before we make comments, lets try and do a little research to understand why some of this things are the way they are. i don't like this government, but not everything done by them seems corrupt. now let me give you some details why it appears the NNPC and government still talk about Subsidy.

(1) The current Platt price of refined PMS is about $700. i.e 1Metric Tonne = $700. 1metric Tonne = 1,341Liters
(2) 1,341Liters * N145 = N194,445 $700 * 360 (current NAFEX rate) = N252,000
(3) the above means, if petroleum marketers import PMS at $700 per 1MT, they wont even make the cost price let alone any profit. also note that, this price does not include all other operational cost.
(4) since Jan 2018 (to the best of my knowledge) most marketers have not imported PMS. the government/NNPC have been importing and $700 and then sell to the marketers.
(5) they sell to them at about N117/liter (also note, this does not include operational cost.). the loss is the written off.

So the subsidy the government is talking about here, refers to loss they incur in trying to make sure petrol does not exceed N145. no money is paid to any company on like the previous regime.

And let me throw more light on the previous subsidy scam and why it was regarded as a big scam. many oil marketers did not actually import product, but they end up claiming subsidy one way or the other. some will import and send to neighboring country where PMS is not regulated and they will still claim subsidy. since the removal, does kind of company have vanished into thin air.

In summary, the Petrol we buy today is SUBSIDIZED. if the government should scrap "subsidy" we will be paying above N200.
Let's challenge the government to build more refineries and maintain the ones we have. that's the only way out of these mess.

obailala:
This isn't me trying to defend government, as a matter of fact I try as much as possible to keep away from threads like this because any response would be seen as "defending government". But heck! Many years ago, we did come to this forum to gain knowledge. But now the opposite is the case, tribal and political sentiments have eroded every single sensible discussion on the forum. It pains me when I open a thread like this and see everyone purely focused on the political answer instead of the logical true answer.

Several people queried why there still has to be subsidy payments despite oil prices being lower and pump prices higher. The simple answer to that question is the difference in exchange rate between the periods being compared. But little did I know it was a dreaded crime to now say the truth. Obviously if I had just said, "ah, Buhari is a thief, he siphons all the money to his farm," I'm guessing that would have been a more noble and intellectual answer going by the current mood of people in the thread?.. So what if there was someone on the thread who genuinely just wanted to get educated without being involved in the political angle?.. How exactly is my response a crime against humanity?...

You talk of the exchange rate, of course with the amount in the foreign reserves now, the government can crash the exchange rate. But isn't this what so many economists have advised against?... i.e. using foreign reserves to basically control the exchange rate thereby appending an artificially high value to the Naira which consequently affects exports?.. I imagine the government and CBN intentionally have refused to drive the cost of the dollar down to aid local production. In mu opinion, the best way to solve this current crisis is for the government to take a loan and raise new refineries quickly; Nigeria should have no business importing fuel and that is the genesis and revelation of all these problems. But it seems everyone has their arms folded waiting for Dangote refinery.

Anyway, since meaningful discussions are now a taboo on this forum, I'm off the thread!

People are always so quick to project grand plans without looking at the realities on ground.

Nigeria is worse off with this FX regime. In the last 2 years, Canada has become the next haven for the best of our human capital. In the next 5 years, the labour turnover rate will cause a labour crisis. Even Managers in Banks are packing off.

The average Nigerian is too poor to wait for your "Refinery" to land. In as much as foresight and long term thinking is encouraged, if you dont survive the now, how will you fare in the future?

The fastest way to ameliorate the present condition of the average Nigerian right now is to revise the exchange rate but the key reason is why this hasnt been done isnt because of any economic advice.

This foreign exchange regime has remained so because the Nigerian Government prefers to stay liquid at the detriment of its people.

Government revenue is majorly determined by FX rate and Crude oil revenue.

Revising the FX rate will make the FG take a hit on its source of funds to meet its obligation and it is not ready to do that.

This Govt is already addicted to spending over 7 trillion annually.

Jonathan's last budget was 4.2 trillion from 4.9 trillion the previous year. Jonathan preferred to take a hit in govt revenue and maintain living standard for the common man.

If the living conditions of the average Nigerian was bad at 200 Naira to a $, imagine what it is now.

We need a homogenous mix of short, mid and long terms goal.

GMBuhari:
Anybody with an atom of sense would know embarking on a project during recession and dwindling oil prices is suicidal for the nation's economy , not only is the economy still recovering, our main source of income crude oil is cheaper than the refining cost

If you know you know , but like i said , Only anyone who has an atom of sense would compute

wait o…
you're saying that fixing the refineries during the recession would have been SUICIDAL for Nigeria?!
ROFLMFAO!!
you just KILLED me today!!

GMBuhari:
Anybody with an atom of sense would know embarking on a project during recession and dwindling oil prices is suicidal for the nation's economy , not only is the economy still recovering, our main source of income crude oil is cheaper than the refining cost

If you know you know , but like i said , Only anyone who has an atom of sense would compute

look at this fraud star.. See your mouth like our main source of income.. That main source belongs to the Niger delta before you thieves and leeches stepped in .. Nonsense.. You want to tell me the fraudulent activities spare headed by Baru and his gang in the nnpc is not enough to lift the face of our refineries or probably build a new one ??

Reference:


That is your business. But if by the next elections this government has not built any refinery then you will be very silly to criticise any past government for not doing such. The short and sharp answer to failure is performance not the lame excuses you profer. Salaries is now the latest excuse. So dumb. Did Buhari, Baru or Kachikwu tell you they lack the capacity or resources to build refineries with all the recovered funds, rampamt borrowing and 'huge savings' from this and that....

I just asked another almajiri the same question.. All the fraudulent deals being perpetrated by Baru and his guys is not enough to build new refineries ??

Useless lot of sycophant youths we have ..

KratosCorp:
Nope, your answers were nowhere near satisfactory.

1) I don't know where you are getting your current landing cost estimates from. NNPC boss said that the corporation is not a public agency and therefore refused to provide details of their dealings. They also refused to publish the relevant stats on their website. So save me the voodoo high landing cost calculations.

It's written in the main report by the Op.

2) Claims of corruption is not a justification for GOING BACK into government monopolies that has a 100% history of FAILURE. How did we move from splitting the NNPC to giving that same corruption HQ an unregulated monopoly over the most essential commodity in the country? Was it just because buhari is called the minister?

I agree, it's a terrible thing to not be transparent about the workings of NNPC, but I totally disagree with the idea of throwing back the responsibility of fuel importation back to the numerous devilish capitalist crooks that made up the fuel import cabal. If the government is serious, it will definitely be a much easier task for the FG to monitor the actions of just the NNPC (as the sole non-profit fuel importer) than to monitor the actions of the thousands of devourers who swindled Nigeria mercilessly during the subsidy bazaar period.

3) You really sound so clownish with this "no money is paid from the government or NNPC to anyone". In one breath you said that loses are INTENTIONALLY MADE and then COUNTED AS OPERATIONAL COSTS which are then DEDUCTED (about 1 trillion per annum) from the money that should have been paid into the government treasury. Yet, in the same breath you said that "no physical money is being paid to anyone". Obviously, it's either you don't know what money is, or you are just being so irresponsible.

I'm sorry you did not understand the essence of my explanation. When the government wants to spend money in its coffers, there is definitely a need for the NASS reviewing and approving. But in this case, the money doesn't even get to the government's purse at all.

For example, multi-national JVs deduct their 'operating costs' before remitting the government's percentage of the income to government; likewise the NNPC also deducts its operational costs before remitting profits to the FG. In this current case, the explanation given by the NNPC/petroleum ministry is that the losses it made from fuel importation and distribution (at lower cost) is part of its 'operational cost' which it deducts before remitting its overall profits to the FG. This explains why it isn't classed as an expense by the FG which needs appropriation. Now this is the explanation given by the NNPC and not Obailala's explanation, and I am neither hailing the process/procedure as good or bad. The only issue I have is the refusal to throw the books open for all to see. It is left for the NASS to use its powers to change the Act concerning how NNPC deals with the FG.

Finally, Buhari and his cronies are running the NNPC. This same gang of innocent thieves are making unregulated deductions from source while you hail them. Can you imagine your production manager counting unregulated and unverifiable expenditures as operational costs in your factory?

Kindly go back and re-read my post and please point out where Obailala hailed anyone dead or alive?.. That I did not agree with your argument and that I gave a clarification, how exactly does that equate to "hailing government"?

Like I said before, it's a sad development that those in power have continued to run NNPC in secrecy, the very act which was condemned when it was a norm by previous governments. But then, try and purge yourself of anger towards everyone who doesn't totally agree with your position; that anger mixed with political sentiments prevents your from comprehending simple explanations.

chloride6:


People are always so quick to project grand plans without looking at the realities on ground.

Nigeria is worse off with this FX regime. In the last 2 years, Canada has become the next haven for the best of our human capital. In the next 5 years, the labour turnover rate will cause a labour crisis. Even Managers in Banks are packing off.

The average Nigerian is too poor to wait for your "Refinery" to land. In as much as foresight and long term thinking is encouraged, if you dont survive the now, how will you fare in the future?

The fastest way to ameliorate the present condition of the average Nigerian right now is to revise the exchange rate but the key reason is why this hasnt been done isnt because of any economic advice.

This foreign exchange regime has remained so because the Nigerian Government prefers to stay liquid at the detriment of its people.

Government revenue is majorly determined by FX rate and Crude oil revenue.

Revising the FX rate will make the FG take a hit on its source of funds to meet its obligation and it is not ready to do that.

This Govt is already addicted to spending over 7 trillion annually.

Jonathan's last budget was 4.2 trillion from 4.9 trillion the previous year. Jonathan preferred to take a hit in govt revenue and maintain living standard for the common man.

If the living conditions of the average Nigerian was bad at 200 Naira to a $, imagine what it is now.

We need a homogenous mix of short, mid and long terms goal.

Well, this is all up for argument. I'm not an economist, or an expert in economics, I only stated things I believe I read or heard from different sources; people who claimed to be economists argued that the Naira was greatly overvalued at N150/$ for a country that produces next to nothing. Several economists have also deeply criticized the system of the CBN pumping in cheap forex into the market to artificially bolster the value of the Naira; in some quarters it was termed "subsidizing of importation" and it was highlighted as a major factor killing local industries. This argument has been in the airwaves for a long time and they did not originate from me.

I agree with you, things are hard so it makes sense for the government to consider "subsidizing importation", but when you look at it, as long as we don't produce the basic things we consume, there will always be some kind of "subsidizing". It's either the government subsidizes forex for cheap importation of everything (including fuel) and risk killing local production as was the case in the past, or the government subsidizes only fuel as it is trying to do currently to gain more money for it's obligations. But at the end of the day, the money saved by not subsidizing forex is still spent in subsidizing fuel imports and the vicious cycle continues until we freaking get priorities right by fixing refineries.

Anyway, I envy whoever becomes the next president in 2019 when the Dangote refinery and the other about 6 modular refineries currently under construction come to service.

GMBuhari:
Anybody with an atom of sense would know embarking on a project during recession and dwindling oil prices is suicidal for the nation's economy , not only is the economy still recovering, our main source of income crude oil is cheaper than the refining cost

If you know you know , but like i said , Only anyone who has an atom of sense would compute

I don't know where your type comes from, Go read about the Marshall Plan during America Great depression and you will see that government invested more on capital project and cut down on recurrent.


Also Kemi the finance minister jerked up the budget because she wanted government to invest more on Capital project but the problem was that Money was released but no project was executed

fuel subsidy was taboo during the pdp era but now it is legal. God will judge.

And the stealing continues under Mr integrity. We told you guys that these rogues deliberately grounded the refineries so they can rake in their loot from these subsidies. We are truly doomed in this country imagine the obscene amounts these guys are blasting in our ears yet there is no functional solution the government is putting into place to solve this problem only excuses, talk and more useless talk.

Esseite:
GEJ... the closest we had to perfect...

Imagine at $74/b everyone is running around like headless chickens, but GEJ/okonjo controlled it at $100/b and holding dollar below N200, while we slept like babies..

exactly.


No much difference again o

Reference:


Indeed and it is better to have a thief you can catch than a saint you can't.... simple logic. Because I have not seen a man without sin.

Thank you and no one should call him mr integrity

zombieHUNTER:
Did you know that Falana's request for FOI in the daily running of fuel subsidy in NNPC was rejected...

Baru and his 40 thieves said NNPC is not a public institution... Since it's not public then am guessing it's a private property

Do you know that northerners have always headed the NNPC most times even though they don't have any oil in the north... But no southerner has been made the FCT minister ever...

Do you know that Buhari has nothing to offer because he knows nothing about governance and how the economic policies works... He is just a figure head used by Fulani elements to milk the country dry...

The same youths who ought to salvage the country are the ones chanting sai baba like headless chickens because of religious sentiments and ethnic affiliation...

There is no hope for the country.... It's survival of the fittest ...

Ohh,this calls for sober reflection amongst the youth who still have an iota of reasoning in them.

fiizznation:
Whether you want to believe it or dismiss it, the truth still remains the truth. Pushing the PMS price to 100plus per litre by Jonathan before the nationwide strike and protests force him to revert the price to 97pl, is and will continue to be the main cause of the N145pl we are buying PMS today.

Jonathan increased the PMS to N97 when he clearly knew that our very fragile socioeconomic framework cant absorb whatever shock that may arise when the government increases the price of PMS at that time. And that world bank puppet(ngonzi iweala) who tried to deceive the legislatures with her paper logic nonsense was at the forefront of deceiving the not very smart Jonathan in increasing the pms price and "partially" removing the subsidy.

And today you all want to blame buhari because PMS is being sold @ 145 when we all know that Jonathan was the initiator. Talk about ignorance at it's zenith!!!

You my friend Is a lost soul.

lovat:
I don't know where your type comes from, Go read about the Marshall Plan during America Great depression and you will see that government invested more on capital project and cut down on recurrent.


Also Kemi the finance minister jerked up the budget because she wanted government to invest more on Capital project but the problem was that Money was released but no project was executed

The problem i have with people like you is that when anything goes wrong , you are always referencing USA , in age, in wealth , in experience, in loyalty , in dedication, We are literally thousands of years behind USA , cite an example from Africa


You also said someone jerked up the budget which is true , but then you came around to say no project is being executed , what about the ones we are seeing up and down ?

bayelsaowei:
look at this fraud star.. See your mouth like our main source of income.. That main source belongs to the Niger delta before you thieves and leeches stepped in .. Nonsense.. You want to tell me the fraudulent activities spare headed by Baru and his gang in the nnpc is not enough to lift the face of our refineries or probably build a new one ??

Hahahaha , go and fight your ancestors for giving up your oyel to the Oyinbos in exchange for Biscuits and Whiskey, it's a known fact and the story is on internet, typical of ''Awa Oyel'' people , always blaming other people for their own misfortunes , When amalgamation was being discussed why didn't your people fight for independence then ?? Oh wait , they got biscuits and whiskeys , literally shiploads of them hahahaha so stop that ''awa oyel'' something, it belongs to the whole of Nigeria


Also the evidence of fraudulent activities you have should not be spared, just because one aggrieved subsidy fraudster is pained for not getting contracts and he choses to rubbish NNPC , doesn't mean it's true and how much do you think it cost Dangote to build his refinery ??

Please try and comment with sense once in a while , it helps

debaj10:
wait o…
you're saying that fixing the refineries during the recession would have been SUICIDAL for Nigeria?!
ROFLMFAO!!
you just KILLED me today!!

I don't get it , do you people sit down or call each other up and say to yourselves " let's be stupid today" ??

The argument was about Building new refinery , not fixing them

And if you forgot i didn't Refineries were repaired, some up to 80% capacity until Jonathan's private army started bombing pipelines to sabotage Nigeria's economy Stop having selective amnesia and be reasonable for once

Reference:


That is your business. But if by the next elections this government has not built any refinery then you will be very silly to criticise any past government for not doing such. The short and sharp answer to failure is performance not the lame excuses you profer. Salaries is now the latest excuse. So dumb. Did Buhari, Baru or Kachikwu tell you they lack the capacity or resources to build refineries with all the recovered funds, rampamt borrowing and 'huge savings' from this and that

It's like you said , that's your business

Investors took their money and left


bwahahahahahahahaha

lol

dometome:
you also forgot that it took the paedophile A solid six months to appoint ministers, then there was a heavy capital flight, because investors took their money and left.

GMBuhari:


Hahahaha , go and fight your ancestors for giving up your oyel to the Oyinbos in exchange for Biscuits and Whiskey, it's a known fact and the story is on internet, typical of ''Awa Oyel'' people , always blaming other people for their own misfortunes , When amalgamation was being discussed why didn't your people fight for independence then ?? Oh wait , they got biscuits and whiskeys , literally shiploads of them hahahaha so stop that ''awa oyel'' something, it belongs to the whole of Nigeria


Also the evidence of fraudulent activities you have should not be spared, just because one aggrieved subsidy fraudster is pained for not getting contracts and he choses to rubbish NNPC , doesn't mean it's true and how much do you think it cost Dangote to build his refinery ??

Please try and comment with sense once in a while , it helps

I believe you were one of the kids here who cheered our grand pa of a president to descend on the Niger delta only for the weakling to come back begging and paying militants..

Very soon the Niger delta would rise up fully to attain resource control whilst you leeches are thrown out on the streets selling suya and begging lIke the freaking almajiris you all are..

Because the nnpc is been controlled by thief buhari all allegations against it is now false? Right?

Nonsense

obailala:
Several people on this thread asked why subsidy is still paid despite the fact that the pump price is now N145 and oil prices is lower than what it was 5 years ago. I gave the simple answer to that question being that the exchange rate is now twice what it was 5 years ago. I hope you understood the answer I gave regarding how the exchange rate infulences landing costs?

Then with that aside, talking of corruption, it is common knowledge that there was massive corruption in the way subsidies were paid to every Tom, Dickk and Harry for both fuel imported and not imported alike. NOI talked about it, Sanusi talked about it, GEJ talked about it and proferred a solution which was to end subsidy payments completely in 2012... The system is obviously now more controlled (or more controllable) as only the NNPC now does the importation. I can't speak for anyone about the secracy in providing full details of the current payments or passing it through the NASS though.

on the contrary, the system is actually now more corrupt because there is restricted access to information.


when every tom, dick & harry was importing, it was open & easier to catch the frauds among them over time & Nigerians also had a rough idea of the quantity of PMS coming in.


today, Nigerians have less access to information about the PMS transactions going on. today, baru says we consume 30m litres of PMS, tomorrow he wakes up to say its 40m, later in the evening he says its 60m...

who is verifying these claims? right now, no one...

Lol, 60 years or more

bayelsaowei:
I believe you were one of the kids here who cheered our grand pa of a president to descend on the Niger delta only for the weakling to come back begging and paying militants..

Very soon the Niger delta would rise up fully to attain resource control whilst you leeches are thrown out on the streets selling suya and begging lIke the freaking almajiris you all are..

Because the nnpc is been controlled by thief buhari all allegations against it is now false? Right?

Nonsense