You don’t have to be ingenious to know that the removal of subsidy is Good and it sets a level playing field for all countries?

It is either we are in ECOWAS or not? If we have decided to remain in ECOWAS then, it makes sense to do away with subsidy otherwise, what sense does it make if a man fills a trailer laden with our Petrol for N69.00 only for him to pick and choose any of the surrounding border country to sell his cheap oil at a super-duper killer price in Niger, Chad, Benin and Cameroon. Sometimes the product is sold for treble if not four or five times the price they bought it for.

Has Nigerians really sat down at least for once and asked a simple pertinent question, “ why do we have fuel scarcity regularly and most of our neighbours never seem to have” I think the removal of this subsidy is long overdue.

please, what has scarcity got to do with subsidy? I could not find their relationship.

Yes, I have not thought about it. Please educate me.

please, what has scarcity got to do with subsidy? I could not find their relationship.

Yes, I have not thought about it. Please educate me.

If you have a commodity that sells for N10.00 in Nigeria, but when you take it across the border to Chad, Niger, Benin and Cameroon they would buy it from you for N50.00, who are you likely to sell your product to. Sikena, finito

You are right - unfortunately not many can think as you can do.

It works like this:
Borrow 7'500'000 NGN, then:

You can get a semi trailer for 40'000 lts of petrol for around 5'000'000 NGN. Fill it and you spent around 7'500'000 NGN.
Cross the border and you sell the fuel for (1 USD/lts) 6'500'000 NGN.
Buy a second filling for 2'500'000 NGN and sell it again for 6'500'000.
You spent 10'000'000 NGN and made 13'000'000 NGN.
Makes Earnings Before "private contribution to the Nigerian tax system and Welfare Of Uniforms" (EBNajaTaxandWOU) of 3'000'000 NGN
From now on, one run brings 4'000'000 EBNajaTax and WOU
Assume you make one run a week: 16'000'000 a months.
Got it?
Guess, who has an interest to stop it?
You? - why should you? you make 16'000'000 a month!
Uniforms? - it's a part of their welfare!
Private car driver? - who cares as long as there is fuel, its cheap and can be wasted, tomorrow is tomorrow, don't think - drink!
Governement? - you make your private contribution to the informal tax system, don't you?
Environment? - what's that?

They know not, neither do they understand. They walk on in darkness!

The argument in support of fuel subsidy is a very simple argument.

However, beyond paper projections and simulation,there are other issues which need to be addressed.

How about making refineries work in Nigeria? How about exporting refined products to other countries as opposed to importing?

How has the additional revenue from previous removal been utilized? What can you point to as its fruit? If we can prevent smuggling at the borders can we be assured that savings from the removal would be used for the masses? Can a government that can't unravel and uproot the fuel-subsidy 'corruption' beat its chest and promise us that it will use the savings judiciously?

On this proposed removal, what exactly are they promising as 'palliatives' which is different from what IBB promised in the late 80's/early 90's? Do they just want to buy a few FGN-assisted buses as palliatives?

Which infrastructure problem have the democratic governments (from 1999) solved in over 12 years?

Pukkah:

The argument in support of fuel subsidy is a very simple argument.

However, beyond paper projections and simulation,there are other issues which need to be addressed.

How about making refineries work in Nigeria? How about exporting refined products to other countries as opposed to importing?

How has the additional revenue from previous removal been utilized? What can you point to as its fruit? If we can prevent smuggling at the borders can we be assured that savings from the removal would be used for the masses? Can a government that can't unravel and uproot the fuel-subsidy 'corruption' beat its chest and promise us that it will use the savings judiciously?

On this proposed removal, what exactly are they promising as 'palliatives' which is different from what IBB promised in the late 80's/early 90's? Do they just want to buy a few FGN-assisted buses as palliatives?

Which infrastructure problem have the democratic governments (from 1999) solved in over 12 years?

From the millions made by smuggling refined oil, a few can be sown back into the system to sabotage any talk (let alone effort) aimed at getting the refineries functional. Government is not a 'spirit being', they can do jack without our say so. You and I are government!

Personally, I am tired of this subsidy talk. Whichever way it goes, I am in! Shikena!

Are these things smuggled in Cans? What do people mean by saying that we can not have cheap items in Nigeria because they are sold at a higher price in the neighboring country. The government should live up to its responsibilities by securing our borders.

Pukkah:

The argument in support of fuel subsidy is a very simple argument.

However, beyond paper projections and simulation,there are other issues which need to be addressed.

How about making refineries work in Nigeria? How about exporting refined products to other countries as opposed to importing?

How has the additional revenue from previous removal been utilized? What can you point to as its fruit? If we can prevent smuggling at the borders can we be assured that savings from the removal would be used for the masses? Can a government that can't unravel and uproot the fuel-subsidy 'corruption' beat its chest and promise us that it will use the savings judiciously?

On this proposed removal, what exactly are they promising as 'palliatives' which is different from what IBB promised in the late 80's/early 90's? Do they just want to buy a few FGN-assisted buses as palliatives?

Which infrastructure problem have the democratic governments (from 1999) solved in over 12 years?

The palliatives are still being worked on (GEJ made an important speech about that yesterday); we need to wait for the details lest we begin to walk in circles. You are right though in demanding for details that we can scrutinise in micro-detail.
Truth is, just a fraction of that money will be enough to take care of a good welfare package for the poor; the rest can go into capital expenditure (though the lazy minded governors seem to be angling hard for more Abuja money).

As advanced and 'wealthy' as Europe is fuel is still being subsidized by a good number of countries including the UK!

The arguement in favour of immediate removal of subsidy is so lame and unintelligent that when you analyze it, all you can 'see' is LOOTOCRACY!

The problem is not subsidy, rather the inefficiency that characterize our governments and leadership!

Who does the President thinks He is fooling? Surely not me!

When 2011 budget was being drafted, they surely must have factored in market variability before the N240bn subsidy was arrived at. Simply put, why can't they tell us what led to the increase of N150bn subsidy in August 2011? What market or economic factors resulted in a massive jump from from N20bn in subsidy from Jan to March 2011 to a whooping N150bn in Agust 2011?

Dudes, let us not forget too quickly, okay. Draw the parallel between when GEJ gave the order for NNPC to make fuel and Kerosine supply stable, factor in the time frame it usually takes for the products to be delivered, those who have eyes behind would understand why the subsidy suddenly went bizzeek!

It makes no economic sense for the FG government to remove subsidy in one go in an economy where she largely has no control over pricing. If the Petrol Motor Spirit goes up to N250 a liter, you sure bet everything else will increase triple fold and Labour will go back to FG for new minimum wage, cost of governance will increase due to inflationary measures and the N1.5trillion been banded about will melt into the economy as 'service'. Infrastructure will be no where 'cos a project that should have cost N1bn will go up to N1.8bn, due mainly to 'false inflation'. So then what is to be gained by removing susidy in one go instead of phased removal?

Beside, since the deregulation of the other petroleum products, has Nigerians gotten good value for money?

As usual, GEJ talks before He thinks! He should have known better that His economic team is not an island of knowledge! And that engaging in wide consultation with public and private sectors would give a better picture of the possible impact of this subsidy removal policy.

Someone should tell the President : Fix the refinaries silly and build new ones before messy about with subsidy removal!

you are the greatest fool in this world. if you cant show us, what they have use the billions from oil for. show us federal govt project in the last 2 years.

The blind cant see.
Removal of fuel subsidy is the only way.

Omo_Tier1 sorry, but this is false testimony, no European government is subsidizing fuel. Either you know it or you dont know it, in either case it is advisable to read and think first before writing wrong statements.

Not until the government can tell us what they are using the other revenue for, they have no say. Subsidy is the only thing they use our money for except for the obvious, their fat pockets.
Subsidy is the only thing we collect from our government.

Secondly, we haven't started talking the after effect of this removal which multiply our pains by a factor of 10.

Look guys, removal of subsidy does not guarantee that those "oil thieves" will not find another avenue to rob us blind. It does not guarantee that the money derived, will be use on Nigeria rather than their pockets. In fact, it does not guarantee any of the listed advantages theoretical economics and intuition teaches in us. Remember, Nigerian is not the "classic economy" as you were taught in school. It is a rich (money-wise) and complex country in which everything is entangled around Oil. Think about the hyper-inflation and its effect, when already, 70% of Nigerians live under the poverty line.

To finish off, "Poverty does not know ethnicity or religion. It will affect everyone".

For every 10pence petrol or diesel you buy in the UK, the Treasury gets 9 pence in tax. Taxation is the holy grail of national revenue, Lagos by harmonising her Tax potentials have seen their revenue surge upwards. Subssidy is a communist and socialist policy.

Knowall.
UK govt gives free healthcare-NHS is that socialism or communism? US govt subsidizes Amtrak - national rail system.

All these people coming online telling us that subsidy removal is good are funny people I swear, subsidy is a scam, the guys importing these things bring in a certain quantity and claim a multiple of what they should claim, is that the fault of the common man on the street? Someone said the landing cost of fuel is less than 65 naira and that the bulk of the money paid for fuel is tax from the importing country, why is it so difficult to build refineries? Why is it so difficult for our leaders to do what is right?

Knowall.
UK govt gives free healthcare-NHS is that socialism or communism? US govt subsidizes Amtrak - national rail system.

After they have collected 99p from every £1.00 you spend on the pumps. Na wetin you go use go NHS Hospital, if na your car you are given it back to the state. If public transport the clutches of the treasury is well enmeshed within the pricing structure of a ticket, so no way, no way u would give the system back something. A friend once told me if you put £100.000 in your suit case and try to bring it in, the custom men would not ask you any question, because that money would be spent in their economy so they turn a blind eye, but you try taking that money out, na that day you go know say oyinbo man eye tear for money!.  

wakeupnaja:

Omo_Tier1 sorry, but this is false testimony, no European government is subsidizing fuel. Either you know it or you dont know it, in either case it is advisable to read and think first before writing wrong statements.

Oh really? Shows you have very little knowledge of how subsidy works! Go find out 'm not going to lecture you on this. Ever heard of 'back subsidy'? That is what UK does with Energy (including fuel), and Agriculture!

Haven read your proposition you have failed just like GEJ to provide answers to several questions that has rattled the mind of seasoned economist!

It is not enough for FG to say 'we will use the money recovered from subsidy removal for infrastructure'! FG has to be specific about which infrastructure so that Nigerians can judge for themselves if it is worth removing fuel subsidy! Lets not forget that Nigeria's FG is another name for white 'elephant projects' and I am very sure the big hwaks have already lined many up for the lame duck yes sir yes sir GEJ.

The question I put to you is this: How is FG going to ameliorate the 'false inflation' effect this subsidy removal will have on Nigerians?

Remember in Nigeria, prices of prices always increase in a linear correlation and never decreases!

Nairaland moderators always act stupid!, U guys have asked this question both directly and indirectly, Pls if u guys are out of ideas just close down the site or start posting porn on it, /dats my opinion/

Subsidy is the best option for dis country(rebuilding this country).but the politicians will never be sincere about it(the money that is saved on subsidy will be used by this useless people to acquire more political power).we need sincere pple to govern us.

The writer of this blog is the biggest fool on earth,pro jonathan,one of those that sit and write cheques in aso rock,a big slowpoke that doesn't feel the pulse of common man,we r waiting for u idiots to remove subsidy,let's see how this country will stand.fool

@ the first poster. You have no point at all.Why should we even import fuel in the first place?
During Nigerian civil war.Biafran soldiers used to refine oil themselves and so many illegal refineries still exist in Nigeria.
Let us start refining oil locally here by building so many refineries and forget about importing what we are producing.
Subsidy should stay since Government wants to continue to waste resources importing oil.Meanwhile they are buying from their own refineries outside the country.
A fool @ 40 is a fool forever,They are fooling us

Omo_Tier1:

Oh really? Shows you have very little knowledge of how subsidy works! Go find out 'm not going to lecture you on this. Ever heard of 'back subsidy'? That is what UK does with Energy (including fuel), and Agriculture!

Haven read your proposition you have failed just like GEJ to provide answers to several questions that has rattled the mind of seasoned economist!

It is not enough for FG to say 'we will use the money recovered from subsidy removal for infrastructure'! FG has to be specific about which infrastructure so that Nigerians can judge for themselves if it is worth removing fuel subsidy! Lets not forget that Nigeria's FG is another name for white 'elephant projects' and I am very sure the big hwaks have already lined many up for the lame duck yes sir yes sir GEJ.

The question I put to you is this: How is FG going to ameliorate the 'false inflation' effect this subsidy removal will have on Nigerians?

Remember in Nigeria, prices of prices always increase in a linear correlation and never decreases!

Spot on bro.

Pro-subsidy removal ppl should be educated & provide answers to this issues raised.

even though it can be gratifying to the entreprenuer when subsidy is removed, but leaving N1.00 trillion Naira in the hands of Jonathan and his co-drunken sailors is like leaving a " loaded gun in the hands of a toddler" whilst showing the toddler that if he presses the trigger a " loud" baaang would be heard. This govement is a goverment of journey-men, but I would wish they proof me wrong. 

my contribution to this debate (if it qualifies so as some juveniles here have resorted to insults) is one two points of observation;

1) even if all our refineries are working to full capacity, there will still be subsidy at the point of the sale of crude to the refineries or at the pumps. this is obvious due to the huge disparities between the prices of petrol in Nigeria and in other countries where the market is fully deregulated. either way our neighbours like cameroun, Niger etc will enjoy smuggled fuel as in the past . and that is not nice.

2) for those arguing for securing our borders against smuggling. well its a must but it wouldn't happen over night. the boarders are so long and difficult to police. over 3000 km is no small task. US is still struggling with Mexicans slipping in and out at will, even Israel with all her sophistication and relatively shorter boarders has hamas slipping in and out. it will be difficult but not impossible for Nigeria to eliminate this. but lets be realistic, it wouldn't happen in the short term.

3) diesel and aviation fuel has already been deregulated so the issue new is petrol. the fact is that companies and large transporter use diesel, large swath of the economy is running on deregulated fuel.

4) many people are against deregulation because of the corrupt and wasteful nature of government. but keeping the status quo is not an option either. demand for transparency should not depend on fuel subsidy or not.

5)I welcome the deregulation of the oil industry for its obvious economic advantages and also maybe, just maybe, the passion and emotions generated by the debate will jolt Nigerians into challenging the inefficiencies in the system.

You know the saddest reality is that this subsidy removal will eventually not fulfil the aim for which it is being implemented reason being that our govts overtime tend to always beat about d bush in an attempt to tackle core issues facing our nation.sadly d subsidy removal wud go tru but more painful is d sad fact that d purported infrastructural developments and safety nets talk wud fail cos of dis monster called 'corruption'!, its worrisome that our leaders r not sincere in handling d issues facing dis country else d govt sud knw d@ d same 1.2trillion said sum wud find its way into d pockets of some 'unknown' elites, Corruption it is d@ took a purported 20bnaira oil subsidy 4 a month to 150bnaira in a particular month, question is why can't our govt be sincere and tackle dis issue squarely rada dan go about creating unnecessary attention with subsidy removal/non-removalsad

can somebody tell me what has the FG done for the Nigerian Citizens? have they provided us Electricity, Good road, Free health care, free education? as far as am concern the FG has not done anything for Nigerians and now they want to remove fuel subsidy. Removing fuel subsidy is never a solution to stop those cabals because they will still invent another means to do their biz. FG, build us new refineries and repair the existing ones and let them work at full capacities  then you can remove your subsidy and share among yourself in your federal government Nigeria limited company.because you will never use the money to the anything for nigerians since you've not done anything for us even when you read budget every year. After all you all own refineries outside nigeria and those are the places you send the products to for refining. God save Nigeria from bad leadership.

removal of subsidies is long overdue in the coz of the following
-importers become richer at the expense of nigerians
-smugglers become richer at the expense of the country
-neighboring countries profit at the expense of nigeria
-no sensible corporation will invest in building a refinery in a nigeria if nigeria continues subsidizing oil, and we all know, govt can neither build or manage refineries, and this leaves us in the never-ending cycle of importing
-subsidizing encourages corruption and laziness, and provides an easy means to loot the country dry without anyone noticing
-foreign companies (from which we import ) and their host countrries benefit at the expense of nigeria
-economy built on "imported fuel subsidies" is very likely to crash like a pack of cards coz it is built on lies
- etc

truth is however,
- that this subsidizing is about the only thing govt is doing for nigerian and removing it will cause untold hardships
- benefits of subsidy removal is not going to be seen in a day - it is a long term thing
- the money saved by subsidizing will most likely be looted again by these corrupt politicians

we just need to weigh these pros and cons and decide on which way we want to go

NuhuRibadu:

removal of subsidies is long overdue in the coz of the following
-importers become richer at the expense of nigerians
-smugglers become richer at the expense of the country
-neighboring countries profit at the expense of nigeria
-no sensible corporation will invest in building a refinery in a nigeria if nigeria continues subsidizing oil, and we all know, govt can neither build or manage refineries, and this leaves us in the never-ending cycle of importing
-subsidizing encourages corruption and laziness, and provides an easy means to loot the country dry without anyone noticing
-foreign companies (from which we import ) and their host countrries benefit at the expense of nigeria
-economy built on "imported fuel subsidies" is very likely to crash like a pack of cards coz it is built on lies
- etc

truth is however,
- that this subsidizing is about the only thing govt is doing for nigerian and removing it will cause untold hardships
- benefits of subsidy removal is not going to be seen in a day - it is a long term thing
- the money saved by subsidizing will most likely be looted again by these corrupt politicians

we just need to weigh these pros and cons and decide on which way we want to go

And if government can not build and maintain a refinery and government of other countries are doing it to the extent that they are refining for us does it not show we dont have a good government ? They should bow their heads in shame instead of giving excuse

You simply should not be subsidising a finite and environmentally damaging comodity such as oil.

If fellow african countries some of which are poorer than us are able to buy the stuff at international prices so can we. I think the scaremongering is over-hyped. The cross border thing is like saying for every dozen barrels we export we give a couple free to our neighbours. This is unacceptable.

Having said that I have always advocated a sequential removal in sync with mutually agreed developmental milestones. As such 10% goes by say 18th of October, this and that program will have to be in place by 17th next year or the house halts any further price hikes.

In such a case both government and the people are under equal pressure.

A more favourable alternative will be to privatise the oil industry. Let the companies set their price regimes under the scrutiny of the DPR. The NNPC goes.

Nigerians have the most shallow minds on the planet, no wonder our governments cannot see beyond their nose. They always engage in Knee jerk reactions to all problems. Furthermore, it is only a mad man that expects to take the same action over and over again and expect a different result. The government had been removing petroleum subsidy for as far back as i can remember and after a few months we come back to the same spot we started, debating about removal of fuel subsidy again. Should we not look back and reappraise the problem and proffer a different solution?

The problem of fuel subsidy is much more complex than the pump price of fuel, it is a problem of our economy in general. The main problem is our exchange rate. Because we are a consuming nation, pump prices affects inflation in all facets of our economy, so once there is an increase in petroleum prices, the cost of everything - including cost of production of goods and services will jump. This will affect the exchange rate and the naira will slide against the dollar and other currencies, making nonsense of the subsidy and so the debate about subsidy will start all over again. This is the vicious cycle we have been experiencing for the past 20yrs.

If the four refineries are working, the issue of subsidy will be reduced, since the crude is ours and there is virtually no transportation costs. Then why can't government subsidize the cost of crude (selling at far less than international price) to people who bought license to build refineries, at least for a minimum of five years. (most of the crude is stolen by government officials anyway, so even if the crude is given free to private refineries, we will all benefit)  

Why cant government control our borders? in this digital age, satellite technology has made these things easier. What is the benefits of the so called Nigerian satellites.

If the government feels they are not ready to take any responsibility, then it should resign and allow someone who can run a government take over.