers don't like, with us footing the bill. Remove this loophole and they will be FORCED to become efficient.

More load of ignorance been spewed by you. Refineries working at 70%, yet we export crude oil and import refined oil based on subsidy, and this private management still have the effrontery to undertake oil bunkering. And you are here talking of becoming efficient with this process? I am really gob-smacked!

debosky:
Again, display of ignorance. On site power generation is based on fuel gas usage - a by product of the refining process. There is NO SUBSIDY on this, and the refinery pays for fuel gas as part of the oil received for refinement. Since the government insisted refineries paid international crude prices for feedstock a few years back, there is NO SUBSIDY on power generation. Get your facts straight.

Can you kindly show me where you got this your ''fact'' from? I am really forced to question the credibility of your claims henceforth seeing that you would rather give me lies from NNPC who has you stated, cannot even stipulate in details, how much subsidy is been undertaken.

debosky:
So you would prefer the government's incompetence to private initiative? There will be competent management when private enterprises are allowed to run these facilities. They need to secure financing, justify expenditure to shareholders and achieve returns. They are FORCED to be efficient through the market.

I have addressed this issue, a couple of times. I do not count it wise to keep repeating myself on this matter. There is nothing as competent management. Competent management is not the key to handling the oil industry.

debosky:
Funds are being mis-appropriated on this subsidy and the system still doesn't work. I don't buy the excuse that due to past failure to fix roads, we should continue letting some people feed fat on subsidies. We are not creating room for more misappropriation, we are simply closing ONE channel. There will be no more subsidy 'allocation' to be padded by fraudulent administrators.

You are closing one channel, and opening several other channels for more misappropriation of funds. What a wonder!

debosky:
It does have little to do with it - Nigeria generates power with Gas as well, not liquid fuels. We need to invest in utilising our gas capacity, not continuing to subsidise at an unsustainable level, while neglecting crucial infrastructure upgrades.

I thought you earlier stated this:

''power supply has little if anything to with petroleum products production and supply''

which is which? Can you please tender a coherent argument for me to deal with?

debosky:
Who says the billions cannot be accounted for? Please state what you know and not baseless speculations in newspapers. There are 6 power plants completed only requiring gas supply to start generation. Besides, why should petrol prices be the focus of subsidies except for an emotional feeling that 'this is our oil and it should be cheap'?

Baseless speculations in Newspapers? Calm down. So in order to prove your point, you would rather nullify the report of the newspapers as baseless? Where did you obtain your facts from? There are no 6 power plants completed to the best of my knowledge. Please stop spreading lies here.

Besides why cannot petrol prices be the focus of subsidies? Are you ignorant that petrol prices drives the economy of Nigeria? You are blessed with ignorance.

debosky:
I don't mind talking about it, but we must do it in an informed manner, not from an emotional starting point. Without knowing the quantum of subsidy, what exactly are we crying about? Take the government out of this and let the system work with appropriate supervision, NOT subsidy.

And who are the system that will make it work with appropriate supervision? Is it not the same Government? Tell me any developed country, that does not have a stake in the oil market? You are preaching for oligopoly right?

I think if well implemented its a good thing for us.
we are just so afraid of change.
i have seen many people complaining about Fashola's work in Lagos

The way people collect this money is not right,they carry product from Lagos to somewhere in Lagos they
will indicate that the product went to maiduguri so that they can get huge money from government.

if government can not run refinery   then private sector will do it.
with time the price will fall.

the telecommunication sector is a good example ,when mtn and vego now zain started Sim card was so high and the tariff was high too.but Glo came in they introduce per seconds billing.the Sim card price crashed.

the same will happen to the oil sector let them allow many people to build refinery
no body will spend millions on refinery and will watch it fail.

God bless Nigeria

TalkSmith:

Kindly explain what happened to Celtel before it became Zain. Epileptic services to its consumers means thriving to you? How many of the GSM consumers enjoy the full services of these independent marketers? There have been numerous cases of consumers losing their money to poor services. Who regulates them? Who are they going to complain to? The NCC? Please do not let us go there! Once more you have chosen to be oblivious to the plight of Nitel which I earlier mentioned in my argument. Deregulation clearly has its advantages as evidenced with the GSM sector, but to think or imagine that the same is applicable to the Oil sector is totally IGNORANT of you. The location of MTN to South Africa matters Mister. When you state that it continues to make more money in Nigeria than it does in South Africa, does that not strike a bell of thinking within you? Moving to a location where operational cost is lower, continue to operate in a market where cheap and easy money can be made due to lacking of proper monitoring.

2 things - Celtel suffered from a lack of funding. Were Glo and MTN not flourishing under the same conditions? MTN moving it's group headquarters is not relevant to this discourse - are they making profits from Nigeria or not? Yes they are. Is their business thriving? Yes it is. Where the HQ is cannot be the determinant of whether deregulation works or not - it does. Whatever reasons are behind the move cannot be easily gleaned, nor are they relevant to this current discourse. Spain's Castellon refinery is owned by BP and managed from London and it works. I find it laughable that the HQ of MTN now becomes the anchor for your opposition to deregulation, as if there would be any MTN without deregulation in the first place. 

You keep concocting irrelevant points to your argument. Rice can be grown locally by any farmer who desires to. What economical benefit does it serve to subsidize it importation from Thailand or China? On the other hand, kindly tell me whether any farmer can grow 'Oil' on its farmland? Your ignorance is truly blissful.

You failed to realise the tongue in cheek analogy - Not only oil is subject to 'external influences' as you mentioned with OPEC. What economic benefit does subsidising petrol bring that subsidising other products cannot bring?

Pray tell me, what is the percentage share of DIESEL users in Nigeria to PETROL users? Moreover, when the government increased the price of DIESEL, FUEL and KEROSENE in Nigeria during the Obasanjo regime, did we not all see that call rates and charges was sky-rocketed by GSM operators? Are you once more ignorant to that fact? If you raise the issue of no subsidy on diesel for years, what is market demand for diesel in Nigeria? How many cars run on diesel as compared to petrol? Most diesel users in Nigeria, lie within the industry - manufacturing sector of the economy. It is a total different ball game. Please stop displaying this arrogant ignorance.

You brought up the issue, saying subsidy is the reason GSM succeeded, which is laughable at best. People need communication facilities, regardless of the cost of petrol so how can subsidy be the reason for success of GSM??

Like you keep pedagogically preaching, stick to a coherent line of argument - You said subsidy is the reason GSM succeeded, I say no - GSM operators need diesel to run their operations not petrol. Comprende?

What exactly is detrimental to the economy when subsidy was in place? The only detrimental factor to it, was that as I have been saying it ever since: illegal bunkering of oil became good business. Is this a problem of the masses? NO! Why inflict the punishment at this point in time of global economic melt-down on the citizenry?

Once again - HOW MUCH SUBSIDY is there on a litre of fuel now to conclude that 'suffering is being inflicted'? There is definitely a detrimental effect - 700 billion can be better used to improve basic infrastructure rather than engaging in nebulous subsidies of private sector inefficiencies. What evidence do you have that bunkering is the only negative effect? Can you quantify the positive impact that 700 billion invested in power gen alone would have in just 2 years?

Whereas developed nations are looking for means to cut down costs for manufacturers and producers, so as to encourage consumers to spend more, in order to boost the financial sector; our own Nigerian government are rather adding costs to manufacturers, which would in turn to make consumers to spend more in this hard times of financial depression. And your sole explanation is that the removal of subsidies will help maintain, restore, or even develop infrastructure. I am truly appalled by your insensitivity and poor rationale to see through things.

Energy subsidies is not the way. Develop power supply. The government is spending 303bn this year on power generation, and that is how to help manufacturers, not keeping subsidy on diesel. As you clearly mentioned, manufacturers use DIESEL which is NOT SUBSIDISED!! My explanation of developing infrastructure is very pertinent - the infrastructure improves people's quality of life, and are not infrastructure unto themselves. Power generation gives you more productive ability instead of making petrol slightly cheaper.

Where did you get this baseless assumptions from? As at September 2008, NNPC was still saying they are developing 3 New Refineries at a cost of N800 Billion. And a debosky comes here to tell me refineries are achieving a higher percentage availability. When it is no longer news that Nigeria's moribund oil refineries have not been receiving any function whatsoever for YEARS now. There are four oil refineries in Nigeria, tell me which of them is functional? You would rather sit down with useless NNPC statistics which are only used as PR and base your argument on that? I am once more disappointed!

NNPC stats show a precipitous drop in refining capacity after the pipeline outage. Should I believe your beer parlour impressions rather than statistics? 

Warri Refinery is working, just two weeks ago, they started producing LPG again. Please deal with stats that you know.

The Kaduna Refinery and Petrochemical Company Limited (KRPC Ltd), the only refinery located in North has not received any Turn Around Maintenance in the last ten years. Towards the end of Obasanjo's regime in 2007, this refinery was sold to a company called Blue Star Ltd which was purportedly owned by Dangote and Femi Otedola. Are this the external investors you lay claim to?

The reason for the hue and cry was that the refinery had just been repaired, before it was hurriedly sold. That process was not open, so the failure of one privatisation scheme does not negate the usefulness of the process as a whole.

Furthermore, how much is the cost and repairs? Who is going to foot the bill? The poor but yet hard working citizens? Do you know how long it takes to repair this refineries and set them working in place once more? It is so easy for you to refer to the GSM sector, setting up a refinery is not a matter of months. It takes an appreciable amount of time - years to do such. China will tell you better when it comes to this.

Refineries cost money to be set up agreed.In Spain, 300m euros increased capacity of a refinery by 20,000 barrels per day. extrapolating, 1.5bn euros can achieve an increase by 100,00 barrels. Not an impossible task.

More load of ignorance been spewed by you. Refineries working at 70%, yet we export crude oil and import refined oil based on subsidy, and this private management still have the effrontery to undertake oil bunkering. And you are here talking of becoming efficient with this process? I am really gob-smacked!

There is no ignorance here - our refineries producing even at 100% ( of current capacity) cannot meet domestic supply - this is why i have said improved efficiency AND expansion. Read and comprehend pedagogue! 

I did not state the refineries are working at 70% right now, I gave a specific time boundary. You asked a question about when last they worked and I provided you information. Did I say they are currently working at that capacity? 
The efficiency I am talking about will come from the investors who will have a commercial orientation - govt can achieve 70%, but private enterprise will achieve better.

Can you kindly show me where you got this your ''fact'' from? I am really forced to question the credibility of your claims henceforth seeing that you would rather give me lies from NNPC who has you stated, cannot even stipulate in details, how much subsidy is been undertaken.

Gladly! I have worked in a refinery and all the ones in Nigeria operate onsite electricity cogeneration facilities for steam and electrical power - take Warri Refinery as an example.  NNPC doesn't manage the subsidy, the PPRA does so subsidy quantification is not an NNPC duty.

I have addressed this issue, a couple of times. I do not count it wise to keep repeating myself on this matter. There is nothing as competent management. Competent management is not the key to handling the oil industry.
You are closing one channel, and opening several other channels for more misappropriation of funds. What a wonder!

Closing one channel but opening another? Maybe, but at least we will run an oil industry capable of sustaining itself without government hand outs. If you cannot comprehend that private entities can manage better than the government, then that is your cross to bear.

I thought you earlier stated this:  which is which? Can you please tender a coherent argument for me to deal with?

Again, the problem is lack of comprehension. Power supply [/b]is not an impediment to [b]product refining (down stream), because refineries operate INDEPENDENT power generation. Overall nationwide power supply is, of course, affected by Gas production as part of exploration and production (upstream) activities. get it now?

Baseless speculations in Newspapers? Calm down. So in order to prove your point, you would rather nullify the report of the newspapers as baseless? Where did you obtain your facts from? There are no 6 power plants completed to the best of my knowledge. Please stop spreading lies here.

I don't have time to keep educating you - search in the political section for my thread on power generation. There is copious evidence of the completion status of Geregu, Omotosho (phase 1), Papalanto, Ibom Power, Afam IV and Alaoji power stations. On second thoughts, read this article to get some more insight

Besides why cannot petrol prices be the focus of subsidies? Are you ignorant that petrol prices drives the economy of Nigeria? You are blessed with ignorance.

Is petrol the ONLY driver? Is this the best way to 'drive the economy'? Your singular thinking doesn't help here- subsidies have failed, other techniques need to be applied. Improve power and other infrastructure and dependence on petrol will lessen, We cannot afford to wait till power is fixed to remove the subsidy, since the subsidy in itself may be a contributing factor mitigating against power supply. 700bn a year can be channeled better to improving basic infrastructure touching people's lives - power, roads, health.

And who are the system that will make it work with appropriate supervision? Is it not the same Government? Tell me any developed country, that does not have a stake in the oil market? You are preaching for oligopoly right?

It s the same people who will effect your 'proper monitoring'  . Government is capable of engaging in a minimal supervisory role, rather than being the dominant player in the market.

What role do developed countries play in their local supply systems? Do they set prices? No one is saying the government should hands off totally - they will still run the PPMC and depots, which are crucial to the distribution system for products. But should they dictate price? NO. Subsidy has not helped, no one knows the level of subsidy or can tell clearly (due to padded costs and corruption). Let us close this avenue once and for all and use these funds to develop critical infrastructure to drive economic growth. Having a stake should NOT be equivalent to subsidy.

Yar-a-dull has exausted all his miserable ideas on how to run the country; hear him " this is a huge fiscal burden we cannot continue to meet" , how about "there is this huge fiscal looting we cannot continue to practice". tell me which is Nigeria's economic destroyer; subsidy or looting. all those guys that prepared that plan should just resign, they are the problem in this country not subsidy. China is subsidizing rice to every chinese man while jacking up the price of export, talk of govts that love their citizens. in nigeria it is the reverse. well not to worry what goes around comes around, we shall reap what we sow.

Once more you chose to prevaricate on my points made, and would rather dance to the tune of what suites your taste. For the sake of the commitment that I have stated to be your pedagogy, I will once more retort with my verbiage.

debosky:

2 things - Celtel suffered from a lack of funding. Were Glo and MTN not flourishing under the same conditions? MTN moving it's group headquarters is not relevant to this discourse - are they making profits from Nigeria or not? Yes they are. Is their business thriving? Yes it is. Where the HQ is cannot be the determinant of whether deregulation works or not - it does. Whatever reasons are behind the move cannot be easily gleaned, nor are they relevant to this current discourse. Spain's Castellon refinery is owned by BP and managed from London and it works. I find it laughable that the HQ of MTN now becomes the anchor for your opposition to deregulation, as if there would be any MTN without deregulation in the first place. 

For the sake of clarity to readers on our subject of discourse and debate, I DID NOT bring up the discourse of GSM sector to the topic. You did! That I made mention of MTN relocating to South Africa was to further show that with the harsh economic condition in Nigeria, where the subsidy market was not in place by the Government, it gave opportunity for the move. You are absolutely failing to see my argument on that, but would rather and readily refer to the case of Spain's Castellon refinery. The way you juggle your analogies beggars for serious thinking. You are rather so quick to circumvent my point and post irrelevant analogies and then label them as: 'tongue-in-cheek analogy' when they are found and proved to be illogical. Or how do I explain your drawing parallels of a developed country with a less developed country? These are countries that have one form of subsidy in place or the other, and yet you are so quick to make references to them. How awesome!

debosky:
You failed to realise the tongue in cheek analogy - Not only oil is subject to 'external influences' as you mentioned with OPEC. What economic benefit does subsidising petrol bring that subsidising other products cannot bring?
You brought up the issue, saying subsidy is the reason GSM succeeded, which is laughable at best. People need communication facilities, regardless of the cost of petrol so how can subsidy be the reason for success of GSM??

So subsidizing the importation of Rice from Thailand and China would generate the much needed productivity for the economy (In response to your first question above)? How laughable In response to your second question, I NEVER said it was the sole reason for its success. Please get me clearly. It is one of the reasons for its success in Nigeria, given how fuel is fundamental to a successful economy operation in present day Nigeria, how logical would it be to now exclude that fact from my argument?

debosky:
Like you keep pedagogically preaching, stick to a coherent line of argument - You said subsidy is the reason GSM succeeded, I say no - GSM operators need diesel to run their operations not petrol. Comprende?

Tu ne comprehend pas! Now you are mixing my argument upside down! Anyone reading your inputs here would assume I said: There is subsidy in the GSM industry. When my attributes are that; subsidy in the oil market creates room for the GSM industry to thrive. It is different from: ''Subsidy is the reason GSM succeeded'' as you stipulated above. See why I undertook the responsibility to be your pedagogy?

debosky:
Once again - HOW MUCH SUBSIDY is there on a litre of fuel now to conclude that 'suffering is being inflicted'? There is definitely a detrimental effect - 700 billion can be better used to improve basic infrastructure rather than engaging in nebulous subsidies of private sector inefficiencies. What evidence do you have that bunkering is the only negative effect? Can you quantify the positive impact that 700 billion invested in power gen alone would have in just 2 years?

Improving infrastructure? This is ludicrous! Kindly tell me what infrastructure has been improved from the proceeds of oil revenue, vis-a-vis that the funds from removed from subsidy will now handle it. I think you are just arguing for argument sake.

debosky:
Energy subsidies is not the way. Develop power supply. The government is spending 303bn this year on power generation, and that is how to help manufacturers, not keeping subsidy on diesel. As you clearly mentioned, manufacturers use DIESEL which is NOT SUBSIDISED!! My explanation of developing infrastructure is very pertinent - the infrastructure improves people's quality of life, and are not infrastructure unto themselves. Power generation gives you more productive ability instead of making petrol slightly cheaper.

I agree with the fact that power generation creates room for productive potentials. But your point on diverging the subsidies to that effect is what I find nauseating to human reasoning. What cushion effect has all the funds in the past done to improve power generation? If you can clearly explain that, I will be forced to drop out of this argument.

And again, what is not just of recent that subsidy on diesel was removed? Power generation in Nigeria has its worst in Nigeria. Industries are moving out of Nigeria to neighboring countries. Are you oblivious to that fact as well?

debosky:
NNPC stats show a precipitous drop in refining capacity after the pipeline outage. Should I believe your beer parlour impressions rather than statistics? 

Beer parlor impressions? I speak based on facts. NNPC in itself would never be critical enough to give a balanced and fair stats which the ''ignorant'' would feed on and label it as fact.

debosky:
Warri Refinery is working, just two weeks ago, they started producing LPG again. Please deal with stats that you know.

You are so hilarious! You at one time label facts from newspapers to be baseless and here you embed the weblink of a newspaper to support your argument! How truly amazing.

debosky:
The reason for the hue and cry was that the refinery had just been repaired, before it was hurriedly sold. That process was not open, so the failure of one privatisation scheme does not negate the usefulness of the process as a whole.

It still does not add any weight to your point. My point has been made. If you fail to see it, I cannot help you further.

debosky:
Refineries cost money to be set up agreed.In Spain, 300m euros increased capacity of a refinery by 20,000 barrels per day. extrapolating, 1.5bn euros can achieve an increase by 100,00 barrels. Not an impossible task.
There is no ignorance here - our refineries producing even at 100% ( of current capacity) cannot meet domestic supply - this is why i have said improved efficiency AND expansion. Read and comprehend pedagogue! 

Calm down once more. I know my responsibility and I will gladly fulfill it. Once again, further ignorance and more hogwash been spewed forth by you. Improved efficiency from where? Our ''external investors''? If as you stated, our local refineries cannot meet with domestic supply currently, how plausible would it be that improved efficiency and expansion would solve that? Is that part of a 'competent management' system that subsidy removal would ensure? Do you know how long it takes to repair each of the four refineries? Mister, can you comprehend yourself?

debosky:
I did not state the refineries are working at 70% right now, I gave a specific time boundary. You asked a question about when last they worked and I provided you information. Did I say they are currently working at that capacity? 
The efficiency I am talking about will come from the investors who will have a commercial orientation - govt can achieve 70%, but private enterprise will achieve better.

Your circumlocutory tactics will not help you. You gave a time range as to when the refineries were working with its capacity, I questioned the veracity of such a claim when evidently, our refineries are in a dilapidated state. Here you are, stating that investors with commercial orientation will achieve much more than that. Who is going to fund the repair of our current refineries? Would it not have a spiral effect of increase on the citizenry? These are pertinent questions you skip, and you then begin to draw analogies with the GSM sector.

According to experts on this matter, it will take a minimum of five years to develop new refineries. It entails a lot of logistics such as geographical and soil location, importing materials that will be favorable to the Nigerian condition. Who will fund all these bills?

debosky:
Gladly! I have worked in a refinery and all the ones in Nigeria operate onsite electricity cogeneration facilities for steam and electrical power - take Warri Refinery as an example.  NNPC doesn't manage the subsidy, the PPRA does so subsidy quantification is not an NNPC duty.

At least I agree with you on this point made here.

debosky:
Closing one channel but opening another? Maybe, but at least we will run an oil industry capable of sustaining itself without government hand outs. If you cannot comprehend that private entities can manage better than the government, then that is your cross to bear.

You are still wrong here. I would not belabor myself to repeat it all over again. This however remains your cross to carry.

I wish to further on take other points of yours and address them, unfortunately, I have to round up my tasks for the day. Probably later in the evening, I might still TALK further on. I am seriously pressed for time right.

Nice engaging you.

TalkSmith:

I wish to further on take other points of yours and address them, unfortunately, I have to round up my tasks for the day. Probably later in the evening, I might still TALK further on. I am seriously pressed for time right. 

And you call yourself the "Viper who instigated Grammar invention"??
U need 6 years of intensive tutoring to come near that title if you keep assuming the role of a "pedagogy" instead of a "pedagog"

Not trying to be pedantic. . . . .just belabouring the obvious.

The Viper Who Instigated Grammar Invention!!! @TalkSmiTH

VS

The man who invented Grammar @ Debosky!

Otipopopo!! See DraMas!!!!!!!!!!!!!

I don Laugh Tire for here!        

This government is purely anti-masses. Barely two months after the five naira reduction in petroleum price. their next move is to remove the subsidy on the product so that the masses would no longer survive. The government should be expect a prolonged strike very soon.

TalkSmith:

Once more you chose to prevaricate on my points made, and would rather dance to the tune of what suites your taste. For the sake of the commitment that I have stated to be your pedagogy, I will once more retort with my verbiage.  
For the sake of clarity to readers on our subject of discourse and debate, I DID NOT bring up the discourse of GSM sector to the topic. You did! T[b]hat I made mention of MTN relocating to South Africa was to further show that with the harsh economic condition in Nigeria, where the subsidy market was not in place by the Government, it gave opportunity for the move.[/b] You are absolutely failing to see my argument on that, but would rather and readily refer to the case of Spain's Castellon refinery. The way you juggle your analogies beggars for serious thinking. You are rather so quick to circumvent my point and post irrelevant analogies and then label them as: 'tongue-in-cheek analogy' when they are found and proved to be illogical. Or how do I explain your drawing parallels of a developed country with a less developed country? These are countries that have one form of subsidy in place or the other, and yet you are so quick to make references to them.   How awesome!

Can you tell me what subsidies there are on refined petroleum products in the developed countries mentioned?

My analogy is not irrelevant, it may be difficult for you to comprehend, so please say so if that is the case and I will downgrade to a simpler version.  Last word on the analogy - external conditions are not a sufficient reason to negate any comparison between GSM and petroleum products supply. Existence of external conditions cannot nullify the fact that competitive enterprise can achieve a lot more than government subsidy.

Yes economic conditions are harsh, no one is contesting that. That is a moot point overall. But to point to that as the reason why unsustainable subsidies should be maintained is laughable.

Please explain the emboldened - MTN voluntarily moved it's HQ to Nigeria and moved it again - so what is this 'subsidy market thing'. Be clear for once - is the subsidy the cause of MTN's move?

So subsidizing the importation of Rice from Thailand and China would generate the much needed productivity for the economy (In response to your first question above)? How laughable In response to your second question, I NEVER said it was the sole reason for its success. Please get me clearly. It is one of the reasons for its success in Nigeria, given how fuel is fundamental to a successful economy operation in present day Nigeria, how logical would it be to now exclude that fact from my argument?

How much productivity has your subsidy brought? Answer that first and then we can make a comparison with rice subsidies. A hungry man is a productive man in case you don't know.   (PS that WAS tongue in cheek too)

Tu ne comprehend pas! Now you are mixing my argument upside down! Anyone reading your inputs here would assume I said: There is subsidy in the GSM industry. When my attributes are that; subsidy in the oil market creates room for the GSM industry to thrive. It is different from: ''Subsidy is the reason GSM succeeded'' as you stipulated above. See why I undertook the responsibility to be your pedagogy?

You have provided absolutely nothing to show how the subsidy in the oil market creates room for the GSM industry to survive, except a vague reference to moving HQs. HOW does the subsidy 'create room' for GSM to succeed?
You are the one engaging in semantics here - what is the difference between 'enabling' and 'creating room'? Is 'creating room' not a form of enabling?  

Improving infrastructure? This is ludicrous! Kindly tell me what infrastructure has been improved from the proceeds of oil revenue, vis-a-vis that the funds from removed from subsidy will now handle it. I think you are just arguing for argument sake.

I don't regard it as ludicrous. Let us focus on the current realities - the power sector requires 303bn this year for the integrated power project to be completed. Taking off HALF the 700bn subsidy will close this funding gap. Whether or not you believe it will happen is your prerogative. I believe the subsidy system is NOT working, and the money can and will be better used to repair infrastructure.

I agree with the fact that power generation creates room for productive potentials. But your point on diverging the subsidies to that effect is what I find nauseating to human reasoning. What cushion effect has all the funds in the past done to improve power generation? [/b]If you can clearly explain that, I will be forced to drop out of this argument.

In essence you are saying 'it has not worked in the past, so no effort should be made now'. No one is saying things have worked ideally in the past - the fact remains that we need to direct our scarce resources (during a period of dropping oil prices) and make OPTIMAL use of that to benefit the populace. [b]The fact that previous funds did not make the desired impact does not negate the need for a focused and concerted attempt to remedy those mistakes.

I have copious information on how the NIPP has provided ample ground for take off of the power sector, only if the necessary political will to act and focus to complete the outstanding projects is available. It is not hopeless, past failures notwithstanding.

And again, what is not just of recent that subsidy on diesel was removed? Power generation in Nigeria has its worst in Nigeria. Industries are moving out of Nigeria to neighboring countries. Are you oblivious to that fact as well?
Beer parlor impressions? I speak based on facts. NNPC in itself would never be critical enough to give a balanced and fair stats which the ''ignorant'' would feed on and label it as fact.

What facts do you have on the state of refineries in Nigeria? [/b]Please provide them, and I don't want 'everybody knows' (unless your name is everybody  ).

Subsidies on diesel have been removed since 2002/2003, so I don't know what your definition of 'recently' is. Industries are moving out due to poor power supply - why not channel scarce funds into POWER GENERATION rather than keep a subsidy that doesn't even benefit the industries since their costs are already deregulated?   

You are so hilarious! You at one time label facts from newspapers to be baseless and here you embed the weblink of a newspaper to support your argument! How truly amazing.

I didn't label newspaper facts as baseless, but your lack of comprehension shows itself again. I said 'baseless speculations' [b]IN newspapers. Again, please note the difference in words. The MEDIUM wasn't condemned, simply inaccurate content sometimes generated by sensationalists.

Calm down once more. I know my responsibility and I will gladly fulfill it. Once again, further ignorance and more hogwash been spewed forth by you. Improved efficiency from where? Our ''external investors''? If as you stated, our local refineries cannot meet with domestic supply currently, how plausible would it be that improved efficiency[b] and expansion [/b]would solve that? Is that part of a 'competent management' system that subsidy removal would ensure? Do you know how long it takes to repair each of the four refineries? Mister, can you comprehend yourself?

Very plausible - refineries older than ours have been improved, repaired and expanded. A refinery achieving 70% capacity 3 years ago will not require eternity to achieve 95% (with stable crude supply of course). Again EXPANSION can be done to double or even triple refinery output - this has happened in many plants around the world and can be replicated here. The time duration is not the key here. Our refineries are not producing enough as it is, yet we have products. As long as the market is optimally geared to meeting demand, the source of refined products is secondary.

Competitive, commercial oriented management of refineries coupled with the entrepreneurial drive of the private sector will lead to an effective petroleum products distribution system. You may not regard it as plausible, but it is.

Your circumlocutory tactics will not help you. You gave a time range as to when the refineries were working with its capacity, I questioned the veracity of such a claim when evidently, our refineries are in a dilapidated state. Here you are, stating that investors with commercial orientation will achieve much more than that. Who is going to fund the repair of our current refineries? Would it not have a spiral effect of increase on the citizenry? These are pertinent questions you skip, and you then begin to draw analogies with the GSM sector.

Where is the evidence?

I did not skip those issues - The refinery repairs will be funded by investors - either from banks or equity or with other sources as they deem fit. There is no reason why simply repairing refineries will cost the consumer more - IT IS A BUSINESS DECISION. As a supplier, is it cheaper for me to import fuel or produce locally? On that basis, a commercial decision will be made. Projects have pay-back times, no one will levy consumers specifically for improving supply. I do not have the cost-benefit analysis, and that will be up to the investor to decide. In any case, with a multiplicity of investors or major market players, there will be competition and efficiency will inevitably be introduced.

According to experts on this matter, it will take a minimum of five years to develop new refineries. It entails a lot of logistics such as geographical and soil location, importing materials that will be favorable to the Nigerian condition. Who will fund all these bills?

Is local refining your problem or adequate supply of products? Please don't muddle up issues - if you want to debate the pros and cons of local refining vs importation then lets do it separately.

We don't need to build new refineries if the existing ones can be expanded. The government, being an inefficient allocator of resources would rather build new ones rather than expand. Leave it to the private sector to figure it out. No one will ask you 'come and pay 10 naira extra because I want to build a refinery' if the other guy down the road is selling the same product cheaper. The bottom line is, instead of leaving it down to the whims of government, let us allow an efficient system to evolve. Regardless of the time frame required to build a refinery, such information does not support subsidy.

Please come back when you can

Na wa o. The battle of intelligence between Talksmith and Debosky is too much. I am enjoying this thread o. I believe some foreign investors who are on Nairaland [ They are registered Nairaland Members who have plans for Nigeria ] are also following the thread. One smart American Fat Cat in New York might be following this thread on his sony vaio laptop. What Seun has started, let no man put asunder.

As for me, I don't care whether the Federal Government removes the subsidy on petrol or not. All I want to see is that Nigeria starts developing quickly. Nigeria needs to develop in a jiffy. If the removal of the subsidy will hasten the growth of the economy, so be it. If this current action will make more Nigerians poorer, then I won't support it. Nigeria is lagging behind and I don't like it. Anyway, I hope Yar'Adua will pump the money saved into massive education for the many illiterates that dot the landscape of the country. Illiteracy is a big impediment to Nigeria's economic growth. Cheers.

TalkSmith:

Would you proffer your counter-argument to my statement? I am subject to learning anything new on this matter.

I doubt you are capable of learning. To proclaim that subsidies should be maintained in an open-market system is baloney.

In order to have an efficient market, you need to remove subsidies. That's not an original claim but a reality that is known to any educated person

And could you please prove or state how smugglers will still not pilfer or arbitrage oil even if subsidies are removed?

It's not the oil that is being arbitraged but the refined products. With a subsidy, prices are kept artificially low relative to neighbouring countries. Remove the subsidy and the price difference that incentivises smuggling activity largely vanishes.

Subsidies are symptomatic of dysfunctional societies? I guess the US and UK would be reasoning along your point right now.

Precisely, measures that are taken in extra-ordinary circumstances to deal with dysfunction in the economy are what Nigeria implements as a normal state of affairs. In a functional society, subsidies are uncommon, it is a symptom of dysfunction.

it is now a common phenomenon in nigeria to use petroleum pricing as the basis of adjustment of everything and not cocoa nor cassava pricing.Well i pray the oil even dry up so that we can shift our focus to something else

kai! so we get zees kin economists for NL? Seun should be mighty proud!!!!!  I'm really enjoying the debate, but not 2 sure about the name calling. PLEEEEEZ, Debosky, talksmith & 4plays why not keep it strictly intellectual, eh? remember people, probably not just NLders are being educated here.

debosky:

Can you tell me what subsidies there are on refined petroleum products in the developed countries mentioned?

In the UK alone, there has been fuel subsidy within their aviation industry. Please read it here. Furthermore, since the early 90's developed countries have been engaged in one form of subsidy or the other. Here is a further link to teach you some lessons this evening.

debosky:
My analogy is not irrelevant, it may be difficult for you to comprehend, so please say so if that is the case and I will downgrade to a simpler version.  Last word on the analogy - external conditions are not a sufficient reason to negate any comparison between GSM and petroleum products supply. Existence of external conditions cannot nullify the fact that competitive enterprise can achieve a lot more than government subsidy.

I still maintain your analogy is highly irrelevant. Your last statement is very debatable. For a competitive enterprise to ensue, all conditions needed for an effective have to be met. It will be very myopic of you to hold to the view that external conditions cannot nullify competitive enterprise. Not in a country like Nigeria, where the government have a stake in the enterprise. Moreover, as I stipulated earlier, equating apples with guava is not a sensible thing.

External conditions have to be properly incorporated and met if a competitive enterprise is going to emanate. It is just the same as a simple laboratory test to be undertaken - you have to meet with the external conditions which includes atmospheric temperature and pressure in order to have a good results with your experiment. I am not of a science orientation so to speak, but I know these things. From your writings, I can deduce you are one.

debosky:
Yes economic conditions are harsh, no one is contesting that. That is a moot point overall. But to point to that as the reason why unsustainable subsidies should be maintained is laughable.

I love two of your phrases here: ''economic conditions are harsh'' and ''unsustainable subsidies.'' My question to you then, what is a 'sustainable subsidy'? My understanding of sustainability makes me to know that it covers economic, as well as the social and environmental areas of it. Does the subsidy currently in place by the Nigerian government ensure that? NO! Would subsidy removal and deregulation ensure sustainability within the Nigerian context? NO again! So what is the way out? Address either the unsustainable subsidy or the deregulation. Which is more easier to undertake and implement? In my opinion, it is the SUBSIDY. Why? It suits better our environment and development.

debosky:
Please explain the emboldened - MTN voluntarily moved it's HQ to Nigeria and moved it again - so what is this 'subsidy market thing'. Be clear for once - is the subsidy the cause of MTN's move?

My goodness! For how long would I continue to annotate this point to you? I have used the analogy you stated to explain it to you, you still failed to comprehend it. I have previously to that, explained it to you in A-B-C, yet you still failed to comprehend. OK, here it is one more time: NO, subsidy is not the SOLE reason for the MTN move. As I earlier vibrated, you have a problem with semantics. In argumentative writing-discourse on a forum, it is pertinent to know the weakness of your proponent. Yours, happens to be semantics and lack of comprehension appropriately.

debosky:
How much productivity has your subsidy brought? Answer that first and then we can make a comparison with rice subsidies. A hungry man is a productive man in case you don't know.   (PS that WAS tongue in cheek too)

[s]In responding to your question, I would ask why is subsidy seen as undesirable? Because:
[list]
[li]It entails a high fiscal cost with dire consequences somewhere else in a budget[/li]
[li]It leads to over-consumption, bunkering, corruption and various other wrongs[/li][/list] If my above postulations are right, then it is stereotypical to assume there are no benefits associated with subsidies when all of the above measures can be easily mitigated. A cost-denefit analysis needs to be undertaken for the Nigerian market though. Are the mechanisms in place for such to be undertaken in Nigeria? YES! Unfortunately, the government and debosky believes deregulation is the best means out so cheaply. So maybe, you might be right truly.[/s](Oh! I just saw the tongue in cheek, so I am canceling my input).

debosky:
You have provided absolutely nothing to show how the subsidy in the oil market creates room for the GSM industry to survive, except a vague reference to moving HQs. HOW does the subsidy 'create room' for GSM to succeed?
You are the one engaging in semantics here - what is the difference between 'enabling' and 'creating room'? Is 'creating room' not a form of enabling?  

And you my learned friend, has provided absolutely no information show how deregulation would work in a market environment such as Nigeria except to make reference to the GSM sector. How knowledgeable is that?!

debosky:
I don't regard it as ludicrous. Let us focus on the current realities - the power sector requires 303bn this year for the integrated power project to be completed. Taking off HALF the 700bn subsidy will close this funding gap. Whether or not you believe it will happen is your prerogative. I believe the subsidy system is NOT working, and the money can and will be better used to repair infrastructure.

Now you are beginning to sound like a scratched CD. Repair infrastructure? I have asked you what infrastructure has been repaired from the Oil revenues over the years? Why is it pertinent that ''HALF'' of the subsidy would now be adequately used to address this infrastructural repair? You my learned friend have failed to address this point over and over again!

debosky:
In essence you are saying 'it has not worked in the past, so no effort should be made now'. No one is saying things have worked ideally in the past - the fact remains that we need to direct our scarce resources (during a period of dropping oil prices) and make OPTIMAL use of that to benefit the populace. The fact that previous funds did not make the desired impact does not negate the need for a focused and concerted attempt to remedy those mistakes.

Now I get where your main thrust lies. Due to dropping oil prices, it is unwise for the government to continue to dabble into subsidy. Instead, let its citizenry, ''external investors'' bear the brunt of dropping oil prices, by having to pay more and the government smiles to the bank with the proceeds thereof.

Listen, the fact that previous desired impacts of funds have not made any effects on its citizenry, is the more need to reject this deregulation of the oil sector. History has taught us over time, we would be subject to our own foolishness if this deregulation is accepted, when needed external conditions that should be addressed have not been undertaken.

debosky:
I have copious information on how the NIPP has provided ample ground for take off of the power sector, only if the necessary political will to act and focus to complete the outstanding projects is available. It is not hopeless, past failures notwithstanding.
[b]What facts do you have on the state of refineries in Nigeria? [/b]Please provide them, and I don't want 'everybody knows' (unless your name is everybody  ).

Now, this is where I make your learning, interactive. Simply do an online search on working conditions of Nigeria's oil refineries, come back and tell me what your findings where. I do not want you to be a lazy student.

debosky:
Subsidies on diesel have been removed since 2002/2003, so I don't know what your definition of 'recently' is. Industries are moving out due to poor power supply - why not channel scarce funds into POWER GENERATION rather than keep a subsidy that doesn't even benefit the industries since their costs are already deregulated?   

I love your arguments. Very weak indeed.  

Do you know how much has been saved from removal of diesel subsidy in 2002/2003 till December 2008? Answer: N1.5 trillion according to the Minister of State for Energy (Petroleum) Mr. Odein Ajumogobia. Can you kindly explain to me, why this ''saved'' amount has not been channeled to making the manufacturing industry thrive since most industries are powered on diesel? On the contrary, PPMC cartels, politicians have been responsible for the soaring price of diesel in Nigeria. Is this not a worthy example for all to see that deregulation of the oil industry in Nigeria will NEVER work. What stimulus package has been undertaken from the subsidy removal, which has added economic input to the manufacturing sector in Nigeria?

Rather, industries are moving out of Nigeria which you have as well alluded to.

debosky:
I didn't label newspaper facts as baseless, but your lack of comprehension shows itself again. I said 'baseless speculations' IN newspapers. Again, please note the difference in words. The MEDIUM wasn't condemned, simply inaccurate content sometimes generated by sensationalists.

This guy truly humors me. Who made you the best rationale mind to decipher 'simply inaccurate content generated by sensationalist IN newspapers'? When you need points to support your argument, you run to newspapers, when newspapers give points against your argument, you refer to them as: 'baseless speculations IN newspapers.' And you have the temerity to question my comprehension? I am seriously laughing here mon ami.

debosky:
Very plausible - refineries older than ours have been improved, repaired and expanded. A refinery achieving 70% capacity 3 years ago will not require eternity to achieve 95% (with stable crude supply of course). Again EXPANSION can be done to double or even triple refinery output - this has happened in many plants around the world and can be replicated here. The time duration is not the key here. Our refineries are not producing enough as it is, yet we have products. As long as the market is optimally geared to meeting demand, the source of refined products is secondary.

Semantics once more! Is 'expansion' not a form of new development to the already established refineries? Are they mutually exclusive? Time duration is a fundamental key here. It takes times to have a truly functional refinery. Is that possible within this year? Next year? NO! Please rethink what you are typing next time. Adding hardship upon hardship.

debosky:
Competitive, commercial oriented management of refineries coupled with the entrepreneurial drive of the private sector will lead to an effective petroleum products distribution system. You may not regard it as plausible, but it is.
Where is the evidence?

Another of your incoherent argument. First it was 'competent management' now it is competitive, commercial oriented management. Please stick with one. I do not regard it in anyway as plausible. This is my own conclusion.

Obviously, we cannot change one another's view on this subject matter.

debosky:
I did not skip those issues - The refinery repairs will be funded by investors - either from banks or equity or with other sources as they deem fit. There is no reason why simply repairing refineries will cost the consumer more - IT IS A BUSINESS DECISION. As a supplier, is it cheaper for me to import fuel or produce locally? On that basis, a commercial decision will be made. Projects have pay-back times, no one will levy consumers specifically for improving supply. I do not have the cost-benefit analysis, and that will be up to the investor to decide. In any case, with a multiplicity of investors or major market players, there will be competition and efficiency will inevitably be introduced.
Is local refining your problem or adequate supply of products? Please don't muddle up issues - if you want to debate the pros and cons of local refining vs importation then lets do it separately.

I agree with you here. So no further counter-argument on this.

debosky:
We don't need to build new refineries if the existing ones can be expanded. The government, being an inefficient allocator of resources would rather build new ones rather than expand. Leave it to the private sector to figure it out. No one will ask you 'come and pay 10 naira extra because I want to build a refinery' if the other guy down the road is selling the same product cheaper. The bottom line is, instead of leaving it down to the whims of government, let us allow an efficient system to evolve. Regardless of the time frame required to build a refinery, such information does not support subsidy.

Let me add my rejoinder here that, deregulation makes room for oligopoly. An oligopolistic market cannot work within the Nigerian Petroleum industry. It could have worked with the GSM sector, BUT not with the Petroleum sector.

As evidenced with the deregulation of diesel, a cabal of hungry of politicians, power and money shakers would sit on the market and ensure it suits their market taste. Deregulation would only make room for the dysfunctional society to get more worse in a country like Nigeria. These are my submissions. Take it or leave it once more!

debosky:
Please come back when you can

I came back after reading this input of yours. I am not sure whether I would want to continue on this matter except I see further area of discourse which are new to the subject matter already argued in your rejoinder. Which would therefore, enjoin me to once again assume the role of a pedagogy.

Nice bantering and discussing with you.

who has the energy to read all this long long GS 101 project?

~Sauron~:

And you call yourself the "Viper who instigated Grammar invention"??
U need 6 years of intensive tutoring to come near that title.

Not trying to be pedantic. . . . .just belabouring the obvious.

You again?!

If not that I am a ManU fan, and I have come across your excellent minded analysis on the sports section, I do have. . . . .

Mai Suya:

kai! so we get zees kin economists for NL? Seun should be mighty proud!!!!!  I'm really enjoying the debate, but not 2 sure about the name calling. PLEEEEEZ, Debosky, talksmith & 4plays why not keep it strictly intellectual, eh? remember people, probably not just NLders are being educated here.

I do not think I have called anyone names here. Maybe referring to debosky as ''ignorant'' at times though. But all that is part of not making the discussion boring.

I do agree, he is very intelligent.

TalkSmith:

You again?!

If not that I am a ManU fan, and I have come across your excellent minded analysis on the sports section, I do have. . . . .

Excellent minded analysis on Sports??

I am not interested in this debate.

However, it is important to raise a point.

What is the correlation between petrol prices and inflation in Naija?

Also what percentage of the Govt savings on lifting the subsidy will be carted away to Swiss accounts?

Ibime:

What is the correlation between petrol prices and inflation in Naija?

If petrol forms a huge part of our consumption, which it does, then any major rise in fuel prices will spark inflation.

4 Play:

If petrol forms a huge part of our consumption, which it does, then any major rise in fuel prices will spark inflation.

Of course I only asked cos I remember the inflation during the 1990's when petrol prices jumped.

Now the second question:

What percentage of the Govt savings on lifting the subsidy will be carted away to Swiss accounts?

Ibime:

Of course I only asked cos I remember the inflation during the 1990's when petrol prices jumped.

Now the second question:

What percentage of the Govt savings on lifting the subsidy will be carted away to Swiss accounts?

Less than the amount easily carted away through the subsidy system.

Besides, Swiss banks are probably going to lose their culture of ''discreteness''. . . . . . . our looters should be looking to the Middle-East to hide their wealth.

THANKS ALL U GUYS!!!!


Recently Jamaica had a 10% devaluation to the $US and I was really sad
I was sad because I was under the impression that the Naira was still at 120 to 1 $US
and that our Jamaican currency was inching towards a rate similar to the Naira.

Praise be to God!!!!!! I am elated that the Naira is 180 to 1 $US while
The Jamaican currency is Revaluing.

Well, I suppose its because all the Intellectuals and Geniuses are in Nigeria why they have a continued slide in their currency.

_{I just had to stick that one in}

It is a lie. . . .rise in fuel prices will not cause inflation

It will cause deflation. . . in people's wallets

Harder days ahead.Difficult time awaits nigerians under this regime that has lost its bearing.Where in the civilized world will a thing like this happen or policy implemented.Only in nigeria of course.How has this administration bettered the lives of the nigerian people?One begins to wonder if the government have human feeling considering the recession, high rate of unemployment,high cost of living etc.Why must it be at this time that the president deems it fit to remove subsidy on petrol knowing fully well that energy is the bedrock of national development and the energy sector is in shambles.

All the same who suffers? The rich or the corrupt politicians in power?Was this part of their manifestoes before they came into office?With this deregulation,it sjust a matter of days prices of food and other essential commodities will begin to wear new price tags.I counsel mr president to have a rethink before our country is declared a "failed state".can we blame God for blessing us with oil?today many are praying and fasting for this nation when we are architect of our predicament.

TalkSmith:

In the UK alone, there has been fuel subsidy within their aviation industry. Please read it here. Furthermore, since the early 90's developed countries have been engaged in one form of subsidy or the other. Here is a further link to teach you some lessons this evening.
I still maintain your analogy is highly irrelevant. Your last statement is very debatable. For a competitive enterprise to ensue, all conditions needed for an effective have to be met. It will be very myopic of you to hold to the view that external conditions cannot nullify competitive enterprise. Not in a country like Nigeria, where the government have a stake in the enterprise. Moreover, as I stipulated earlier, equating apples with guava is not a sensible thing.

External conditions have to be properly incorporated and met if a competitive enterprise is going to emanate. It is just the same as a simple laboratory test to be undertaken - you have to meet with the external conditions which includes atmospheric temperature and pressure in order to have a good results with your experiment. I am not of a science orientation so to speak, but I know these things. From your writings, I can deduce you are one.
I love two of your phrases here: ''economic conditions are harsh'' and ''unsustainable subsidies.'' My question to you then, what is a 'sustainable subsidy'? My understanding of sustainability makes me to know that it covers economic, as well as the social and environmental areas of it. Does the subsidy currently in place by the Nigerian government ensure that? NO! Would subsidy removal and deregulation ensure sustainability within the Nigerian context? NO again! So what is the way out? Address either the unsustainable subsidy or the deregulation. Which is more easier to undertake and implement? In my opinion, it is the SUBSIDY. Why? It suits better our environment and development.
My goodness! For how long would I continue to annotate this point to you? I have used the analogy you stated to explain it to you, you still failed to comprehend it. I have previously to that, explained it to you in A-B-C, yet you still failed to comprehend. OK, here it is one more time: NO, subsidy is not the SOLE reason for the MTN move. As I earlier vibrated, you have a problem with semantics. In argumentative writing-discourse on a forum, it is pertinent to know the weakness of your proponent. Yours, happens to be semantics and lack of comprehension appropriately.
[s]In responding to your question, I would ask why is subsidy seen as undesirable? Because:
[list]
[li]It entails a high fiscal cost with dire consequences somewhere else in a budget[/li]
[li]It leads to over-consumption, bunkering, corruption and various other wrongs[/li][/list] If my above postulations are right, then it is stereotypical to assume there are no benefits associated with subsidies when all of the above measures can be easily mitigated. A cost-denefit analysis needs to be undertaken for the Nigerian market though. Are the mechanisms in place for such to be undertaken in Nigeria? YES! Unfortunately, the government and debosky believes deregulation is the best means out so cheaply. So maybe, you might be right truly.[/s](Oh! I just saw the tongue in cheek, so I am canceling my input).
And you my learned friend, has provided absolutely no information show how deregulation would work in a market environment such as Nigeria except to make reference to the GSM sector. How knowledgeable is that?!
Now you are beginning to sound like a scratched CD. Repair infrastructure? I have asked you what infrastructure has been repaired from the Oil revenues over the years? Why is it pertinent that ''HALF'' of the subsidy would now be adequately used to address this infrastructural repair? You my learned friend have failed to address this point over and over again!
Now I get where your main thrust lies. Due to dropping oil prices, it is unwise for the government to continue to dabble into subsidy. Instead, let its citizenry, ''external investors'' bear the brunt of dropping oil prices, by having to pay more and the government smiles to the bank with the proceeds thereof.

Listen, the fact that previous desired impacts of funds have not made any effects on its citizenry, is the more need to reject this deregulation of the oil sector. History has taught us over time, we would be subject to our own foolishness if this deregulation is accepted, when needed external conditions that should be addressed have not been undertaken.
Now, this is where I make your learning, interactive. Simply do an online search on working conditions of Nigeria's oil refineries, come back and tell me what your findings where. I do not want you to be a lazy student.
I love your arguments. Very weak indeed.

Do you know how much has been saved from removal of diesel subsidy in 2002/2003 till December 2008? Answer: N1.5 trillion according to the Minister of State for Energy (Petroleum) Mr. Odein Ajumogobia. Can you kindly explain to me, why this ''saved'' amount has not been channeled to making the manufacturing industry thrive since most industries are powered on diesel? On the contrary, PPMC cartels, politicians have been responsible for the soaring price of diesel in Nigeria. Is this not a worthy example for all to see that deregulation of the oil industry in Nigeria will NEVER work. What stimulus package has been undertaken from the subsidy removal, which has added economic input to the manufacturing sector in Nigeria?

Rather, industries are moving out of Nigeria which you have as well alluded to.
This guy truly humors me. Who made you the best rationale mind to decipher 'simply inaccurate content generated by sensationalist IN newspapers'? When you need points to support your argument, you run to newspapers, when newspapers give points against your argument, you refer to them as: 'baseless speculations IN newspapers.' And you have the temerity to question my comprehension? I am seriously laughing here mon ami.
Semantics once more! Is 'expansion' not a form of new development to the already established refineries? Are they mutually exclusive? Time duration is a fundamental key here. It takes times to have a truly functional refinery. Is that possible within this year? Next year? NO! Please rethink what you are typing next time. Adding hardship upon hardship.
Another of your incoherent argument. First it was 'competent management' now it is competitive, commercial oriented management. Please stick with one. I do not regard it in anyway as plausible. This is my own conclusion.

Obviously, we cannot change one another's view on this subject matter.
I agree with you here. So no further counter-argument on this.
Let me add my rejoinder here that, deregulation makes room for oligopoly. An oligopolistic market cannot work within the Nigerian Petroleum industry. It could have worked with the GSM sector, BUT not with the Petroleum sector.

As evidenced with the deregulation of diesel, a cabal of hungry of politicians, power and money shakers would sit on the market and ensure it suits their market taste. Deregulation would only make room for the dysfunctional society to get more worse in a country like Nigeria. These are my submissions. Take it or leave it once more!
I came back after reading this input of yours. I am not sure whether I would want to continue on this matter except I see further area of discourse which are new to the subject matter already argued in your rejoinder. Which would therefore, enjoin me to once again assume the role of a pedagogy.

Nice bantering and discussing with you.

Do you guys want to give people a headache ni. Tylenol don expensive nah.
These posts are a lil too long.

When this comatose and uninspiring administration took 5 naira off the price per litre i smelt a rat. Now its all come out. I cannot believe that some people here are making a case for this increase. Why should our refineries be down for more than ten years, why should the people who formulate policies gain from such an arrangement where petrol prices keep rising, what really is the subsidy? After privatising everything they want market forces to determine prices. If some young smart nigerians cant understand this then we have a long way to go