Wait a minute do you know what they call Private and Confidential? There are some operations and systems in governance that are usually private and confidential, but the mistake our colonial masters made is setting up a system of leopard skinned human politicians to oversee those confidential positions.
In my opinion i think those confidential positions should be handled by customized artificial intelligence robots (ike ChatGpt), then our leopard skinned politicians should be at the receiving end, this will guarantee transparency and accountability especially in a multi ethnic country like Nigeria.

nairalanda1:
Because if we keep the subsidy, we would see a rise in debt beyond what Buhari has incurred

Subsidy, roughly speaking, is what is paid to the petroleum sector as compensation for selling below the production cost of petrol.

The problem with subsidy is that government does not control the production cost of petrol. So, when it rises, the cost of subsidy rises, which means that we have to pay an increasing amount of money to cover the increasing loss from the increasing difference between the government set price and the production cost. This eats into the budget, and as a result, government has to take loans to cover the difference.

When the difference gets too much, in the past, government usually reduces subsidy cost by raising fuel prices a bit. As an example, in 2012, fuel was costing N65, landing cost was N99. Government raised prices to N97, meaning subsidy costs went down to N2 per liter from N34 per liter. (The above has been happening since the year 1973, which is why fuel is no longer costing 15 KOBO as it did in 1981!)

At the moment, we have too much debt, not only from covering subsides, but also from low oil prices from 2014-2021, which since oil is our main income source, means we have to take loans.

Throw in the fact that in all our neighbours, fuel is above N300 per liter. And people who are poor to people who are rich make lots of money smuggling fuel over the border. That worsens our subsidy costs. And yes, they should be stopped...the problem is, it isn't just the big takers doing the smuggling, it is also small guys with 50 l jerrycans carrying fuel over the border. Unless we want to build a fence, and staff it with one million armed border force people....

Note that OP, you are right about the negatives of subsidy removal. But the issue is...do we keep on throwing millions of naira daily to keep fuel subsided, and take loans and more loans, or do we remove subsidy, and save more money, and hopefully attract more investment, money and jobs to our petrol sector?

Keep in mind that subsidy is also why we cannot build and maintain refineries. And why refinereis get sabotaged. Ideally, a refinery should make a profit, and use that profit to run itself. Subsidy means that the refineries not only do not run at a profit, but whether they work or not, they get free money from government. And naturally, unscrupulous agents would damage the refineries to keep getting free money.

We are between the devil and deep blue sea. The thing is, subsidy removal could , if done right, lead to a period of prosperity after a period of hardship.


I know Nigerians do not like it. But at the end, if we had taken the subsidy removal road in 1993, by now we could have been a major exporter of high quality fuel to Africa and the world, and NNPC woulda had more than 4 refineries, and there would have been lots of private refineries.

Price controls do not work. Ask the USSR.

It's funny how the Buhari led government thinks us all foolish,
I understand that the production and landing cost of petrol has been increasing over the years and has become a strain on our financial budget. But take a moment to think sir, do you really think our refineries are redundant because their operations are not profitable? Petrol is only one of the many derivatives of the fractional distillation of crude(when refined locally). Diesel, kerosene, naphtha, bitumen and other petrochemical industrial derivatives are not subsidised! what happens to the billions obtained from the sales of this derivatives?
Petrol may not be profitable, but is diesel unprofitable, is kerosene also unprofitable?

This cat dance will continue until the government confronts the NNPC and demands accountability from her. Refineries are not working yet over 7,000 staffs are being paid billions in salary every month, and you expect the refineries to work? How? If I can get salary without working, why work at all?
Illiterate militants in the creeks of the niger-delta refine petrol using local crude methods, yet a country of 200million people will line her crude oil badges at the ports of Spain and India waiting, sometimes even begging for buyers☹️, then turn around, use the money derived from the sale to buy refined petroleum, then transport it back and lump all of this foolish expenses as "landing cost" and expect poor and frustrated Nigerians to pay for their careless and reckless ignominy.

If the government has really decided to go the fuel import way, then there is no need to be spending millions on over 7,000 workers in the refineries. Imagine 1.5 billion dollars was spent last year to patch this same refineries ☹️☹️ the subsidy removal should start by privatising all refineries and sacking it's redundant staffs. They are all a hoard of thiefs!!!

Basic123:

Ko le,
We will just bombard the internet with videos of their candidates supporting subsidy removal.

But Tinubu should increase minimum wage by 300percent

God help us. 300%?

That will cause hyper inflation, and destroy the naira. Industries will close in droves, and unemployment will skyrocket to previously unthinkable levels.

A loaf of bread will cost about N2000.

Increasing wages willy nilly will cause more harm than good.

Running a national economy competently is a delicate balancing act of constant juxtaposition of wants and needs with scarcity of resources. It is not easy.

Nigerians are expecting too much from the incoming government. The country simply doesn't have the resources to meet people's lofty expectations.

Tinubu will try, but he can't weave a magic.

ugonology:


It's funny how the Buhari led government thinks us all foolish,

I got converted into a fuel subsidy removal supporter in 2012, when Buhari was supporting oil subsidy. So, this is not about politics, it is about thinking things through.

And I don't appreciate your implication that I am foolish.

I understand that the production and landing cost of petrol has been increasing over the years and has become a strain on our financial budget. But take a moment to think sir, do you really think our refineries are redundant because their operations are not profitable? Petrol is only one of the many derivatives of the fractional distillation of crude(when refined locally). Diesel, kerosene, naphtha, bitumen and other petrochemical industrial derivatives are not subsidised! what happens to the billions obtained from the sales of this derivatives?
Petrol may not be profitable, but is diesel unprofitable, is kerosene also unprofitable?

It's because there are massive losses from subsidising petrol.

Running a refinery means that you lose some money on the waste product left from refining crude. You have to make a profit elsewhere. And it seems to me that the losses from petrol outweigh the gains from other sources. Petrol is the major product of most refineries.

If you were running a business, and one sector of the business is losing money, you either get it to make money, or you cut it off.

We subsidised stuff for years, and by the time we lifted subsides on diesel and kerosene in 2013, the lack of profits had done the damage. Bad refineries, corruption etc.

This cat dance will continue until the government confronts the NNPC and demands accountability from her. Refineries are not working yet over 7,000 staffs are being paid billions in salary every month, and you expect the refineries to work? How? If I can get salary without working, why work at all?

Because subsidy guarantees that there would be free government money regardless of whether the refineries work or not

Also, and this is critical, subsidy payments only cover the difference between the production cost and govt set price. It does not allow the making of enough profit to make sure the refineries work well.

Illiterate militants in the creeks of the niger-delta refine petrol using local crude methods, yet a country of 200million people will line her crude oil badges at the ports of Spain and India waiting, sometimes even begging for buyers☹️, then turn around, use the money derived from the sale to buy refined petroleum, then transport it back and lump all of this foolish expenses as "landing cost" and expect poor and frustrated Nigerians to pay for their careless and reckless ignominy.

And all this happens because of the distortions subsidy has put in the process. Make refining profitable , and no one would do it illicitly....as there would be incentive to refine legally.

If the government has really decided to go the fuel import way, then there is no need to be spending millions on over 7,000 workers in the refineries. Imagine 1.5 billion dollars was spent last year to patch this same refineries ☹️☹️ the subsidy removal should start by privatising all refineries and sacking it's redundant staffs. They are all a hoard of thiefs!!!

Meanwhile, removal of subsidy would end government spending on waste, and force the refinery workers to work for their money, and enable the inflow of money into the refining of petrol in Nigeria. And most of it would be private.

nairalanda1:


I got converted into a fuel subsidy removal supporter in 2012, when Buhari was supporting oil subsidy. So, this is not about politics, it is about thinking things through.

And I don't appreciate your implication that I am foolish

I genuinely enjoy your responses and I in no way whether tacit or implied consider you a fool, perhaps you disliked the flavouring in the mannerism of my presentation.
I do not dispute your general facts and I feel our disagreement is centered around a simple question? And that is, is the NNPC honest and accountable? If there were to be a transparency index scale, where would you personally rate them on the spectrum based on her antecedents. Your answer to this question will help us define how we treat figures, statistics and reports emanating from the NNPC.
I am not necessarily against fuel subsidy removal, as a matter of fact I got converted just about one year ago, I have always been an ardent advocate for the complete removal of fuel subsidy in Nigeria, Below is one of my posts from a similar topic sometimes last year.
Not until I read books by;
Nasir el-rufai, the accidental public servant.
Okonjo iweala, fighting corruption is dangerous and John walker, how we destroyed Nigeria.
My conclusions from all these is that the NNPC has always been the problem in Nigeria, their statistics, figures, reports and data are usually controversial and marred with unreconcilable information. They report to none, audited by nobody and answerable to only the president who doubles as the minister of petroleum.

Peter obi made a comment sometimes ago, where he compared the population of Nigeria and Pakistan, data showed an almost equal number of cars for the two countries as well as bad power supplies, yet the fuel consumption rate in Nigeria was 3times more than the consumption rate in Pakistan!

Something BIG is coming!!!