Delafruita:

In a situation where we have good leaders who have the welfare of the citizenry at heart,then we can remove subsidy.but as it is,subsidy is the only thing ordinary folks like me see as benefit from the government.

Really?  And when the oil runs out where would you get the subsidy from?  Niger Republic?

Delafruita:

In a situation where we have good leaders who have the welfare of the citizenry at heart,then we can remove subsidy.but as it is,subsidy is the only thing ordinary folks like me see as benefit from the government.

I doubt if we are actually benefitting from subsidy because there is none.We still buy petroleum products thrice the subsidized price and the subsidy still paid to the marketers.Who are we fooling but ourselves.My only problem with it is the functionality of the refineries.If we remove subsidy without functioning refineries,the capital flight continues.

[size=8pt][size=8pt]Nigeria has an installed crude refining capacity of 445,000 barrels per day but the refining output is insignificant when compared to the national demand.[/size][/size]

If the statement above from the original write up is true, then Nigeria's refineries installed capacity is enough to serve our daily need if they are working at capacity. Since from the original write up we consume 32million litres a day, from calculation, one barrel of crude yields approximately 73.8 litres of gasoline (minus other derivatives). It then follows that we need 433,604.33 barrels refining capacity. So if GEJ is serious about this, then our refineries must work first, then remove the subsidy. If he is not able to make these refineries work, I wonder why we are talking about all this subsidy thing.

And if we consume 32million litres a day, do we import the whole 32million litres, if not the subsidy amount calculated above is incorrect.

I like subsidy to be removed but when we still import the whole thing (if the write up is correct), this will amount to a serious pain on most Nigerians and it will be very difficult to curtail or control inflation.

N18,000 is the minimum wage
A BRT bus ride in Lagos is about N150. Say the person lives in Ojodu and works in Lagos Island
N300 daily and N6,600 = 22 working days
We assume he does not go out at all over the weekends
Rent (of a room) is about N2,000
precipitate = N8,600
Assume he spends N300 daily on feeding. In 30 days, that is N9,000
This is N17,600

Now this guy must not fall sick and he can only spend N400 monthly
on clothing, electricity, gas (kerosene?), entertainment of his gf etc

Oh, he must be a bachelor and no dependent relative

If we increase fuel price, by how much will the figures above increase?

BTW, Obasanjo increased fuel price (removed subsidy) several times from N20 to N65
What happened?

Abagworo:


I doubt if we are actually benefitting from subsidy because there is none.We still buy petroleum products thrice the subsidized price and the subsidy still paid to the marketers.Who are we fooling but ourselves.My only problem with it is the functionality of the refineries.If we remove subsidy without functioning refineries,the capital flight continues.

That is why it has to be a gradual process.  At least one refinery to be built every year the management of which should be in private hands, and a phased removal of the subsidy, otherwise we would continue to see our precious foreign reserves drain away to the Niger Republic and other countries, and keep people in jobs there instead of in our country.   I don't think all this takes a Phd in Economics.  It's all really a matter of common sense, a thing which unfortunately our leaders seem to have in very short supply.

I strongly agree with "seal777" , removing subsidy wont be a problem , i believe Nigerian can cope and will adjust, remember obasanjo increased fuel price from N20 to N80 thereafter prices of things went up but we survived. Removing fuel subsidy without 24hr power supply ,functioning local refinery and construction of new refineries will amount to nothing. Otherwise the corrupt politicians will continue feed fat on us. Madam ngozi mean well for Nigeria but she should not forget that she is surrounded by wolf (politician, business men, the rich etc) that are waiting to devour our treasure at the slightest policy somersault. Remember these guys has refineries outside the country and engaged in diversion and bunkering of petroleum product.

are we still discussing nigeria, do we not think its time to give up on the leaderless, focus-less, disunited, useless entity?

mtts! My country men, you complain quite alot. I pity U. why don't you keep quiet & enjoy ur umbrella with GEj on e pilot? $500 to e friends of e big umbrella monthly is 2 small safe. since we chose tribal and religious affiliations inplace of merit & credence, why not -I mean - why not $6bn leakage in one sector alone. rmbr e umbrella is to spin over ur heads for only 50 years or maybe more. may The Almighty guide us right.

Ngozi Iweala  tells lies, Nigeria does not Subsidies  petrol. You cant not subsidies what you get free ,   Ngozi Iweala should show us, the account. She tell lies.



Nigeria govt does not spend shit1 on petrol. It makes money from it each month.  What happen is that the people in the ministry of petroleum steal money. There was a case when someone convert nigeria oil sales money to his personal money and send it to his account abroad. About $10 millions.   During abacha govt, this is how most of abacha money was made.

The issue is Nigeria govt want the people of Nigeria to pay international price.  But to claim subsidy is wrong.   Can the people of nigeria afford international rate. the answer  is no.  So nigeria most continue to give the people cheap.


Like I said, i dont have confident in Ngozi iweala policy.


If I had  become president oil companies will process their crude locally and export. It is cheaper for this oil companies to produce locally, because of cheap labour. than for them to continue to ship to the west and produce it with higher labour cost. Companies want to cut cost.   


The issue why companies like shell, mobil, agip and others dont produce in Nigeria. Is because, we need to remove edo, delta and Yoruba out of Nigeria. there is no credit rating for companies to borrow loan from banks. But the north will not allow for accurate census in nigeria.


Shell, mobil, agip in nigeria can not be considered as foreign own any more because the bulk of the shareholders are nigerian.  until we remove edo,delta and Yorubas, there is no solution to the problem.

seal777:

75 percent of the fuel consumption in Nigeria goes majorly to service generators as a result of the inability of successive governmentS in reviving the power sector.

I dare the government in power to achieve two things and the whole noise about subsidy would be a stale topic for anybody to discuss:

1. 24 hour power supply
2. 90% local refining of petroleum  products.

If the government can not guarantee CONSTANT power supply despite the fact that Nigerians pay for it, even without using it and also local refining capacity despite the fact that we have what it takes to do so.  

My car consumes less than 500 Naira fuel daily but my Generator consumes triple of that : NOBODY SHOULD IN THE NAME OF ECONOMICS MENTION THE WORD " SUBSIDY" anymore except the fellow is a an enemy of Nigerians and a born WICKED.

Gud one! I agree with u on 24hr power and locally refining crude oil. However, I completely disagree with u on the italics; rather it is only a wicked mind that would advocate that Nigerians should not have anything to benefit from the country's resources. Right now, a very high % of Nigeria budget goes to gov officials.

I keep on wondering how Ngozi thinks; she suggested the same subsidy removal to Obj and yet nothing has changed. Nigeria spends so much money to import refined product that we exported as crude and yet our enslaved minister is not thinking of how to refine the crude oil locally to reduce cost of processing the crude to finished products(that do not only have fuel as its end products but other by-products that can generate additional income for the country).

I'm beginning to suspect that the so-called minister of finance is only working for the interest of the west. If not, does she not know that so much of importation is tantamount to importation of joblessness? Since the time the West/Europe were able to make Africans believe that ABSOLUTE CAPITALISM is the best system of running an economy, the countries that believed them without thinking continue to have the citizens suffer.

LIKE THE POSTER ABOVE SAID, POWER GENERATION AND NEAR-100% LOCAL REFINE OF CRUDE would help a lot; it'd not only drastically reduce the cost of producing refined products but also increase our GDP by providing jobs for our nationales and generate more revenue from the exportation of both crude and refined products.

BRAINWASHED NGOZI, THINK ABOUT THIS.

dont be silly, there is nothing like subsidy in nigeria.  Nigerian do not trust Jonathan Goodluck with their money in the first place. citizen most have a level of trust to its leader. this is why I once said ,this is one reason I once said,  i should be president. Because the people of Nigeria will trust me, more than they trust Jonathan Goodluck.  No citizen anywhere in the world will pay taxes to leaders they dont trust. 

Look here is Bishop Oyedepo two universities. the church is less populated than any the smallest state in Nigeria of bayelsa state.  No state in the federal republic of Nigeria has this. Even criminal want to rule over good people. It is not possible for people who dont trust you to give you money. Here is Oyedepo universities,   but because of a trust relationship.


Removing edo,delta and Yorubas from nigeria will solve most of your problem.

kulutempa:

There is only one way out of this mess and that is for refineries to be privatised in Nigeria and for the subsidies to be phased out gradually.   There is absolutely no need for a Nigerian government that cannot run any commercial enterprise successfully to be running refineries.   To the advocates of the retention of the fuel subsidy, just think about the number of jobs that could be created in Nigeria with more refineries and the foreign exchange that will be saved.   At the moment,  a large proportion of the subsidised fuel in Nigeria simply gets smuggled out to neighbouring countries.  Do you guys actually realise that Nigeria has just reached an agreement to import fuel from a refinery in Niger Republic.   Think about it.  Nigeria is OPEC's 7th largest oil producer, while Niger has no oil, yet we are importing petrol  from them.  We really have no shame in this country.

Here are what I consider better questions for you to ponder FIRSTLY 

a) What stops the FG from creating those jobs with the funds it has had, and still probably has now? 

b) COULDA-WOULDA-SHOULDA is not how you run a country. LACK OF FUNDS has never really been the a major issue with development in Nigeria to date, so why is your argument based on this?

c) The current refineries are STILL Operating(as of March 2011) at 30% capacity, even after BILLIONS have been pumped into UPDATING them all. Why in the world do you still think that money is the issue against running of refineries in Nigeria, by our Government? I mean this isn't rocket science, especially Nigeria and the obvious is involved.

Seriously, you need to THINK about questions before you throw them out cause it is obvious, you are not connecting with the facts of the situation in your argument above. Definitely, arguing against subsidy is one thing but providing cogent argument is another. You are yet to do the latter for pete's sake. Currently, as bad as the system is, subsidies still make the situation in Nigeria BEARABLE for many, including farmers, students, etc.

Subsidies ARE NOT EVIL . . . even the US has em, and there are no plans to remove them. What I am against is this BRUTE call to remove them without considering that the Subsidies themselves aren't the problems but the fact that the system is corrupt and plagued with corruption at all levels that need to be dealt with.

we will still be the to suffer it

seal777:

My car consumes less than 500 Naira fuel daily but my Generator consumes triple of that : NOBODY SHOULD IN THE NAME OF ECONOMICS MENTION THE WORD " SUBSIDY" anymore except the fellow is a an enemy of Nigerians and a born WICKED.[/b]

Just so you know, the reason your car consumes less than 500 Naira fuel daily is because the cost is subsidized. When that cost goes up to 1000 Naira where it ought to be at without subsidies, will your argument against the EVIL SUBSIDY still be same

Kobojunkie:

Subsidies ARE NOT EVIL . . . even the US has em, and there are no plans to remove them.

This is Nigeria not the US, its a false comparison.

Kobojunkie:

What I am against is this BRUTE call to remove them without considering that the Subsidies themselves aren't the problems but the fact that the system is corrupt and plagued with corruption at all levels that need to be dealt with.

The only thing thats BRUTE is your crude assessment. Mrs Iweala did not give a time frame for the withdrawal of subsidies.  Its obvious that she will have experts at her disposal who are light years ahead of your kobo self,  to ensure that an anti-corruption policy is in place, before withdrawing the fuel subsidy.

Those people calling for the removal of petrol subsidies are without common sense giving the absence of any other alternative they are invariably calling for anarchy and the beginning of the 3rd world war starting from Nigeria this time around. Already we pay NEPA bill for constant darkness and then buy generator and petrol to achieve some few hours of minimum electricity because mind you those petrol generators do not carry a/c and the noise alone is simply hellish. After government has provided 25 hours of constant electricity for 10 years and also rehabilitated all the roads then they can take their phantom subsidy away.

just so that we understand that corruption (wicked corruption) has destroyed this country, I will use the Iranian (they are corrupt also) example. They've been under sanctions for a while and becos they've been importing petroleum prodcuts for a while, they knew they were vulnerable to US/UN/EURO sanctions and prepared for it. they decided to build their refineries.
, I have to put this in perspective, IRAN, a country under all sorts of sanctions will complete 7 refineries , all in less than half the time that NIGERIA, the darling of the west has been talking of building a refinery and we are yet to identify the location of any one of them. By the way, if you are thing OANDO's refinery at overhyped Lekki FTZ, then forget it. OANDO has said that they are not planning to build any refinery for now!

see link below

http://en.wikipedia.org/wiki/National_Iranian_Oil_Refining_and_Distribution_Company

BTW, Iran used tohave this fuel subsidy thing but decided to distribute the cash instead (I must admit that will not work in NIgeria)

if it was plain economics, we should just cut this subsidy but it's not that simple!

Iran's planned refineries

The govt. should remove subsidy and increase wages with 72.8 billion Naira  so that many people can take public transport leaving those who are rich to pay more, thereby workers having more money in their pockets to spend. Just an observation.

jacobs123:

just so that we understand that corruption (wicked corruption) has destroyed this country, I will use the Iranian (they are corrupt also) example. They've been under sanctions for a while and becos they've been importing petroleum prodcuts for a while, they knew they were vulnerable to US/UN/EURO sanctions and prepared for it. they decided to build their refineries.
, I have to put this in perspective, IRAN, a country under all sorts of sanctions will complete 7 refineries , all in less than half the time that NIGERIA, the darling of the west has been talking of building a refinery and we are yet to identify the location of any one of them. By the way, if you are thing OANDO's refinery at overhyped Lekki FTZ, then forget it. OANDO has said that they are not planning to build any refinery for now!

see link below

http://en.wikipedia.org/wiki/National_Iranian_Oil_Refining_and_Distribution_Company

BTW, Iran used tohave this fuel subsidy thing but decided to distribute the cash instead (I must admit that will not work in NIgeria)

if it was plain economics, we should just cut this subsidy but it's not that simple!

The fact of the matter is Iran is richer than Nigeria, in fact its in the top 20 richest nations in the world with a population half that of Nigeria.  secondly, the sanctions have not worked at all, the Iranians saw them coming and have found plenty of alternatives, China being the main beneficiary. Finally, despite the sanctions Iran dose more trade with the west than Nigeria 

musiwa.,.:

dont be silly, there is nothing like subsidy in nigeria.  Nigerian do not trust Jonathan Goodluck with their money in the first place. citizen most have a level of trust to its leader. this is why I once said ,this is one reason I once said,  i should be president. Because the people of Nigeria will trust me, more than they trust Jonathan Goodluck.  No citizen anywhere in the world will pay taxes to leaders they dont trust. 

Look here is Bishop Oyedepo two universities. the church is less populated than any the smallest state in Nigeria of bayelsa state.  No state in the federal republic of Nigeria has this. Even criminal want to rule over good people. It is not possible for people who dont trust you to give you money. Here is Oyedepo universities,   but because of a trust relationship.


Removing edo,delta and Yorubas from nigeria will solve most of your problem.

Are you for real? Last time I checked, these, are the states that have this natural resource?
BTW, why do you despise THE FINANCE MINISTER with so much passion

Talking is cheap. FG subsidizes diesel and petrol for mobile and affluent Nigerians while it does not subsidize kerosene for poor masses.Political cabals are looking for more money to squander, GEJ and co spent about $30 billion ECA- Excess Crude Account in less than 1yr ie $ 2.5 bn a month- yet nobody is saying anything about it because it was spent by politicians for politicians and on politicians.

I think that removing the oil subsidy is the only sustainable solution right now. It is a draconian idea but albeit, the only way forward in this regard.

First and foremost, how many average Nigerians benefit from the subsidy

Secondly , we keep saying that refineries should be built, I have lost hope in the ability of the Nigerian Govt -past present and future to effectively see any National project to a successful end because of the endemic level of corruption in the system. So saying that, Govt should build or refurbish existing refineries to be able to meet national demand is NOT A TENABLE SUGGESTION FOR ME.

In this regard, private investment is the only way forward and how many private investors-home and abroad would want to invest in a capital intensive project like oil exploration, refining, sales and distribution, if the existing subsidies act as a barrier? The answer of course is NO!

I quite agree that the masses will suffer but truth be told- are the masses not suffering already even with the subsidy

If the removal of subsidy achieves it's intended outcome in 'practice', the market becomes efficient and companies will be compelled to refine locally which means more jobs will be created, more refineries built  thereby, driving down the cost of production and problem of 'international pricing'( i.e.using the dollar as the benchmark). More so, prices will be determined by market competition and demand.

A very good case is the GSM industry, I quite agree that the industry is still light years behind when you look at Telcos in other countries and privatization process fraught with a lot of ''unethical issues, but just imagine what the situation would be like, if Nitel still has the monopoly of the telecomms industry in Nigeria especially in this time and era.

God bless Nigeria!

Well said deenee. This matter is a difficult one but the truth is clear. We are wasting our money and destroying our productivity at the same time.

It is similar to the problem of over dependence on oil. because we have oil, we have abandoned manufacturing and agriculture.

deenee:

I think that removing the oil subsidy is the only sustainable solution right now. It is a draconian idea but albeit, the only way forward in this regard.

[size=13pt]First and foremost, how many average Nigerians benefit from the subsidy [/size]

QUITE A LOT of Nigerians benefit from the subsidies. It may not be clearly reflected at the pumps but I do believe the reason the price of gas remains relatively low in Nigerian compared to places like UK or even the US is because those subsidies exist. It acts as a sort of buffer to keep prices from rushing up in much the same way the price of cornflakes, or even rice does.

If you completely remove the subsidy(all things remaining as they are today), the price at the pumps is likely to jump as high as 200%(no scarcity necessary to cause this).

nolongTing:

The fact of the matter is Iran is richer than Nigeria, in fact its in the top 20 richest nations in the world with a population half that of Nigeria. secondly, the sanctions have not worked at all, the Iranians saw them coming and have found plenty of alternatives, China being the main beneficiary. Finally, despite the sanctions Iran dose more trade with the west than Nigeria

Is this why Nigeria can not build a refinery (1 refinery) or even fix existing refineries. Ivory coast has a working refinery if you don't know.
The sanctions did not owrk because the Iranians can work around it and can produce things for themselves, meanwhile they still have the same problem of corruption.

nolongTing:

The fact of the matter is Iran is richer than Nigeria, in fact its in the top 20 richest nations in the world with a population half that of Nigeria.  secondly, the sanctions have not worked at all, the Iranians saw them coming and have found plenty of alternatives, China being the main beneficiary. Finally, despite the sanctions Iran dose more trade with the west than Nigeria 

Those sanctions have devastated Iran, imo. They are a great and talented people (at least based on the Persians I've met here from there, results in these international math/physics/science competitions), and would be much more further developed economically if it weren't for these sanctions. Just because they are richer than Nigeria doesn't mean they are anything close to their full potential.

Considering there is crushing poverty in Nigeria,the FG has to sustain the subsidies .

^^^^
Why not  the govt. use the subsidy to increase workers salary!? Thereby given them more money to spend and the economy will receive boom from spending!

^^^ How much of the money currently available to the same Government has been used in increasing workers salaries, or even building infrastructure, to date? Will taking the subsidies out automagically clean up the system, the major problem in all this?

Iweala just announced there are 20 thousand Abandoned projects(NOTE -- no claim that these were abandoned because of lack of funds ooo) she will go back to tackle. Dem tell you say na money dey hold Government back from doing anything?

^^^^
JEEZ! Sorry!

Cleaning up the system? I don't think increasing of workers salary cleans up the system. All I was saying was for the ordinary workers to have more money so that they can afford what they want. If there is increase in pump price the rich are bound to pay more why the poor using public transport will pay fairly increase price thereby having something to fall back on. Just an observation. It can make money to circulate if the leaders are really ready to move things forward.

I don't get what you mean by abandoned projects not due to lack of money has anything to do with the increase of salary, because that amount per a month is enough to increase workers salary by 10% - by my guess.

Anyway, if your take is to allow the subsidy to continue that would be eating deep into the govt. pocket where the rich also benefit just like the poor. The only area I can see the subsidy is going to have effect on the poor is the Kerosene use by them. If govt. is trying to prevent them from using the product it should provide cheap gas as alternative - Nigeria has gas in abundant.

jacobs123:


Is this why Nigeria can not build a refinery (1 refinery) or even fix existing refineries. Ivory coast has a working refinery if you don't know.
The sanctions did not owrk because the Iranians can work around it and can produce things for themselves, meanwhile they still have the same problem of corruption.

You are flying off on the wrong tangent. My point was simple – Iran has a GDP per capita which is around four times that of Nigeria's. This, in my opinion makes it obvious that Iran despite sanctions is richer and therefore more capable of developing refineries than Nigeria.

I certainly did not even dream of attempting to make excuses nor apologise for the sorry state of Nigeria's oil sector.