Sweetguy25:


1. In 2009, the Yar'Adua/Goodluck administration spent 1 trillion naira on fuel subsidies.

The amounts expended were less in previous years due to various factors which I don't have the time to explain.
http://www.bloomberg.com/news/articles/2010-09-03/nigeria-aims-to-end-oil-subsidies-within-6-months-finance-minister-says

2. This question is not clear. The federal government budgeted the sum of 580 billion for petrol subsidies in 2010. There are are bound to variances between the budgeted amount and expended amount due various reasons.

3. In his bid to ensure a steady supply of petroleum to Nigerians and end persistent scarcity, GEJ decided to increase the number of petrol importers and suppliers. This (coupled with an increase in USD/NIR exchange rate) resulted in a sharp increase in subsidy spending by almost 100 percent from 1 trillion to almost 2 trillion. Nigerians were enjoying a steady supply of petrol but with huge costs to the government.

4. None

5. To ensure a steady supply of petrol, which Nigerians can attest to that they enjoyed during past four years.

gohome:


Most OPEC economies do subsidy. The good thing about is that while some have a much more diverse economy, others have smaller population.

The UAE is 8 million migrant and 1.4 millions citizens. Budget is in excess of 4 trillion Naira. Economy is so diversed that only 4% of oil revenue go to Dubai city budget. If AkwaIbom gets 4 trillion annually, let me see how it won't be Dubai with free fuel.

i really do not know how to explain to these guys that we cannot afford it. No country with a population of 150 million plus pay subsidy on PMS.

Let them keep hiding under masses. Borrowing money to enrich few rich men. Sometimes I feel like disowning this country. People you try to help are the same people killing you.

gohome:


Thank you. I have learnt alot too from 989900 and PassingShot:

989900:


Obviously, no doubt.

How about N20>N0? I mean, that's what the common man gets when you remove subsidy, and the withdrawn subsidy funds are still siphoned by another ilk of unscrupulous subversives.

I am for 'subsidy' removal, given the level of unrelenting corruption that's on in that scheme. Putting a kibosh to it entirely would work. #Iknowmypeople

frehage:


How is that so? Do you care to explain what informed this your position. Remember Nigeria is an oil producing country? There are inherent benefits in being a producer of something that you just cannot deny a people. Why do you think most foodstuffs are far cheaper in states like Benue than in Lagos, Rivers, etc.

Why do you think serious countries build their economies around sectors they have comparative advantage?

As regards subsidy, PMB has already trashed that out. He said there is nothing like subsidy. He said our local installed refining capacity of about 450000 b/d(and fresh capacity will be added) is enough to cover our current needs. And where the local output is inadequate, as is currently the case, due to the poor state of our refineries, the crude equivalent of our refined products

gohome:


You do not need PMS for the Major economic drivers. Diesel yes, but not PMS. You want to waste 300 billion to 1 Trillion on petroleum subsidy and blame your government for infrastructural decay, No power, No light, external and internal debt, non payment of salary etc. You want your kids to be out of school, you want your wife to die in the hospital because you do not have good medicare, but you want to fuel your Gen in a leaking house? SMH

adanny01:


Thats the problem when you think i use petrol on generator only.

Is it not the same government who coudnt maintain refineries, build new ones, build hospitals, schools, poorly manage the subsidy regime? I should make sacrifices for them to continue their fraud and mismanagement?

A government has to earn the peoples trust before the people will make sacrifices for the government. The only way for me to trust a government is when they build new refineries and maintain the old ones. Before then, they should carry their cross since the mismanged their own share of the petroleum bounty and now they want my own (Subsidy).

TheGoodJoe:
He you can not trust in little things, you can not trust in big things.

The money gotten from the partial Subsidy removal was enough to build at least one Refinery. Why did GEJ not do it? Because, he had no plans for that. Even if he removed Subsidy totally, there would not be any refinery. A thief is a thief.

I stood against Subsidy removal because with all the money in the hands of these thieves, our infrastructure decayed, our reserves depleted and our debt rose despite selling Crude at Astronomical rates. The Subsidy is the only thing the government is forced to do for the people. If you take away that, they will have no reason to do anthing.

gohome:


These numbers here are wrong. Believe at your own peril. I want Tam West to be the Petroleum Minister By May 29th 2015. Then we shall buy PMS at 34 Naira/litre. The US with the most efficient refining and produces 12 Million bbls buy at 1.2 dollars/litre. go figure. I am driving now. I will shred those figures into pieces when I park. That articule is a political article.

atlwireles:
The day Nigerians realise crude oil and its products are commodities, not a social welfare reengineering tool, our problems in this sector will not dissipate.

adanny01:




A government has to earn the peoples trust before the people will make sacrifices for the government. The only way for me to trust a government is when they build new refineries and maintain the old ones. Before then, they should carry their cross since the mismanged their own share of the petroleum bounty and now they want my own (Subsidy).

gohome:





You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

If you continue to pay for subsidy, your kids wont go to school, your medicare will be moribund. No roads, no bridges, no refinery. Your Country can not afford subsidy. You are borrowing money to pay salaries, you military is under funded, you do not have reserves, no infrastructure for food and fuel reserve. You wont last one day in any war.

wirinet:


Believe me, crude oil and its products is a social engineering tool. Countries go to war to control oil fields. There are usually social upheavals in most third world countries that attempts to increase fuel prices.

mbulela:


See the twin problem;

You want them to build refineries before removing subsidy? The country is too broke to afford to build one refinery while paying the subsidy (most of it are outright stolen funds). As i have said elsewhere, the country has never been as broke as it is at present.

On the other side, it will take years to buid a refinery. Doubt it can be done in 6 months.

So how do you wish to continue?

Kx:



I wonder why subsidies are problems only in Nigeria but are serious economic tools in China to stimulate economic activities and resource allocation.

gohome:


It is mathematically impossible to buy PMS below 1 dollar per litre at the current crudeoil price without some form of subsidy

wirinet:


Thanks gohome, your posts are putting some lost glory back to nairaland. Those good old days when we had good intellectual joists. This was before it degenerated to tribal and political "roforofo" fights between Igbos and Yorubas and PDP vs APC.
.

wirinet:


Having said that, i am a firm believer of cheap energy cost, this is because we have abundant energy in africa. As Fela says "energy for Africa... plenty plenty energy for Africa.... Energy for sun, energy for moon, energy for oil..." And i will add energy for Gas, energy for water (hydo), energy for ground (geothermal). We have abundant energy. What we lack is abundant manpower, visionaries, planners. We should not and never buy energy at the same price other continents and countries are buying it. I do not expect Gas to be same same price in Russia as it is in Germany. Russia is even supplying its former USSR countries at subsidized rate.

wirinet:

As I said the problem we have is bad and visionless planner apart for them being corrupt. A good Energy planning can give us an energy mix that is less dependent on petrol and diesel. It is it an irony that year to year our rivers are over flooding and yet we lack hydo power? apart from lacking drinkable and agricultural water. It is a unpardonable that we consume 40 miillion litres of petrol per day, how many cars are actually in Nigeria? We should not be running our homes, industries and offices with diesel and petrol. We should not be transporting manufactured, imported products and even the same fuel with petrol. Every individual should should not be moving around in single cars, motorcycles or tricycles. We need to go back to the drawing board and plan a transport system befitting of a modern state.

wirinet:

That is why i always accuse you of not looking at the big picture. Private investors cannot and would not build refineries unless government promises them "subsidized" crude. Refinery business is not a profitable business, if the crude is bought at international prices. The margins are extremely thin and the capital investments are extremely huge. If i have $2billion, i would rather leave the money in a bank and collect 4 - 5% annually or better still invest in a government bond, than invest it in a refinery.

wirinet:

Now let me let you on a small secret, lots of refineries depend on black market (stolen) crude to make good profit. The Nigerian coast is a beehive of activities for stolen crude. There are foreign agents (lebanese and Europeans) waiting a brief cases of dollars to pay for anyone who can get into international waters with stolen crude. These agent then go on and sell these stolen crude to refineries in Europe and the Americas. Why i am telling you this is to let you know that refinery business is not very profitable business. Government need to maintain the existing refineries and build new one as a social responsibility to Nigerians or in the alternative sign a MOE with investors willing to invest in refineries that they would sell crude to them at "subsidized rates"

wirinet:

Countries use fuel (petrol) as a sort of micro economic tool. Western rich nations use it as a tax instrument to try and reduce social inequalities (poor people hardly buy petrol, it is the rich people that want the luxury of driving cars that buy petrol), while in not so rich countries where the poor needs to buy petrol petrol is made affordable to reduce social inequalities between the rich and poor. Nigeria falls into such a category. In a country where the minimum wage is N18,000 and this minimum wager would need to fuel his "okada", fuel his "i batter pass my neighbour" enter a petrol driven car or bus to work and buy kerosine to cook his beans, asking him to pay international price for fuel is unrealistic.

Empredboy:
Guys, i dnt want to talk as an economist dat i am but as a layman so dat we all will understand dis subsidy matter. Yes there is subsidy but the marketers are eating fat on the subsidy loopholes. Let me give u an exampl; this marketers will import fuel, show it to d NNPC for subsidy collection on what they imported, instead of them taking the fuel to nigeria filling stations they will take it back to outside d country either thru d sea or sell to benin rep people. Yet they sell back to this foreigners in d same price they sell in the international market. So they earn money frm naija govt for what they didnt import n sell back to outside country.
If govt removes subsidy n allow d forces of demand n supply to occur as its done in telecommunication then these criminals will be sent away.

gohome:





You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

If you continue to pay for subsidy, your kids wont go to school, your medicare will be moribund. No roads, no bridges, no refinery. Your Country can not afford subsidy. You are borrowing money to pay salaries, you military is under funded, you do not have reserves, no infrastructure for food and fuel reserve. You wont last one day in any war.

989900:


I've seen the above floating around. Naturally, lighting the house would be the last on the list.

However, can I tell my wife and kids I can't pay the rent, nor school fees, but go binge drinking and patronizing prostitues every night?

OTOH (though of less consideration in this case), fueling the 'Gen', might be paramount if it guarantees our security/safety, or if it powers anything at the office/home that will bring income to pay those rents/fees/debts.

mbulela:

This is the crux of the matter.
As much as I stil lthink we should remove it, this argument is what makes its removal contentious. We have been fooled enough times, even CHANGE will not make me optimistic enough that the money will be used judicously.
On the other hand, the country is broke and cannot afford to pay the subsidy. Forget all this posturing, Nigeria as a country is flat broke.

gohome:


Do you know what your government earn annually? Your budget is 4 Trillion (deficit). Even if binge drinking and patronizing prostitues every night stops, you are flat broke. binge drinking and patronizing prostitues every night and you double that figure to 8 Trillion, you are still flat broke.

In this case, your security lies in building infrastruture (Military, Agriculture, Education). It does not lie in fueling your generator. You have proven that you did not die the last week. You have proven that when the price was almost doubled from 65 naira to 97 naira, you did not die. Infact you bought more cars. Your poorer neighbours are not dead. Do not mortgage you kids future.

wirinet:


Very poor analogy. Why? Because power is critical in modern society.

Now lets go back to your example.
In the example you provided the family cannot survive on N100, they would have to augment their salary in order to meet the basic requirements of a modern family.
Let me use my Family as an example. My children get back from school and lesson around 5PM, they eat and shower, most times my wife would have to switch on the generator to pump water into the overhead tank from the borehole. They take a 30mins rest and start doing their home work, by then it is almost 7 and getting dark. So by 7.30pm the generator would have to be switched on to enable them do their home work. By 8.30 they go to bed, but the weather is usually too hot for them to sleep, so we have to leave the generator on until about 12 midnight to enable them to sleep deep before switching of the generator. Even at that my two youngest children breaks out in heat rashes often and i would have to buy various remedies to help relief the itching.

So whether i like it or not, i spend 500 everyday on fuel just to run my gen for 5 hours everyday.
Now, if you do not provide these basic energy needs for your children, you might end up having disfunctional children.

mandarin:


I don't agree with you sir or ma. If you have 110millionpoor people that you want to take out of poverty, you don't take them out of poverty by making them pay more. For every liter of petrol that sells higher you take more from them but what they need is not spending more but saving more. You are increasing their cost of living and when a tailor who needs to power hie electric sowing machine to sow for cloth for Uche or Sami, they will pay more. Who do you think get richer when more money leaves your country? Those countries where you import, they will have more jobs for their citizens and expand their own economy.My brother, concerted efforts are required to move the economy forward o

mandarin:


I don't agree with you sir or ma. If you have 110millionpoor people that you want to take out of poverty, you don't take them out of poverty by making them pay more. For every liter of petrol that sells higher you take more from them but what they need is not spending more but saving more. You are increasing their cost of living and when a tailor who needs to power hie electric sowing machine to sow for cloth for Uche or Sami, they will pay more. Who do you think get richer when more money leaves your country? Those countries where you import, they will have more jobs for their citizens and expand their own economy.My brother, concerted efforts are required to move the economy forward o

TheGoodJoe:
It is easy to make an argument with countries like Hungary and Netherlands. Why don't we discuss using major Crude Oil producing Natons.

gohome:


Do you know what your government earn annually? Your budget is 4 Trillion (deficit). Even if binge drinking and patronizing prostitues every night stops, you are flat broke. binge drinking and patronizing prostitues every night and you double that figure to 8 Trillion, you are still flat broke.

In this case, your security lies in building infrastruture (Military, Agriculture, Education). It does not lie in fueling your generator. You have proven that you did not die the last week. You have proven that when the price was almost doubled from 65 naira to 97 naira, you did not die. Infact you bought more cars. Your poorer neighbours are not dead. Do not mortgage you kids future.

gohome:


How do kids in Togo sleep?

gohome:


You take people out of poverty by education. 100 million people will remain poor if you do give them access to MDG. You can not do that with using half of your mere 4 Trillion dollars for subsidy. Get your priorities right.