faithin9ja: 3 months ago diesel was almost N168 per litre, no subsidy for diesel, now diesel is N150 per litre, no subsidy on diesel. All over Nigeria the are signs saying 'call this number for home diesel supply' . This is how a market works. When diesel and kerosine were deregulated almost 9 years ago we thought the country would die.

If there is no subsidy anyone can sell petrol at any price, we will not die. How many 'real Nigerians' benefit from petrol subsidy. Even those entering molue and luxury buses actually use diesel, small buses use petrol, so prices will go up by 20%, lorries that carry foodstuff use diesel, factories that use generators use diesel.

How many real Nigerians own cars, how many carpenters, washer men, farmers, primary school teachers, shoe makers, tailors, etc how many of these people own cars that benefit from the subsidy?

jimblaze: Why is everyone saying that Femi Otedola does not import fuel? Fellow nairalanders correct me if am wrong, but doesnt he own AP? and doesn't AP sell fuel?

Kobojunkie:

What has Nigeria's amalgamation to do with this? These are the crop of leaders you folks continue to blindly elect. What did you expect? magic?

This is all a good example of reaping what you sow . . . Nigerians went to the polls in the millions to vote these leaders in, from the president to the local government chairs.

ghostofsparta:

Nigeria's amalgamation has everything to do with this. If the various incompatible tribes hadn't been forcefully made to marry eachother under duress (British gun) would this failed nation ever exist? And FYI I haven't seen considered myself a Nigerian

ghostofsparta:
I am an Oduan, Yorubas have been existing for thousands of years even long before Lugard's greatest of the great grand father started weaning.

ghostofsparta:
Also I have never voted because of 1. Wasn't of age 2. Will never unless they begin to swear under the presence of Amadioha, Ayilala, Shango, Ogun and Shokpona The 5 OSASA

faithin9ja: 3 months ago diesel was almost N168 per litre, no subsidy for diesel, now diesel is N150 per litre, no subsidy on diesel. All over Nigeria the are signs saying 'call this number for home diesel supply' . This is how a market works. When diesel and kerosine were deregulated almost 9 years ago we thought the country would die.

If there is no subsidy anyone can sell petrol at any price, we will not die. How many 'real Nigerians' benefit from petrol subsidy. Even those entering molue and luxury buses actually use diesel, small buses use petrol, so prices will go up by 20%, lorries that carry foodstuff use diesel, factories that use generators use diesel.

How many real Nigerians own cars, how many carpenters, washer men, farmers, primary school teachers, shoe makers, tailors, etc how many of these people own cars that benefit from the subsidy?

VolvoS60:

Sir,

You give the impression that the removal of the so-called 'subsidy' on PMS will lead us to paradise, so to speak. But the question I have asked repeatedly on these boards (and never gotten an answer to) is this: Why have we had nearly annual shortages (some of them crippling) in AGO and DKK? (kero) supply in the 9 years since the market for these two fuels was 'deregulated' as you claim? Can you guarantee sir, that after the removal of the 'subsidy' of PMS, there will be absolutely no supply shortage? Can you?

We all know the real reason why Nigeria's oil and gas sector is in the state it is in. Instead of Nigerians to demand answers from their governments on why not a single state-owned utility can be properly and transparently run by Nigerian bureaucrats, they allow themselves to be led by the nose and taken for a ride, all the time. If Brazilians, Bolivians, Saudis, Venezuelans, etc. can operate state-owned utilities, some of which subsidize petroleum products, actually operate refineries AND TURN A PROFIT, then what excuse does Nigeria have?

The NNPC did not have audited accounts for almost a decade. Nigerians should have insisted that someone be shot for that crime. Did they?

Nigerians have not suffered enough yet. I repeat, they have not suffered enough yet. When we are well and truly fed up, we will know what to do. As someone said on another thread, when the choice before Nigerians is "which of our children shall we eat today?" then perhaps we will drag ourselves away from our most beloved opiates (La Liga/English premiership football & big brother africa) and force the change that is needed.

Kobojunkie:

If you truly do not consider yourself a Nigeria, what the frell are you doing commenting on a thread that pertains to Nigeria and Nigerian Government?

Please go tell that fro-fro crap to someone who will think it makes sense of some kind.

If you have never voted, again, what the frell are you doing even voicing your opinion here? If you were silly enough to REFUSE to vote for better for Nigeria, why are you here COMPLAINING when your vote could have changed things? Abeg . .. stop wasting space on here.

faithin9ja:

This is the problem, you still want to use old methods to cure old problems, NNPC is bad, yet you still want government, NNPC or any other government agency to run or control anything? You have to change your mindset that anything controoled by government especially in Nigeria DOES NOT work.

The day government sets up a board or committee or agency to ensure cheap 'garri', that day there will be shortage of garri in the country. Stop comparing us to other countries.

when last was there diesel shortage in this country? what is the point of cheap commodities if the commodity is not available. Years ago under Buhari we had 'foreign exchange controls' which caused shortage of 'essential commodities'. In a failed effort to keep prices down, government started rationing these 'essential commodities' soap, rice, toilet roll, etc. There was widespread shortage.

Most people are too young remember that. During Abacha regime there was fuel scarcity 6 out of 12 months, we were forced to buy fuel from black market at 4 times the official price, this quite apart from the noxious fuel that Abacha cronies were importing.

Government should remove hand from petrol, the price will go up surely, only because the price is artificially low right now.

What right does any Nigerian have to cheap petrol?

High_Chief:

Don't you comment on threads that have to do with other countries? Don't other Non-Nigerians comment on this board?. You are always looking for a way to pick up an arguement so you can start spewing balderdash.

thegoodjoehunt:

I get your point but the burden will be too heavy. The burden for this recent increase is still eaten us and the money is long gone. If we take more burden, the rest will be swallowed. What we need now is to find out how money leaves the System and demand accountability. You can see how privatization lead to wastage of public property. Them selling it to themselves for little or nothing while the masses went through hell. What we need is a more transparent system put in place for running public offices to prevent things from being swept under the carpet and a lot of laws that protect corruption removed. Instead of making things worse.

Other incentives should be made to make marketers want to keep products in Nigeria and these incentives should take more money off the hands of the Government.

faithin9ja:

I really don't want to go into a full bloan macro economics lecture, but suffice the era of subsidised petrol seriously damages the wider economy of the country, for the past 3 years we have been able to maintain our foreign reserves and simply put the dollar to naira has been more or less stable.

if the nation continues to subsidize petrol, with a large proportion of this money entering pockets of customs men, bankers, NNPC staff, Navy boys, bankers and then petrol marketeers and politicians our balance of payments will go south, there will be a massive devaluation of the naira and just like the mid 80's in IBB's time the so-called middle class (those who protested with their tokunbo cars) will be hardest hit.

Take away the subsidy there will be less room fraud, water will find it's level. Those who need petrol will still buy.

thegoodjoehunt:


First of all the story of the Chunk of the money going into the hands of corrupt individual is bogus. If someone imports Products worth N100 and the government pays for N60 and the masses pays for N40. Where is there money to be looted. How come if the masses pay N100 for that same product, there will be no looting.

Finally the case in question is the government giving companies money to import Petrol and they don't do it. How will the masses paying for everything stop the looting because the government will still need companies to import these fuel. The only way is for the companies to use their own money to bring in the fuel. The subsidy can still stand for this to be done.

Kobojunkie:

If you truly do not consider yourself a Nigeria, what the frell are you doing commenting on a thread that pertains to Nigeria and Nigerian Government?

Please go tell that fro-fro crap to someone who will think it makes sense of some kind.

If you have never voted, again, what the frell are you doing even voicing your opinion here? If you were silly enough to REFUSE to vote for better for Nigeria, why are you here COMPLAINING when your vote could have changed things? Abeg . .. stop wasting space on here.

faithin9ja:


I really don't understand your post. Government should not give anybody money to import anything!!! Right now if you have money you can import diesel, you use your own money and sell at your own price. shikena!!! that is what is also going to happen with petrol. Government will not be giving anybody N40 as in your example, we all will pay the N100 period. There is nothing we import right now that the government subsidies, we all pay the market rate. We should pay the market rate for petrol, after all even the cars we buy, we pay market rate, we should we have cheaper petrol?

faithin9ja:


I really don't understand your post. Government should not give anybody money to import anything!!! Right now if you have money you can import diesel, you use your own money and sell at your own price. shikena!!! that is what is also going to happen with petrol. Government will not be giving anybody N40 as in your example, we all will pay the N100 period. There is nothing we import right now that the government subsidies, we all pay the market rate. We should pay the market rate for petrol, after all even the cars we buy, we pay market rate, we should we have cheaper petrol?

faithin9ja:

This is the problem, you still want to use old methods to cure old problems, NNPC is bad, yet you still want government, NNPC or any other government agency to run or control anything? You have to change your mindset that anything controoled by government especially in Nigeria DOES NOT work.

The day government sets up a board or committee or agency to ensure cheap 'garri', that day there will be shortage of garri in the country. Stop comparing us to other countries.

when last was there diesel shortage in this country? what is the point of cheap commodities if the commodity is not available. Years ago under Buhari we had 'foreign exchange controls' which caused shortage of 'essential commodities'. In a failed effort to keep prices down, government started rationing these 'essential commodities' soap, rice, toilet roll, etc. There was widespread shortage.

Most people are too young remember that. During Abacha regime there was fuel scarcity 6 out of 12 months, we were forced to buy fuel from black market at 4 times the official price, this quite apart from the noxious fuel that Abacha cronies were importing.

Government should remove hand from petrol, the price will go up surely, only because the price is artificially low right now.

What right does any Nigerian have to cheap petrol?

VolvoS60:


Faithin9ja,

Sir, you claim that I want to use old methods to cure old problems. No sir!! You say this because I have chosen to ask the simplest question of all: Why have those who ran NNPC and other public utilities into the ground (through sheer criminality) not been punished? Laws were broken. Where are the consequences sir, for these people and their actions?

That sir, is the 160 million naira question.

It is becoming harder sir, to promote the idea of market forces while ignoring the complements which make these same forces work in other countries. A Harvard economics doctorate will not guarantee a free pass anymore - I am filled with a certain amount of satisfaction that the demystification of Nigeria's "Chicago boys" (& girls) is almost complete. (I refer here to the likes of the Minister of Finance who vigorously campaign for the removal of 'subsidies' but remain silent about shocking graft and larceny by public sector officials and their private sector collaborators. Apparently, in the technocrat's handbook, morality, ethics & law are irrelevant footnotes best handled by sociologists and other pretenders). NOI and co. will have us believe that 'subsidies' lead to macro-economic distortions and resource misallocation. What about corruption? What does that do to the economy? What do you 'free marketers' have to say about that?

Nigerians are a bit wiser now. They are beginning to ask a few questions. They may not know the intricacies of laissez faire economics but they do know when a public official has clearly abused his position and broken the law.


Sir, I noticed that you cleverly sidestepped my points about successful state-owned utilities in several other countries with your command that I "stop comparing us to other countries". Indeed, sir. I would have complied but facts are stubborn things. They will not go away even if we wish them to. Several oil producing countries with far, far higher standards of living than Nigeria DO 'subsidize' the prices of petroleum products. How do they do it?

I also noticed that you were silent about kerosene supply shortage in Nigeria, although you made a canny reference to diesel being widely available. Let me refresh your memory sir. In the last 3 years, there have been no less than 2 cases of severe nationwide shortage in the supply of kerosene.

Explain that if you can.

P.S. And what do you mean sir, that "I have to change my mindset that anything controlled by govt especially in Nigeria, does not work"?. Please explain.

VolvoS60:


Faithin9ja,

Sir, you claim that I want to use old methods to cure old problems. No sir!! You say this because I have chosen to ask the simplest question of all: Why have those who ran NNPC and other public utilities into the ground (through sheer criminality) not been punished? Laws were broken. Where are the consequences sir, for these people and their actions?

That sir, is the 160 million naira question.

It is becoming harder sir, to promote the idea of market forces while ignoring the complements which make these same forces work in other countries. A Harvard economics doctorate will not guarantee a free pass anymore - I am filled with a certain amount of satisfaction that the demystification of Nigeria's "Chicago boys" (& girls) is almost complete. (I refer here to the likes of the Minister of Finance who vigorously campaign for the removal of 'subsidies' but remain silent about shocking graft and larceny by public sector officials and their private sector collaborators. Apparently, in the technocrat's handbook, morality, ethics & law are irrelevant footnotes best handled by sociologists and other pretenders). NOI and co. will have us believe that 'subsidies' lead to macro-economic distortions and resource misallocation. What about corruption? What does that do to the economy? What do you 'free marketers' have to say about that?

Nigerians are a bit wiser now. They are beginning to ask a few questions. They may not know the intricacies of laissez faire economics but they do know when a public official has clearly abused his position and broken the law.


Sir, I noticed that you cleverly sidestepped my points about successful state-owned utilities in several other countries with your command that I "stop comparing us to other countries". Indeed, sir. I would have complied but facts are stubborn things. They will not go away even if we wish them to. Several oil producing countries with far, far higher standards of living than Nigeria DO 'subsidize' the prices of petroleum products. How do they do it?

I also noticed that you were silent about kerosene supply shortage in Nigeria, although you made a canny reference to diesel being widely available. Let me refresh your memory sir. In the last 3 years, there have been no less than 2 cases of severe nationwide shortage in the supply of kerosene.

Explain that if you can.

P.S. And what do you mean sir, that "I have to change my mindset that anything controlled by govt especially in Nigeria, does not work"?. Please explain.

faithin9ja:


firstly, in Nigeria anything controlled by government has systematically gotten worse over the 50 or so years of our independence. From education to health, anywhere you see government, whether local government, state government or federal government, the majority of the ministries and departments function badly.

Unfortunately the average Nigerian believes the government owes them a job, In the 1970's when we had 6 universities, graduates upon completed their education is was standard for the graduate to get a level 8 job, these jobs were really glorified 'welfare benefits'. Very little was done to promote production or stimulate the wider economy. Nigerians became used to going to an office, pushing papers around and then getting paid at the end of the month. We took this lackadaisical nature to work even in government owned businesses, Nigeria Airways, NPA, Federal Palace hotels, daily times, too many to name both at Federal level and State level. Instead of these businesses making a profit and gving money to the government they became a drain and conduit for employing 'your brothers and people from your area'.

During IBB's time, the world economy changed and many countries like Nigeria were forced to face reality and become real producers. The so-called 'middle class' suffered. People had to start fending for themselves. hence the growth of the private sector. But in our 'mindset'the damage had been done. People still feel that government owes them a 'job'. Nigerians still want to work in big companies, earn big money but never question 'what they do for those companies'. We are all upset when bankers lose their jobs and blame SLS, but have we considered that since SLS no depositor has lost a single kobo from a failed bank, unlike during Abacha, the bank chiefs have run off with the money and we still expect to be paying bank staff big salaries, diesel allowance, holiday allowance, etc. What have these bankers actually brought to their banks (and don't tell me about using fine girls to find deposits)

We as a nation have the same mindset when it comes to petrol. Why do we feel we have a right to cheap petrol?

Kerosene
Much tainted house of reps. report and we all know that NNPC have distorted the kerosene market. by NNPC allegedly selling 'subsidized kerosene' at their so-called 'mega fuel' stations. This stops anyone from importing kerosene on the international market, you wouldn't be able to sell the kerosene when you land your product. No bank will fund you for such a venture.


Corruption

Corruption is endemic in Nigeria. We all quote 'where man work e dey chop'. So if it is possible to arrest and prosecute all those involved in the subsidy scandal; the so-called marketeers and importers, the NNPC and all her subsidiaries, DPRC,etc, Customs, NPA officials, Navy, the bankers who provide the loans & FX, Ministry of Petroleum, then what happens? we replace these people with who? those thousands of trained, qualified, honest Nigerians who will immediately take up these positions and never falsify one single record, abi? does that answer your 160 million naira question?

Other countries

Many other countries have had similar issues with attempting to subsidize markets; even the EU had scandals running into 100's of millions with agriculture subsidies, Iran has had huge petrol shortages just like Nigeria despite being one of the largest producers of crude oil, they too cannot refine enough product for local consumption, Venezuela has adopted the socialist concept, which Russia, China and even Cuba have abandoned or are abandoning. we shall see how that works for the local supply of cheap petrol.

Buhari
you quote Buhari's trade by barter of the 1980's. how successful was this? this was an attempt to save FX (which later found it's way into the black market. On paper it sounds feasible; so we supply a refinery say in Spain with crude oil and they supply us PMS, ok but who distributes the PMS when it gets to Nigeria? If I have 2 petrol stations in Calabar, and I need allocation of the cheap petrol, who do I meet? I will praying I have a friend or brother in the relevant department to facilitate the allocation.

Diesel

You don't have to beg anyone to supply you diesel. Go Ibafon with your tanker, you find people begging you to buy. That's the power of the market, you don't have to speak Hausa, Yoruba, Igbo or even Tiv or Obubra, just hold your money and you will buy.

Petrol

We have no 'right' to cheap petrol afterall we don't buy subsided vehicles. Free the market and it will wipe out corruption at a stroke, there will still be some minor corruption, bankers will also collect something before they give you the loan to import, but the kickback won't be as high as it is now because the returns are less, customs and NNPC will always collect something for the relevant licences, but once again it won't be as high. (it will become a fixed fee just like clearing a car at Tin Can).

anyway that's enough social commentary for one day

VolvoS60:


Faithin9ja,

Sir, we are warming up . I will address the points you raised one by one:

It is true that in Nigeria, government (at all levels), through its ministries and departments has performed very poorly in delivering on its end of the social contract. In your previous post you asked why I or anyone else for that matter, would want the government to run anything at all, given its poor track record. Sir, I must tell you that your viewpoint is a dangerous path to tread. There will always be a need for government. (I’m sure you know what market failure means). Some goods will always be public goods. In your view sir, the solution to the failure of our public sector is a significant reduction in the size or scale of government. In other words, less government. I DISAGREE SIR. Less government is only a partial solution, and a debatable one at that . The solution is BETTER government. All too often, ‘free marketers’ have framed the question as one of Big Government versus Small Government, an argument that is ultimately useless if the question of the quality of government is not treated with the same importance. Reducing the size and scale of government (through privatization of state owned enterprises, cutbacks in social spending etc) without tackling the core issues – issues such as ethics, building strong institutions, enthroning system-wide checks and balances etc will simply lead to crony capitalism. Remember the privatization of PEs/SOEs during the IBB & OBJ eras? Remember the oligarchs in the old USSR after Gorbachev?

You made some good points, particularly about the need for public sector workers to be weaned off the sense of entitlement they have. But there ARE millions of Nigerians who have never worked for the government and do not intend to do so. The informal sector and the formal sector in Nigeria, - which is larger? The subsistence farmer in your village, the mechanic down the corner – what do they rely on government for? They do their jobs without any sense of entitlement. It isn’t their fault that low quality governments have, for several decades, condemned them to work on the margins in the informal sector, with few rights and even fewer obligations. Better Government sir, Better Government!!!! Not necessarily less!!!

Sir, you also claim that Nigerians have a sense of entitlement when it comes to petrol. You ask why we feel we have a right to ‘cheap’ petrol?! Sir, this topic has been debated extensively on these boards. I’m sure you are aware of the foolish position we are in, where Nigeria exports crude petroleum and imports finished petroleum products, simply because our governments/bureaucrats/technocrats destroyed their country’s refineries. What does it cost to produce and refine a litre of PMS, AGO and DKK (kero?) in Nigeria? And what is the landing cost of a litre of each of each of these items if imported? We want the truth. You also claim that the NNPC has distorted the kerosene market by selling ‘subsidized’ kerosene (the same product on which you claim the ‘subsidy’ was lifted 9 years ago!). So, is there a subsidy (on kero) or not? You also mentioned that the NNPC’s distortion of the market through its sale of ‘subsidized kero’ stops anyone from importing profitably. Sir, please ask yourself an honest question: should Nigeria be importing even ONE litre of finished petroleum products? Should she? This is the question Nigerians are asking. People destroyed Nigeria’s refining capacity and created a fraudulent import scheme through a house of lies and tricks. Rather than take these people on, Nigerian governments have chosen the path of least resistance – the removal of the so-called subsidy. All right, remove the damn subsidy if you will. But only on the condition that those who sabotaged the refineries be tied to oil drums and shot in the chest. Anything else is nonsense.

Sir, I notice that you entered the realm of ‘possibilities’ when you mentioned the issue of tackling official corruption in your piece. You had brilliant, elegant, theoretical arguments to support laissez faire economics, but all of a sudden, you became a pragmatist when the issue of corruption came up. As I said earlier, this is the reason why so many academics/technocrats lose all credibility after public service in Nigeria. To reduce the issue of corruption to a footnote is the height of self-deception. We have to decide whether we are serious about solving our problems or not.

I mentioned at least 4 oil producing countries, some of which ‘subsidize’ the price at which the product is sold locally. I noticed you didn’t say anything about 3 of them, and curiously, you singled out the Venezuelans for criticism. What of the Saudis? And the Brazilians? (And also note the strides that Brazil has made in alternative energy, and the incentives to encourage its use. What has the Nigerian government done?). To prove that Nigeria is not alone in her folly, You also mentioned the Iranians having to deal with crippling fuel shortages resulting from inadequate local refining capacity. Perhaps, just perhaps, sanctions by the EU and the US over Iran’s nuclear programme (preventing the importation of spare parts for Iran's refineries)may have something to do with this, sir?

Sir, I said absolutely nothing about Buhari. Please go back and re-read my post. In it I also asked why we have had shortages in diesel and kerosene in the 9 years since the subsidy on these items was removed. You still have not really answered this question. You constantly refer to the availability of diesel at the moment. Are you telling me that in the 9 years since the subsidy on diesel was removed we have not had any shortage of diesel? Is that what you are saying? And I also note that you have admitted the ‘inevitability’ of corruption (although ‘minor’??!!) even after the market has been ‘freed’, (to use your own words). Sir, this admission by you simply reinforces what I have said all along. Official graft is the enemy. Not the so-called ‘subsidy’. Nigerians have to force their governments to be accountable. Markets, in of and by themselves, are imperfect. They will never be able to do what people have to do.