subsidywise18:


Nowhere awful

This is happening because Nigerians insist on selling something at N165 , which costs N300 and above to refine. (even if we refined all our petrol at home, even if Dangote started refining).

NNPC gets paid something called a subsidy to keep it from collapsing under the contradiction. That subsidy has been hard to maintain for over 30 years now, because, unlike other countries, we pay for it from oil revenue (and thanks to higher crude prices, and higher prices of petrol as a result, the subsidy has grown so large that it is eating into government revenues.).

We have been told, several times, since 1993 , and even earlier to remove this thing called a subsidy. But since most of us think that it is better, it remains, and it drains our economy. It is also a big reason why domestic refining, until recently...is in a bad state here.

All this will end if subsidy goes. But because it means that fuel would cost above N350....and since we are too 'poor' to pay it, we keep on keeping it. At our expense.

Modified

Bloomberg has a report on one of the negative aspects of subsidy'. For those quoting me, I suggest you Google for it.

Alcoron:
Buhari's FG removed fuel subsidy already.

Agent8706:
When I saw the queue on my way to church this morning, the thoughts of what man went through last month just to get fuel got me wondering what we have done wrong in this country to deserve this punishment...God please pardon us if we wrong you in anyway. Please don't give us another Buhari Pro Max come next year!

subsidywise18:


Nowhere awful

This is happening because Nigerians insist on selling something at N165 , which costs N300 and above to refine. (even if we refined all our petrol at home, even if Dangote started refining).

NNPC gets paid something called a subsidy to keep it from collapsing under the contradiction. That subsidy has been hard to maintain for over 30 years now, because, unlike other countries, we pay for it from oil revenue (and thanks to higher crude prices, and higher prices of petrol as a result, the subsidy has grown so large that it is eating into government revenues.).

We have been told, several times, since 1993 , and even earlier to remove this thing called a subsidy. But since most of us think that it is better, it remains, and it drains our economy. It is also a big reason why domestic refining, until recently...is in a bad state here.

All this will end if subsidy goes. But because it means that fuel would cost above N350....and since we are too 'poor' to pay it, we keep on keeping it. At our expense.

Modified

Bloomberg has a report on one of the negative aspects of subsidy'. For those quoting me, I suggest you Google for it.

subsidywise18:


Nowhere awful

This is happening because Nigerians insist on selling something at N165 , which costs N300 and above to refine. (even if we refined all our petrol at home, even if Dangote started refining).

NNPC gets paid something called a subsidy to keep it from collapsing under the contradiction. That subsidy has been hard to maintain for over 30 years now, because, unlike other countries, we pay for it from oil revenue (and thanks to higher crude prices, and higher prices of petrol as a result, the subsidy has grown so large that it is eating into government revenues.).

We have been told, several times, since 1993 , and even earlier to remove this thing called a subsidy. But since most of us think that it is better, it remains, and it drains our economy. It is also a big reason why domestic refining, until recently...is in a bad state here.

All this will end if subsidy goes. But because it means that fuel would cost above N350....and since we are too 'poor' to pay it, we keep on keeping it. At our expense.

Modified

Bloomberg has a report on one of the negative aspects of subsidy'. For those quoting me, I suggest you Google for it.

loswhite:
Go and advise your foolish Government. Majority of the consumption is to power Generators. Bloomberg should advise them to fix the power sector

OGraffix:
Fake news

subsidywise18:


Nowhere awful

This is happening because Nigerians insist on selling something at N165 , which costs N300 and above to refine. (even if we refined all our petrol at home, even if Dangote started refining).

NNPC gets paid something called a subsidy to keep it from collapsing under the contradiction. That subsidy has been hard to maintain for over 30 years now, because, unlike other countries, we pay for it from oil revenue (and thanks to higher crude prices, and higher prices of petrol as a result, the subsidy has grown so large that it is eating into government revenues.).

We have been told, several times, since 1993 , and even earlier to remove this thing called a subsidy. But since most of us think that it is better, it remains, and it drains our economy. It is also a big reason why domestic refining, until recently...is in a bad state here.

All this will end if subsidy goes. But because it means that fuel would cost above N350....and since we are too 'poor' to pay it, we keep on keeping it. At our expense.

Modified

Bloomberg has a report on one of the negative aspects of subsidy'. For those quoting me, I suggest you Google for it.

subsidywise18:


Nowhere awful

This is happening because Nigerians insist on selling something at N165 , which costs N300 and above to refine. (even if we refined all our petrol at home, even if Dangote started refining).

NNPC gets paid something called a subsidy to keep it from collapsing under the contradiction. That subsidy has been hard to maintain for over 30 years now, because, unlike other countries, we pay for it from oil revenue (and thanks to higher crude prices, and higher prices of petrol as a result, the subsidy has grown so large that it is eating into government revenues.).

We have been told, several times, since 1993 , and even earlier to remove this thing called a subsidy. But since most of us think that it is better, it remains, and it drains our economy. It is also a big reason why domestic refining, until recently...is in a bad state here.

All this will end if subsidy goes. But because it means that fuel would cost above N350....and since we are too 'poor' to pay it, we keep on keeping it. At our expense.

Modified

Bloomberg has a report on one of the negative aspects of subsidy'. For those quoting me, I suggest you Google for it.

subsidywise18:


Well the Bihari government agrees with you that subsidy should stay.

People like me are in the minority.

ivandragon:


You made a point, but the reality is that cost of production is not the only thing affecting the price of PMS in Nigeria.

The monetary & fiscal policies of government also play a key role. For instance, if the government had better policies & the exchange rate was, say, about #100 to a dollar, would fuel still need to sell at #400 pl?

There are so many other factors in play which is directly as a result of poor governance & insincere application of the deregulation policy.

If you tie your argument to just the removal of subsidy as you presently posit,then there will be no end to subsidy because the price will keep rising unchecked, ala, diesel, kero & jetfuel, & businessmen would still have challenges of accessing FX.

What is needed is better resources management & blocking areas of leakage...

subsidywise18:


The subsidy is an example of that monetary mismanagement that you speak of.

If we want to pay subsidy then raise Nigeria tax to GDP ratio and pay it from tax revenue not from crude oil.

We are throwing away 4 trillion this year. For nothing.

loswhite:
They should have removed the subsidy in 2012 but the issue goes beyond subsidy. The Elites are sabotaging the country.

ivandragon:



Why increase tax to GDP ratio for majority of the people who are already poorly paid? Rather than increase, why not expand the tax bracket to capture those who do not contribute to it?

How can the government pay hundreds of billions to an unproductive populace who use same funds frivolously...

Mind you, an estimated #4trn is embezzled yearly in Nigeria , https://punchng.com/the-582bn-stolen-from-nigeria-since-independence/ (using exch. rate of #400)

Subsidy, if the proper loop holes are blocked & economy better managed, is not a bad thing & van actually be sustained if needed...

The US subsidised oil derived products to the tune of over $500b in 2017; China subsided same products, same period to the tune of about $1.4trn... I used these countries because the argument has often been population difference...

In fact, global oil subsidises were over $5trn in 2020 (Nigeria contributed less than $4bn to that amount).

So, please let's not kid ourselves, almost every country subsidises fossil fuels, it is how they are able to manage the inherent corruption, utilise scarce resources & manage the economy that differs.

subsidywise18:


US and China

1. Have higher tax to GDP ratios than Nigeria

2.Source funds for subsidy from their tax revenue not from oyel revenue

3. Don't subsidise everyone

4. We are spending more and more money on subsidy because the price of oil is driving up the price of petrol and cost of subsidy

Either we face reality or we keep pouring money down a bottomless pit for nothing

ivandragon:


1. First, expand the tax bracket, then introduce more luxury taxes.

2. Whatever the source, money is being used from somewhere to subsidise, which means better monetary management.

3. They do subsidise everyone. It is fossil fuel.

4. Work on the monetary policy to have more favourable exchange rate to the dollar. You cannot almost destroy the economy & still seek to inflict more harm on the citizen

The reality is that the problem is not the subsidy per se, it is the mismanagement & corruption that makes subsidy seem so burdensome.

subsidywise18:


Is what I am sayin. That's how you get money to fund subsidy, not by spending limited oil money that rises and falls based on oil price.

But saying it on this site gets one abused. We have a low tax to gdp ratio. People in this country don't want to accept that reality.



https://www.google.com/url?q=https://www.imf.org/en/Topics/climate-change/energy-subsidies&sa=U&ved=2ahUKEwjz393rmNT3AhV8QkEAHfC7Ar8QFnoECAgQAg&usg=AOvVaw34nsMyP_hwgJY8yRrEAhFF

https://www.google.com/url?q=https://www.brookings.edu/research/reforming-global-fossil-fuel-subsidies-how-the-united-states-can-restart-international-cooperation/&sa=U&ved=2ahUKEwjz393rmNT3AhV8QkEAHfC7Ar8QFnoECAMQAg&usg=AOvVaw0GWoT68GC7ISfOF8pvBPfr


You keep putting the cart before the horse. Even if you remove subsidises on PMS, if the system is messed up, what do you think happens?

The focus of your subsidy removal is on price, but have you looked at how a reduced exchange rate differential would also help reduce the subsidy paid?

Removal of subsidy would be productive only if the system becomes more accountable & not vice versa.

Imagine a system that cannot do a proper check of products it imports by itself, how much more would it be efficient when there are hundreds of other players in the industry importing?

Just look at the associated costs attached to pms distribution in Nigeria. Reviewing that alone would shave off around 40% of the present subsidises...

Bottom line is that you cannot fix a sewage when switching is still flowing down the pipe... you must first stop the shot from flowing, or else, your attempts to fix the sewage would be, well, a waste...lol.



At the expense of more refineries, and more investment in the sector.

Because of subsidy, we can't have domestic refineries/sufficient domestic refining...because it is not profitable to refine fuel at home.. Even the private ones coming up are at risk because subsidy means losses...which makes it difficult to keep up refineries (and this is one of the reasons why NNPC refineries depreciated...and the same thing happened in Venezuela which subsidizes fuel so that it costs equivalent of N40 per liter...and in over 20 years saw its largest refinery go from refining 900000 barrels to 100000 barrels )

Finally we are losing billions of naira because people big and small smuggle fuel out of this country....because in all our neighbours fuel costs over N300 , sometimes N400. Venezuela too is losing 18 billion dollars annually to fuel smuggling...because all its neighbours have higher prices of fuel, and some enterprising person, even one with an IQ of 50 , is going to put two and two together and make four....

I mean, why refine fuel, when after refining it for over N300 per liter, NNPC comes and tells me to sell it at N160 and pays a subsidy that does not cover my resulting loss?

Power and petrol have one thing in common...they are subsidsied. And they lose money...and cannot pay for improvements. GSM is not subsidised, they even used to charge us N10000 for a sim (at one point in 2002, the entitiy that is now Airtel was charging N20000 for a 'welcome package' !)..and as a result we have home internet and can call international from our house.



No they do not. If they did, their refineries won't make a profit, and will all collapse. Fuel costs N502 in the USA. If they kicked it down to N160 per liter like we do here, they won't have any refineries left. (and that we even can somehow afford ,....and that is with a heavy caveat....to subsidise fuel here is because we refine it in substandard refineries abroad. )

Subsides in the USA are for the poorest of the poor. Not for rich and middle class anyway. Other countries (eg Japan) subsidse , but on a temporary basis.



Yes, and it starts by removing subsides so that eventually we have more dollars flowing in in investments...since people would now be able to refine fuel at a profit, not at a loss....and more jobs. YES....fuel would be expensive...but then again, people in poorer countries pay more for the stuff.

Niger has a working refinery. Niger is poorer than we are. Yet they pay N350 per liter for PMS....and their refinery makes enough of a profit to run well, and they can export. Nigeria subsides its refineries to oblivion.




Yes, because when you tell someone that he or she cannot make a profit, and when you have free government money flowing around, corruption is going to result. That's how communist countries failed...they subsidsied everything...and as a result people started doing sharp practice to get rich.

I mean, we are telling people that they must import fuel at N300 and above, sell it at N160...and pay a subsidy that barely covers the loss, and does not allow for profit. Natrually, there would be lies and false claims...because in some instances, you need enough money to run a company efficently. NNPC has not made a profit in decades, and has spent all the fuel earnings on subsidy. It is a monster, and even if we fight corruption...subsidy demands more and more and more money.

Remove susbsides. We can't keep on pretending.

subsidywise18:


Is what I am sayin. That's how you get money to fund subsidy, not by spending limited oil money that rises and falls based on oil price.

But saying it on this site gets one abused. We have a low tax to gdp ratio. People in this country don't want to accept that reality.



https://www.google.com/url?q=https://www.imf.org/en/Topics/climate-change/energy-subsidies&sa=U&ved=2ahUKEwjz393rmNT3AhV8QkEAHfC7Ar8QFnoECAgQAg&usg=AOvVaw34nsMyP_hwgJY8yRrEAhFF

https://www.google.com/url?q=https://www.brookings.edu/research/reforming-global-fossil-fuel-subsidies-how-the-united-states-can-restart-international-cooperation/&sa=U&ved=2ahUKEwjz393rmNT3AhV8QkEAHfC7Ar8QFnoECAMQAg&usg=AOvVaw0GWoT68GC7ISfOF8pvBPfr





At the expense of more refineries, and more investment in the sector.

Because of subsidy, we can't have domestic refineries/sufficient domestic refining...because it is not profitable to refine fuel at home.. Even the private ones coming up are at risk because subsidy means losses...which makes it difficult to keep up refineries (and this is one of the reasons why NNPC refineries depreciated...and the same thing happened in Venezuela which subsidizes fuel so that it costs equivalent of N40 per liter...and in over 20 years saw its largest refinery go from refining 900000 barrels to 100000 barrels )

Finally we are losing billions of naira because people big and small smuggle fuel out of this country....because in all our neighbours fuel costs over N300 , sometimes N400. Venezuela too is losing 18 billion dollars annually to fuel smuggling...because all its neighbours have higher prices of fuel, and some enterprising person, even one with an IQ of 50 , is going to put two and two together and make four....

I mean, why refine fuel, when after refining it for over N300 per liter, NNPC comes and tells me to sell it at N160 and pays a subsidy that does not cover my resulting loss?

Power and petrol have one thing in common...they are subsidsied. And they lose money...and cannot pay for improvements. GSM is not subsidised, they even used to charge us N10000 for a sim (at one point in 2002, the entitiy that is now Airtel was charging N20000 for a 'welcome package' !)..and as a result we have home internet and can call international from our house.



No they do not. If they did, their refineries won't make a profit, and will all collapse. Fuel costs N502 in the USA. If they kicked it down to N160 per liter like we do here, they won't have any refineries left. (and that we even can somehow afford ,....and that is with a heavy caveat....to subsidise fuel here is because we refine it in substandard refineries abroad. )

Subsides in the USA are for the poorest of the poor. Not for rich and middle class anyway. Other countries (eg Japan) subsidse , but on a temporary basis.



Yes, and it starts by removing subsides so that eventually we have more dollars flowing in in investments...since people would now be able to refine fuel at a profit, not at a loss....and more jobs. YES....fuel would be expensive...but then again, people in poorer countries pay more for the stuff.

Niger has a working refinery. Niger is poorer than we are. Yet they pay N350 per liter for PMS....and their refinery makes enough of a profit to run well, and they can export. Nigeria subsides its refineries to oblivion.




Yes, because when you tell someone that he or she cannot make a profit, and when you have free government money flowing around, corruption is going to result. That's how communist countries failed...they subsidsied everything...and as a result people started doing sharp practice to get rich.

I mean, we are telling people that they must import fuel at N300 and above, sell it at N160...and pay a subsidy that barely covers the loss, and does not allow for profit. Natrually, there would be lies and false claims...because in some instances, you need enough money to run a company efficently. NNPC has not made a profit in decades, and has spent all the fuel earnings on subsidy. It is a monster, and even if we fight corruption...subsidy demands more and more and more money.

Remove susbsides. We can't keep on pretending.

qekng40:
Nice one