The Federal Government now incurs about N1.69bn daily to subsidise petrol consumption,



Nigeria currently spends N1.69bn daily as subsidy on petrol despite the decline in the country’s oil exports and the resultant squeeze on the nation’s revenues.

While industry experts and highly placed politicians canvass the stoppage of the subsidy regime, President Muhammadu Buhari has yet to take a stand on the issue.[/b]

Buhari had last Monday explained that he had yet to take a decision on the removal of subsidies on refined petroleum products.

The President, in a statement by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, was quoted as saying, “I have received many literature on the need to remove subsidies, but much of it has no depth. When you touch the price of petroleum products, that has the effect of triggering price rise on transportation, food and rents.

“That is for those who earn salaries; but there are many who are jobless and will be affected by it.”

Subsidy is a form of financial aid or support extended to an institution, business, or individual generally with the aim of promoting economic and social policy.

But experts told our correspondent that the President was considering the political gains of subsidy, and stressed that this was detrimental to Nigeria’s economy, considering the whopping sum being spent daily subsidising petrol consumption.

Latest figures from the Petroleum Products Pricing Regulatory Agency show that the government is paying N42.35 as subsidy on every litre of petrol consumed in the country.

Specifically, the agency, in its pricing template released on Thursday July 16, 2015, which was based on average Platts prices for a day before, stated that the Expected Open Market Price or total cost of petrol was N129.35 per litre.

This is against a regulated retail price of N87 per litre. The difference between the EOMP and the retail price is, therefore, N42.35.

According to the Nigerian National Petroleum Corporation, the country consumes about 40 million litres of Petrol daily.

By multiplying the volume of petrol consumed across the country on a daily basis with the current amount spent on subsidising the product, it means that the government spends about N1.69bn on subsidy daily at N42.35 per litre.

The PPPRA stated that the effective date of the approved pricing template was January 19, 2015, noting that the actual landing cost of the product was N113.86 per litre.

The cost elements that make up the landing cost include the product’s offshore cost of N102.6 per litre; trade margin, N1.47; lightering expenses, N4.18; NPA fee, N0.77; financing, N1.59; jetty depot throughput charge, N0.8; and storage charge, N3.

On the product’s distribution margin, retailers get N4.6; transporters, N2.99; dealers, N1.75; bridging fund, N5.85; marine transport average, N0.15; and admin charge, N0.15; making a subtotal margin of N15.49.

When added to the landing cost of N113.86, the EOMP of N129.35 per litre is arrived at, but the product is sold at filling stations at N87 per litre.

The Director, Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, explained that the plunge in crude oil prices and the drop in Nigeria’s oil exports had led to a stiff revenue squeeze and wondered if the Federal Government would be able to sustain the billions of naira being incurred daily as subsidy.

Iledare, who is a former President, International Association for Energy Economics, said, “We cannot continue to subsidise petrol without having functional refineries. Other countries that subsidise petrol like Saudi Arabia and Venezuela have refining capacities beyond what they consume. If we refine all we consume and sell excess, nobody will call for subsidy removal. But we don’t.

“It may make political sense and the only thing they are worried about is the political implication. But this is where they have to educate the society that what they are losing as a result of fuel subsidy is enormous. These are monies that can be used to increase Nigeria’s education standard.”

Also speaking on the issue, the Managing Director, Frontier Oil Limited, an oil and gas field development firm, Mr. Thomas Dada, told our correspondent that the price of crude oil would fall further in the near future, judging by the recent historic deal between Iran and the United States.

Dada said, “I hope the President will be able to assess the issue in detail maybe when he has formed his cabinet. But I think sooner or later, we have to remove subsidy because it has never benefitted this nation but only a few people.

“Let me ask you a question, how many people are buying fuel at N87 per litre right now in this country? If you go to Abia, Niger or Adamawa states, they pay much more than N87 per litre and these are Nigerians paying this much because they need the product. So, who is actually benefitting from subsidy? He (Buhari) may have his reasons but we need to look at the bigger picture.

“Is the telecoms sector being subsidised? No. Is it not functioning? It is functioning! The coffers of the government are empty; so, I don’t know how you are going to sustain subsidy. Oil price is going to drop with Iran and the USA coming to a nuclear agreement. That means if we don’t see a $40 per barrel oil price by next year or two, then we are lucky.

“So, how will Nigeria continue to afford subsidy? We should be encouraging private sector refineries, which will be able to meet our petroleum product needs.”

The Governor of Kaduna State, Mallam Nasir El-Rufai, at a function in Abuja last week, urged Nigerians to unite against the continued payment of subsidy, stressing that it was only making a few persons wealthy at the expense of the masses.

He had said, “In 2014, Nigeria was producing on the average about 2.2 million barrels of crude oil per day, while importing most of its daily consumption of 43.5 million litres of refined petroleum products. That reliance on imports of refined products has seen unsustainable expenses on questionable subsidy payments exemplified by $8.99bn in the 18 months between January 2012 and June 2013.

“About N971bn was budgeted for subsidy payments in 2014 alone (more than twice that was eventually paid). You all recall how trillions of naira were paid out as oil subsidy in 2011, when only N254bn was appropriated. No one has been successfully prosecuted for this scam.

“I daresay that the oil subsidy regime has neither grown our people nor guaranteed stability of refined product supplies. What subsidy has achieved is create a huge hole in the budget and a new array of overnight billionaires… “It is time to tackle the corruption in the subsidy regime. We can discuss how the resulting subsidy savings will be spent to improve lives, while guaranteeing stability of supply to the domestic market. We have a President with both the integrity to responsibly manage the savings and the experience of managing special interventions based on subsidy savings.”



http://www.punchng.com/business/financial-punch/petrol-subsidy-hits-n1-69bn-daily/

Is Nigeria really on auto-pilot?

Nigerian government is subsidizing our petrol with N42.35 per litre, expecting us to buy at N87 per litre.

Unfortunately you can’t get the fuel at the official pump price of N87 and yet we are still paying subsidy every day?

Who are this wicked cabals?

[size=18pt]
Why is the government of Change under Buhari keeping silent since May 29th?[/size]

If the official price is N87 per litre and we are buying fuel at N110 per litre, and Nigerians consume 40 million litres of Petrol daily see the computations below:

See the loss to Nigerians since President M Buhari took over:

Official Price 87/L

- You are buying at 110/L

- You are paying additional (87-110) = (23)/L

- Nigeria daily fuel consumption is 40 Million litres (40MM x 23) = 920 Million loss every day.

Buari days in office now 51 Days.

51 Days x 92 Million Naira daily loss



Total loss to Nigerians under Mohamodu Buhari is now 46 Billion Naira, excluding the official subsidy of 1.6 Billion Naira daily.


Na so we go dey?

I do not know what subsidy means - Buhari

Who is subsidizing who - Buhari

Subsidy will be removed - Buhari

We will not remove subsidy - Buhari



What a confused government! SmH!


Modified:

Bros firefire, abeg correct that calculation.. 51 x 920 = NGN 46,920,000,000 = NGN 46.92Billion loss excluding subsidy (you have to either write it like this or you approximate to NGN 47Billion because the NGN 920Million you omitted is almost NGN 1Billion)

Thank you..

The messiah is holidaying in the US of A.

But they told us subsidy is/was a scam when they were campaigning so what changed


I guess they just used the subsidy issue to play on the emotion of nigerians to get votes...SMH

francizy:


I do not know what subsidy means - Buhari

Who is subsidizing who - Buhari

Subsidy will be removed - Buhari

We will not remove subsidy - Buhari



What a confused government! SmH!

The confusion no be here, it seems they knew the truth but they rather choose to play on the emotions of nigerians to get elected and they succeeded...SMH

Subsidy is a very dicy matter that needs to be analysized totally and handled with care.
Removing subsidy is the ultimate end.
Prior to doing that certain measures must be put in place to avoid all the foreseen calamities that will follow its unplanned removal and those measures are what needs to be in place.
With our refineries functioning as well as government building new ones along side the need to encourage private refineries to help saturate the market with products, we can overcome all the fears.
On a deeper analysis, subsidy will still be with us for a while as any drastic action to remove it without thorough plans for Nigerians will be worse than paying this sum. We have been paying subsidy since since OBJ and the govt has to look into it seriously too to prevent people getting paid for not doing or supplying products which is like a norm in that sector with marketers.

Okay. Pardon me I didn't read the article. But from the tone of the op and knowing his political leanings, I can rightly guess the figure represents an increase from what it used to be.

A little math here wouldn't hurt I suppose.

If we are spending approximately N1.6b daily, it means we would spend N584billion by the end of the year.

Now, since this represents an upsurge, it means we must have been paying less in the past, yet Jonathan spent over N2.0trillion on the same item in 1year!!

....And they call him a hero.

That dude is a freaking Ali Baba!! We know who the other 40 ##ieves are.

.

The rich are getting richer & the poor ?

crownwealth:
The rich are getting richer & the poor ?

The poor are here on nl defending the rich

omenka:
Okay. Pardon me I didn't read the article. But from the tone of the op and knowing his political leanings, I can rightly guess the figure represents an increase from what it used to be.

A little math here wouldn't hurt I suppose.

If we are spending approximately N1.6b daily, it means we would spend N584billion by the end of the year.

Now, since this represents an upsurge, it means we must have been paying less in the past, yet Jonathan spent over N2.0trillion on the same item in 1year!!

....And they call him a hero.

That dude is a freaking Ali Baba!! We know who the other 40 ##ieves are.

To think You didn't even read the article but had to rush first to defend your pay.smh
I give up on your case

it's all good...
LETS KEEP DECEIVING OURSELVES!

Rose2014:


To think You didn't even read the article but had to rush first to defend your pay.smh
I give up on your case

Must everyone be paid to support the President? Are you paid to malign the President?

NIGERIANS...WE KNOW WHAT OUR PROBLEM IS; BUT, WILL NEVER COME AROUND TO SOLVING IT...
WHY??
COS WE HATE THE TRUTH!!

Yet a litter is sold for #105

Dear Wailing wailers

Calm down. Baba is coming for subsidy!!!

If Buhari's Government spends approximately N1.6b daily, it means we would spend N584billion by the end of the year.

Jonathan spent over N2.0trillion on subsidy in 1 year!!!!!

Stinking Hypocrisy of the wailers!!!!

8 more years to go at least........

Rose2014:


To think You didn't even read the article but had to rush first to defend your pay.smh
I give up on your case

Oh please shut it. I was honest enough to admit it and after reading, I saw I wasn't even wrong. If they say a figure has hit xyz as stated in the topic, you should understand there's been an increase and nothing more, except you have serious problems understanding english.

Rose2014:


To think You didn't even read the article but had to rush first to defend your pay.smh
I give up on your case

Ah, this coming from the moniker who believe because Dasuki was NSA he should have caches of military grade high calibre rifles.

This is bloody marvelous!.

I thought the APC leadership said Fuel subsidy is scam Something that has been in existence since the 80s.
GEJ tried his best to remove subsidy but was frastrated by Oil Cartels, who took advantage of ignorant Nigerians to protest against it. Today everyone is paying the consequences. Imagine the gain and economic boost Nigeria would have experienced between the periods of 2012 and 2015 had the subsidy been removed. Prices of petroleum products would have reflected international price today.
As it is now going by the President's body language and predisposition to socialism, subsidy of petroleum products will not be removed.

omenka:
Okay. Pardon me I didn't read the article. But from the tone of the op and knowing his political leanings, I can rightly guess the figure represents an increase from what it used to be.

A little math here wouldn't hurt I suppose.

If we are spending approximately N1.6b daily, it means we would spend N584billion by the end of the year.

Now, since this represents an upsurge, it means we must have been paying less in the past, yet Jonathan spent over N2.0trillion on the same item in 1year!!

....And they call him a hero.

That dude is a freaking Ali Baba!! We know who the other 40 ##ieves are.

Brow, please check out the price of crude during Jonathan regime and now. The landing cost was far higher during Jonathan regime and now.

Hmm

This. Money will help me 4 life..

Dullardo at work

Yeeehh Buhari....
I know you are clueless but continue

juventino:



Brow, please check out the price of crude during Jonathan regime and now. The landing cost was far higher during Jonathan regime and now.

Bro, the budgeted amount under Jonathan was about N380billion. Even if the landing cost doubled, we should have been looking at about N800billion but we are talking about N2trillion!! Haba, that is over 5 times the actual amount budgeted.

Make una fear God oo.

There is ntin like subsidy - Buhari before election.




We cannot remove subsidy - after the election -Pres. Buhari.



Which way Nigeria?


ThefakeStan

The earlier we remove this subsidy the better for all Nigerians. But before this, things must be in place to cushion the initial effect on the citizens.