wirinet:

There is a fundamental problem with this subsidy debate, no private company would build any refinery as long as the govenment insists on selling crude at international price. Even if all the major products of PMS, diesel and kerosine is sold at N140, it will barely cover the cost of the crude, not to talk of the cost of refinery, land and administrative costs. People who collected licenses did so to enable them to import. believe me, no new private refinery would be build subsidy or no subsidy, so will always be at the mercy of international prices, leading to further pressures on the naira and inflation on its own. government should either build and maintain refineries or ensure a policy where private refineries buy crude at subsidized prices.

Thank you

A lot of this goons don't understand. Why would I a private company build a refinery in Nigeria ? When I am not protected, I am not making record profit personally. ONLY THE FG CAN BUILD THE REFINERY FACT

I watched this debate and I can categorically tell you all that this government has owned up to the fact that it cannot tackle corruption head on with the submission of the two ministers and Sanusi. They all admitted to the inability of this government to govern us but rather leave us to the wimps and caprices of corrupt capitalists. No government has ever admitted to ineptitude like this one in the history of this Nation hence we are the ones shackle with burden of the cost of a government's weakness, intimidated by capitalist. So Nigerians brace yourself for burden of your inept government.

To think I regard this woman  highly before today. This is her argument which holds no water as far as I am concerned.
Ngozi came out with all the chat and statistic of petroleum pricing in oil producing countries and non oil producing countries saying Nigeria's pricing is not going to be as bad/high as we all think. Madam minister I would like to ask you this, have you seen the level of infrastructural development and constant power supply by this countries lets take Ghana for example: a Ghanaian don't need to buy petrol to do anything other than fuel his car. In America a gallon of fuel ranges between $3.20-$3.30 (i.e gallon = 3.8ltrs) meaning an American buys on the average a liter of fuel for 85cent equaling N136.80 at the rate of N160 to a dollar. Can anyone in his sane mind tell me while a commoner in Nigeria should pay as much as an American at the gas considering the fact that his minimum wage is N18 000/mnth compare to his American counterpart that earns close to $10/hr. You see the greed of our government, knowing fully well that an ordinary Joe in the US wouldn't have to contend with power issues, bad roads, bore holes/well for water, food insecurity (Agriculture is highly subsidized in America), bad transportation system etc. This to me is like selling Nigerians short to the marketers and I believe GEJ and his team are basically telling us they are not going to do our bid but that of this capitalists. God help Nigeria.

Another major problem is our interest rate regime, with interest rate hovering around 20% and government bond around 14% per annum, no bank would give a refinery with long gestation period any loan. A refinery is not expected to return profit in less than 5 years, most times 10 years. Which bank would give such a loan when they can loan importers and have their money back in less than 90 days. Then we have not even talked about multiple taxes like VAT, and other myriads of taxes. There is also community issues to grapple with.

jmaine:

Na wao  

wetin do you ?

Again diesel subsidy has been removed now for almost 12yrs, I'm yet to see new diesel refineries under construction let alone investors fighting heads over heels to build 1. Diesel prices keep going up everyday and yet they keep telling us that competition would force down prices. where is the competition of this market forces. Mrs teacher stop teaching us nonsense we can see through your lies. God help this country.

Seun, if I cash you pere ooooooo.

It is dishonest to compare what happened in the telecommunication sector to the oil industry. In the late 90s mobile telephony was a new and very expensive technology, and so acquisition of mobile phone was very expensive. It was not necessarily competition that brought down prices, it was mainly due to cheap technology, including phones, Sim cards, computers, etc. In the oil industry technology is not going to drive down prices. In fact the oil industry operate like a mafia worldwide, so it very unlikely competition would drive down prices.

ALL DIS BIG BIG ENGLISH NA GRAMMAR WE ALLSTILL DE TALK.ARAB SPRING ABI NA NIGERIAM WINTER NO GO SOLVE problem,ask the libyans its lust one cabal takin over where the other left off.its time for those claiming to be "good guys" to challenge the "bad guys" at the polls,VIA formin new or joinin properly marketed, dedicated,led political parties, usin the power of recall every year if need be, in the courts and finally wen all hell breaks cos it will as evidenced at lekki,on the streets ak47 for ak47, sniper for sniper, rpg for armored car, stinger for aircraft etc otherwise we're jus goin round in circles cos the cabal my 2kobo

naija my country.

I didn't feel any pulse for the masses from the govt reps, a lot of stories covering the real motives. Points i got from this debate are

1) No doubt, subsidy needs to be removed but under certain concrete conditions,
2) The govt categorically told nigerians today that corruption cannot be brought under control, as such the cabals are in charge of the economy. In that case subsidy removal is not the solution, cos every sincere initiative and policy will be hijacked by d same cabal.
3) If a federal govt agrees that it cannot build or run a refinery due to powers that be, then such govt has failed already. The only cabals that exist are the ones only allowed by the govt in power.

My conclusions are that govt is keen on removing subsidy and will do same in 2012; Things will get really messy not because Nigerians will revolt directly but there will be indirect reactions from various quarters that might get things out of control. Its gonna be dirty guys, yes it will cos nobody wants to die of hunger and starvation.

Less than 20% of the nigerian populace understands the dynamics being discussed but the impact will hit everyone. Don't be in a haste to predict reactions as people are already distressed with the currently subsidized PMS. There is a lot of poverty in the land already.

I think today's debate was a big step forward for Nigeria. One thing I took away from the debate was that there needs to be a sincere effort by both the government and opposition to move Nigeria forward. The mentality that the opposition has to oppose everything the government does will not help Nigeria. Yes, I accept and totally agree that there must be strong opposition but just opposing everything for opposition sake will not move Nigeria forward. There must be sincere dialog and collaboration amongst all. Other points I gathered from today are:

1. The opposition should please have some economic gurus to do these debates, not just lawyers and social critics. The likes of Femi Falana have good intentions but he is not an economic guru and most of his contributions are those of a social critic.

2. Nigeria has got some young talents that can take us forward. We must give them a chance.

3. The debate was really about Nigeria not just about oil subsidy. The debate laid Nigeria bare before our eyes to a good extent. for example, there are many policies that were selfishly made by the military that must be changed.

4. Oshiomole is just another good politician. Not a peoples man as he has tried to portray over the years.

rati ken:

I didn't feel any pulse for the masses from the govt reps, a lot of stories covering the real motives. Points i got from this debate are

1) No doubt, subsidy needs to be removed but under certain concrete conditions,
2) The govt categorically told nigerians today that corruption cannot be brought under control, as such the cabals are in charge of the economy. In that case subsidy removal is not the solution, cos every sincere initiative and policy will be hijacked by d same cabal.
3) If a federal govt agrees that it cannot build or run a refinery due to powers that be, then such govt has failed already. The only cabals that exist are the ones only allowed by the govt in power.

My conclusions are that govt is keen on removing subsidy and will do same in 2012; Things will get really messy not because Nigerians will revolt directly but there will be indirect reactions from various quarters that might get things out of control. Its gonna be dirty guys, yes it will cos nobody wants to die of hunger and starvation.

Less than 20% of the nigerian populace understands the dynamics being discussed but the impact will hit everyone. Don't be in a haste to predict reactions as people are already distressed with the currently subsidized PMS. There is a lot of poverty in the land already.

We need to properly define the term cabal. I think most are getting it really wrong. The cabal is not really powers/persons that be but more of policies/systems/environments that be. Anyone with the resources can take advantage of it. When some refer to Otedola and others as the cabal, they really get it wrong. The real problem is that, during the military era, many policies were made and systems setup to favor their selfish interests. Now anyone can take advantage and exploit the nation. Fuel subsidy is just one of those. Other examples are the number of states, LGs, number of government staff, policies barring private participation in many sectors, etc

Efforts to maintain our refineries have always failed due to corruption. How are we sure that we will not end up with abandoned projects if FG decides to build new refineries. NNPC with all its noise about being commercialised is unable to operate like its peers in Saudi and Venezuela for e.g. Even Angola that enjoyed our support during her fight for independence is many steps ahead of Nigeria in managing its oil sector. Angola has gone far by investing in the oil sector outside their country. Their state owned company SONANGOL is doing business in Iraq, Brazil and Venezuela. So whats the problem with NNPC or Nigerians generally?

What stops us from dealing with the corrupt ones among us? Strangely the beneficiaries of the helpless status of government are also "advisers" on the economy. What advise do we really expect from Otedola and Dangote who have to consider their personal business interests before thinking of the average Nigerian?

I believe we need the private sectors investment in our oil industry but its mainly because FG/NNPC are total failures with regards to project implementation and maintenance. Sad to agree that OBJ was right about privatisation of many things. The truth is that most people in public institutions are there just to steal and they get so rich, powerful and uncontrollable after a while. Nobody is punished yet our people continue to suffer.

Bottom line is that whether we like it or not, the subsidy is on its way out. What follows is a different matter.

Possible Pessimistic Subsidy removal scenario (in the absence of functioning refineries):

- Prices go up;
- Prices change frequently due to international price;
- Petrol stations display different prices;
- Petrol shortages due to stations waiting for new prices;
- Prices will differ from state to state;

- Inflation kicks in due to higher input prices;
- CBN raises interest rate to curb inflation;
- Higher interest rates sucks out more liquidity from banks;
- Busineses collapse;
- Unemployment increases.

- Social unrest and noisy headlines leads to Subsidy reintroduced; and
- Projects to rebuild refineries abandoned and we go back to sticking our heads in the sand.

the thing is removal is subsidy is not bad in itself especially if it is done right. it is the intentions of those pushing it I don't trust. I personally think GEJ & Cohorts just want to chop money.

meanwhile for those who believe in politicians (GEJ, Tinubu, Fashola, Oshomole , Sanusi). I tell you all politicians are same. You cant know their intentions.

We are not saying subsidy should not be removed but all the bottlenecks for poor people must be cleared. Government must ensure all these necessary amenities is adequately functioning, like:

1. There must be uninterrupted power supply- The major pms consume was on generator not cars. If there is electricity the amount spend on subsidy will be reduced. Poor people would not by generator or petrol for it.

2. All toll gate in the country must be removed.

3. There should free education from primary - secondary school.

4. Free health services for children between 0 - 10 years include pregnant woman.

, just to mention a few.


I strongly believed that if this sector is fully deregulated We will enjoy last, but our got must be transparency and accountable .

jeffman:

the thing is removal is subsidy is not bad in itself especially if it is done right. it is the intentions of those pushing it I don't trust. I personally think GEJ & Cohorts just want to chop money.

meanwhile for those who believe in politicians (GEJ, Tinubu, Fashola, Oshomole , Sanusi). I tell you all politicians are same. You cant know their intentions.

If GEJ just wants to chop money, he doesnt need to remove subsidy. That will be a long route. He just simply needs to collaborate and connive with the fuel importers or better still, add one of his proxies to the list of importers. Have you ever thought of that? Allowing the money to come into the system before trying to "chop" it, is a very loooooong thing.

Sometimes you just have to believe even in the midst of chaos. Not the whole world is as bad as you might think.

dmainboss:

If GEJ just wants to chop money, he doesnt need to remove subsidy. That will be a long route. He just simply needs to collaborate and connive with the fuel importers or better still, add one of his proxies to the list of importers. Have you ever thought of that? Allowing the money to come into the system before trying to "chop" it, is a very loooooong thing.

Sometimes you just have to believe even in the midst of chaos. Not the whole world is as bad as you might think.

Did you ever live or grew up in this country at all, you're so naive you about workings in Nigeria. who told you that GEJ and his cronies don't have stake in all this importation cabal's bizs, does it surprise you that we keep hearing cartel, fraud in the sector etc. and yet a single soul is yet to face the
wrath of the law. Sit down there and believe politicians even Okonjo acknowledge trust issue with government so what has changed between then and now. Is it not the same PDP (Old wine in new bottle).

yd849ja:

Did you ever live or grew up in this country at all, you're so naive you about workings in Nigeria. who told you that GEJ and his cronies don't have stake in all this importation cabal's bizs, does it surprise you that we keep hearing cartel, fraud in the sector etc. and yet a single soul is yet to face the
wrath of the law. Sit down there and believe politicians even Okonjo acknowledge trust issue with government so what has changed between then and now. Is it not the same PDP (Old wine in new bottle).

Are you minding the mumu, Please ignore the mumu

he is very biased with his thinking along the tribal line

And what is Adams Oshiomole saying? I thought he had some beautiful mathematical calculations in the date of Obasanjo! Now, he is a governor and he knows better!!!

@dmainboss nobody will give us a chance. we have to take it. e.g. we form petroleum consumer union and gada money to build refinery take over from cabal shikena

@ Post,

After watching the debate, I wept uncontrollably. There is no way forward except by divine intervention. The Govt's argument is tuned towards recouping more money to enable them spend suitably in accordance with their flamboyance and charade. This has been re-termed as pertinence to provide infrastructure and welfare. Their slogan “breaking the cabal for the benefits of the poor”. I beg to disagree with the government. In my opinion, I believe it is the key cabal heads that made this proposal to devise new methods to siphon our wealth considering that many unknown names have come to share out of their bounty treasure. I shake my head vigorously.

The opposition camps allegedly representing the masses are raising imperative issues on the ripple effect on the poor populace as raised in Voodoodoll's post above. Truth be told, the government does not understand these effects. They have long been exposed to corruption and wasteful living to articulately reason aptly. How do we the populace purchase petroleum products when the hardship sets in? More people will be made poor while few get rich. Who will regulate the prices of petrol from skyrocketing to N1000 as was observed with cement? As Nigerians, of what benefit is crude oil in its bounty to us? Isn't it wise for these goons to discern that the time has come to breakaway from outright dependency on crude oil before talking subsidy? Of what use is Okonjo's position in IMF and World Bank to the common man that makes 80% of the populace? The same cabal that falsify import documents to reflect higher quantity will devise suitable ways to control the market price above the minimum permissible and the only action from the government will be a call to the chairman on the cabal to reduce prices guided by no policy. Like it has been rightly said, if the refineries work and crude oil is still sold at international prices, there will be little or no difference. Thus is it out of place for the government to ascertain our local crude oil consumption within a given period?, sell same at a conducive price above cost price (there is a distinct difference between cost price and international market price) for refining by transparently selected companies wherever they may choose to refine the product, locally or abroad (locally will be beneficial to the economy). Prepare a monitoring and control system to verify the refined products considering that X amount of crude oil must result in a given quantity of refined products. Thereafter, the distribution of the refined products will be monitored for local consumption to forestall siphoning to neighbouring countries. The final cost of PMS may eventually cost less than N65. This is a different and more efficient model from the existing subsidy model. The rest of the crude oil can be sold at international market price coupled with marginal profit obtained from the crude oil set aside for local consumption. This will be a win win situation, except the economists and finance experts in government tell us that our local consumption is over and above a tolerant level and selling slightly above cost price as against international market price will greatly portend huge risks to our GDP because the left over to be sold at prevailing market price will be inadequate to foot our huge mismanaged recurring expenditure. Which I doubt.

Should the subsidy be removed and the projects commence, corruption will erode the benefits. Contract inflation which is the garment of government will not allow the common man enjoy the benefits. For every contract awarded, the cronies in government are huge beneficiaries of kickbacks, more reason some Ministers can not face the question on punishing the cabal because they have been highly compromised.

I foresee a painful consequence of this proposal. None of these guys know how huge it will be. Petrol is a necessity and any positive or negative effect will have a related impact on the lives of the common man. Diversification of our economy is the way to go. Other sectors must begin to contribute to the income of this country. Crude oil should not be the basis for the survival of our nation. The economic team should turn away from their lazy approach to sustainability and put on their thinking cap for more ways to improve the quality of lives.

In conclusion, I will advice the government without further delays to put an end to this cabal nonsense whilst the subsidy is still on by putting together a system that monitors the imported petrol and curtails the ongoing corruption. Thereafter, seek ways to ensure our refineries are working. A public Private partnership may be apposite. Furthermore, consider the option of not selling crude oil for local consumption at international prices. Lastly, the government must diversify the economy for real income. It is absurd that we import rice at the quoted figures we see; it is shocking that we do not have constant electricity; it is amazing that several billions went down the drain during Obj era for improvement of electricity without queries or reasonable actions; it is worrisome that ore-benin road has further degenerated without solution for years and the presidential kitchens are allotted N1bn for food; it is daunting that a satellite got missing in space without inquiry; it is bizarre that all the charlatans in govt screaming removal of subsidy solely because they allege that they want the cabal broken (which is untrue) do not purchase fuel; So help we Lord!

The leaders advantage.

JONATHAN AND REMOVAL OF FUEL SUBSIDY- NO GOOD CARE FOR THE POOR MASSES.

If I may say, our past governments and Jonathan have not shown much love to the poor masses but a camouflage, unlike in some countries were the government is trying to make the rich and the poor alike. Some years ago, CNN correspondents went to China to hear from the poor but opinion of those thought to be poor are not because they said that government cares for them.

According to Finance Minister, Dr. Ngozi Okonjo-Iweala, the fuel subsidy is actually benefited by a wealthy few. The actual amount for PMS is about N139 and then the government pays up N74 to let the price fall to N65. The N74 is the amount paid by the government as subsidy. Now, if the subsidy is removed, will the wealthy few still enjoy this money? Yes of course. They will still sell their products at N139, but this time, the masses will pay the money. Even if the PMS rise to N160 or down to N110, the wealthy few will still make the money and have their way.

The government, in an attempt to have a win on its decision to remove the fuel subsidy has gone as far as spending a whopping sum on those who are seen as a threat to its decision. But there are many others who are ready to give their lives than allow this removal of fuel subsidy.

DANGERS THAT CAN ERUPT FROM THIS REMOVAL OF FUELL SUBSIDY

1. Fixed Income Recipients like Civil Servants and Others will be Hurt.
Because while the price inflation increases, their income doesn’t increase, therefore their income will have less value. Because the price of fuel has increased, invariably the cost of transportation, the prices of goods and services will increase too. Then who will suffer this? The civil servants and some others in private sectors suffer it because their salaries remain the same. Unless the President, Governors, Private Sector will promise increment in the salaries of civil servants and other workers in private sector. But if that is done, there may be risk of monetary inflation (i.e. when there is a rise in the quantity of money in an economy).

2. Risk of Inflation.
Inflation hurts economy, individuals and companies alike. The pin-point here is basically the price inflation(i.e. when there is a rise in the general level of prices of goods and services). Because the price of fuel has increased the cost of transportation, the prices of goods and services will increase too. If the cost of transportations, prices of goods and services increase, my fellow Nigerians who will suffer this, if not the poor masses. It is time to bridge the gap between the rich and the poor in this our noble country.

3. Fear of Embezzlement, Dishonesty, Mismanagement, and Instability in Government.
The poor masses cannot trust the government any longer because the past governments have raped their trust. The people see the government and the politicians as embezzlers and empirically I think this is true. How can we trust you now my President if you will not follow their footsteps? You have to prove otherwise to the poor masses before they can trust the government and politicians again. You might be honest but what about other government officials, politicians who will manage the proceeds from this?



4. Eruption of Autocratic Government
The government is inviting the spirit of Arab Springs with its dogmatic decision. In Nigeria, we practice democracy, which was defined by Abraham Lincoln as the government of the people, by the people and for the people. If the majority of the masses are against this removal of fuel subsidy why should the government go on to uphold it. Mr. President, the masses employ you to be there and work for them. You are a ‘servant’ and the masses are the ‘employer’ as rightly pointed out by late President Yar’adua. We elected you for our own benefits. Do not alone decide for us but we all decide for ourselves for common good. Our government shouldn’t be autocratic in policy but seek the opinion of the masses in its decision making. This is clear evidence that autocratic government is cropping up in Nigeria to rape our democratic government. My fellow Nigerians, let us say no to this eruption.

5. The Mind of the Initiators
My president, what do you think were in the mind of these noble fuel subsidy initiators? Don’t you think it may be a way of helping & showing good care & love to the poor & less privileged? Don’t you think it’s a way for the Nigerians to enjoy this God’s gift of crude oil & other natural resources in our noble country, which are not only to be enjoyed by the cartels & cabals. This is a country where we have great unemployment .A person you went to school with is been paid in millions because he or she has his or her way to the government, while his or her mates who are out there unemployed even with better results have nothing doing. There is need to revisit the past & know the cause of things. The beginners have something in mind when initiating this noble fuel subsidy. Until we transcend that stage, I don’t think it is just to remove it now.

6. Discouragement of the Investors and Savings
Many investors may be scared to invest in Nigeria. Many companies will have to go out of business because of the losses they may incur during this inflation and its effects. There might be investors in area like refinery but what about other areas. When many companies go out of business, unemployment will increase. This is incomparable with employment of the prospective refineries by investors. If it will work because there are insecurity, power failure, less infrastructures etc. to welcome and accommodate these investors. Saving money in the banks or anywhere is negatively effected and discouraged because saving money would mean watching your cash decrease in value day after day, so people may tend to spend the cash on something else. The central bank and other banks will loss likewise.

7. Our Value of Money in Danger
The increase in the price of fuel brings increase in the prices of goods and services. This brings price inflation thereby low value of money is one its negative effects.

8. Currency Debasement and Rising Prices of Imports
When there is low value of money and other negative effects from this inflation, it lowers the value of our currency. If the currency is debased, then naira purchasing power in the international market is lower.


POSSIBLE ALTERNATIVES.

Why subsidy removal? Because the government is trying to liberalized the market fire. I believe a reasonable government will try work on the system before putting the load on the innocent masses that are already drowning in poverty as a result of bad government. I think the possible thing to do is to build refinery in 6 geo-political zones. Think about repairing our refineries and stopping importation of fuels since we have these natural resources in our country. Then the poor masses may not feel the pains of fuel subsidy removal. The most of what Jonathan was promising to do with the extra oil revenue were already accommodated in the budget even without subsidy.

The government should engage themselves in cutting down the salaries, allowances and other running expenses of the top government officials especially the lawmakers from the federal to the local government. Imagine a lawmaker going home with more than N255,000,000 and N224,000,000 yearly. Then you can calculate this for a tenure(4yrs) or two tenures(8yrs) and multiply it with their numbers(i.e. 109 senators& 306 house of representatives) and see our country’s trillions of naira in the cartel’s pockets while the poor masses continue to suffer. The government has no plan or future for the poor masses. Governor of Central Bank, Sanusi Lamido had last year said that lawmakers consume 25 percent of Nigeria overhead budget.

According to Olusegun Mimiko, the Governor of Ondo State, Nigeria spends about N24.5 trillion yearly which is about $160 billions in importation of food. We have land resources, human resources but the government does not care to utilize these to help the poor masses. They only inflict pains on the masses by trying to remove fuel subsidy. The president should ask himself this question “what if there is no crude oil in Nigeria?” The biggest problem of our country is not subsidy but corruption. If the president can deal with this corruption especially among politicians, cartels, cabals and individuals, he will surely have a lot of fund to move this noble country to a greater height.

There is insecurity in the country. Does this not occur to the president that it is effects of unemployment of these promising youths in the country? Blessed are those who know the cause of things because cause has effects. Instead of our lawmakers debating on the causes of the present situation in our country and see solution to it. They sat and discussed about the same-sex marriage(gay) issue which has nothing to do with African Culture. The lawmakers should have known that this cannot work in Nigeria because African moral values and culture has no place for it. It is a deadly virus from the Western World. My President and the lawmakers, please there are other issues to discuss that is brutally effecting the nation like insecurity, unemployment, corruption, electricity etc.


Finally, there are many ways to better our economy and the lives of the people. The money to set-up infrastructures, companies, refineries etc must not come from the proceeds of fuel subsidy but can come through other means. Yes the removal of fuel subsidy has its positives effects but I think it is not yet time to remove it my president. Think about the fate of the poor people of Nigeria, think about us the unemployed youths. Where do we get the money to buy goods and services especially fuel if the subsidy is removed. Thanks



OKAFOR KENNETH
Kenitho27@gmail.com
08063457763
20 ST MICHEAL STR. ABAGANA, P.O. BOX 243 ABAGANA, ANAMBRA STATE, NIGERIA