Re: Fuel "Subsidy" Is A Scam - Buhari
« #31 on: January 21, 2012, 11:03 AM »

http://books.google.co.uk/books?id=i-br73v2yMAC&pg=PA51&lpg=PA51&dq=scarcity+of+essential+commodities+in+nigeria+1983&source=bl&ots=ce3qJTHHUP&sig=acx4NloLCkRWkKWXBUpGjWKTqOQ&hl=en&sa=X&ei=AoUaT6uxO8jP8gPmy5HLCw&sqi=2&ved=0CDYQ6AEwAg#v=onepage&q=scarcity%20of%20essential%20commodities%20in%20nigeria%201983&f=false

http://www.nigerdeltacongress.com/narticles/nigeria%20political%20economy.htm

Thanks for this.

You are welcome

culled from another thread:

Please read the honest view of a foreigner to us on November 24th, 2009 and see why we must demand good and accountable government. We must take our destiny in our own hands.

Happy reading:

The Minister of Information and Communications, Dora Akunyili, yesterday got more than she bargained for when ENERIQUE FERNANDO ARRUNDELL, the Venezuelan Ambassador to Nigeria, used the opportunity of his visit to her office to tell Nigerians some hard lessons on how to manage, develop and utilise their God-given natural resources for the benefit and good of all.

The envoy, who was responding to an appeal by Mrs. Akunyili to help woo some of his country’s investors to come in and establish refineries under the federal government’s planned deregulation of the downstream sector of the nation’s petroleum industry, advised Nigeria to rather look inwards and to take full control of the industry.

Though, he acknowledged Venezuela as a prominent member of the Organisation of the Petroleum Exporting Countries (OPEC) like Nigeria, he said his country will be willing to collaborate with the federal government to develop the industry.

The hard truth Mr. Arrundell said, “In Venezuela, since 1999, we’ve never had a raise in fuel price. We only pay $1.02 to fill the tank. What I pay for with N12,000 here (Nigeria), in Venezuela I’ll pay N400. What is happening is simple. Our President (Hugo Chavez) decided one day to control the industry, because it belongs to the Venezuelans. If you don’t control the industry, your development will be in the hands of the foreigners.

You have to have your own country. The oil is your country’s. Sorry I am telling you this. I am giving you the experience of Venezuela.

We have 12 refineries in the United States, 18,000 gas stations in the West Coast. All we are doing is in the hands of the Venezuelans.”

The envoy said, “Before 1999, we had three or four foreign companies working with us. That time they were taking 80 per cent, and giving us 20. Now, we have 90 per cent, and giving them 10.

But now, we have 22 countries working with us in that condition. It is the Venezuelan condition. You know why? It is because 60 per cent of the income goes to social programmes.

That’s why we have 22,000 medical doctors assisting the people in the community. The people don’t go to the hospital; doctors go to their houses. This is because the money is handled by the Venezuelans.

How come Nigeria that has more technical manpower than Venezuela, with 150 million people, and very intellectual people all around, not been able to get it right? The question is: If you are not handling your resources, how are you going to handle the country?

“So, it is important that Nigeria takes control of her resources. We have no illiterate people. We have over 17 new universities totally free.

I graduated from the university without paying one cent, and take three meals every day, because we have the resources. We want the resources of the Nigerian people for the Nigerians. It is enough! It is enough, Minister

Professor Tam David-West, Petroleum Minister during the era of General Muhammadu Buhari, and Mines, Power and Steel in the General Ibrahim Babangida government, spoke with GBENRO ADESINA on the controversy over oil subsidy removal

For the layman on the street, does oil subsidy exist?

There is no oil subsidy in Nigeria. It is a lie and fraud. After the regime of General Buhari, I challenged government after government, from General Ibrahim Babangida and Chief Ernest Shonekan to General Olusegun Obasanjo and President Goodluck Ebele Jonathan, to appear on national television with me to justify their subsidy.
Let me introduce you to the basics. Let us say a particular commodity like gari is sold for N10 per bag hypothetically and the farmers are producing to make us self-sufficient at N10. But at a time, they can’t produce enough because of either bad harvest or natural causes, the government now says since garri is a staple food, the government goes to another country where gari is produced and buys it at N20 per bag and brings it to Nigeria to sell at N10 per bag. The government now writes off the extra N10 –– that is subsidy. The extra N10 the government pays on behalf of the people for them to still buy at N10 is the subsidy paid on that commodity.

No government should exist if it can’t serve the people because government is a trust. They are trustees for the people. Edmund Burke, the great British philosopher, said that government is a contrivance of human wisdom and the wisdom should be used to satisfy people’s needs. Any government that can’t satisfy the need of its people is irrelevant and must be overthrown and kicked out.

Coming to petroleum, there is no oil subsidy. Oil subsidy in Nigeria is fiction, it doesn’t exist and it is a fraud. During Buhari’s time, we had three refineries. When necessary, I mean, whenever there was shortage of oil, we embarked on offshore processing. If at a time, the production of oil couldn’t satisfy our needs, we selected oil companies like Shell and others that we would give crude oil to refine abroad, sell at foreign exchange and pay to our account. We got quantum of barrels of crude oil and gave to these companies and after they might have refined it, let’s say they got one million litres and we needed only 200 litres, they would give us the quantity we wanted and sell the remaining and give us foreign exchange. We only took our fuel back, never imported fuel.

This time what do they do?

These fraudulent people will take our oil, refine it and bring it back and sell it at foreign exchange. This is fraud in the highest places. Why is it that during Buhari era, with three refineries we were self sufficient but at their time, with four refineries we are now importing fuel?

I personally signed the contract of the fourth refinery which we call new Port Harcourt Refinery in 1984. It was one of the best in Africa, with a capacity of 160,000 barrels per day. The first refinery, in Port Harcourt, was built in 1965; Warri refinery in 1978, and Kaduna refinery in 1980. A newly constructed refinery can’t have major problem for about 30 years. The problem they will not tell you is that after Buhari, every Minister and Head of State became an oil sheikh, except General Abdulsalami Abubakar.
Some ministers have petrol stations and oil blocs. You can’t serve the nation and serve yourself at the same time because you can’t serve two masters at a time. One must serve his country and the dividends of doing this is satisfaction. Total capacity of our four refineries is 445,000 barrels per day. If the refineries are working even at 80 per cent, we will have more than enough product. They did not do that but sabotaged our refineries.

I have been shouting since 1995 and I wrote that they are killing Nigeria and poor men. And in 2009, the House of Representatives corroborated me by saying that refineries were sabotaged. Abdulsalami as head of state, reacting to the state of our refineries, said he didn’t want to open a box of scandal. Why did they do this to the common man? Who are the importers? Big people!

A senator said this year, Nigeria spends N860 million on fuel importation and they projected that by the end of the year, over N1 trillion will be spent on importation of fuel when our budget is N4.3 trillion. Insanity! Dan Etete said they needed $250 million to repair the refineries but the same minister said Nigeria is importing fuel at $900 million. Is that not insanity? If you need this huge amount of money to repair refineries, why don’t you build new refineries? The money you are using to import, use it to build refineries.

Why do you think Obasanjo did not repair the four refineries we had and build four extra for petroleum to be sold at N20 as he analysed when he was in power?

Olusegun Obasanjo is a great liar. They will not do so in order to continue to import fuel for selfish reasons.

Is it true that Nigeria has the lowest prices of refined products among oil producing countries?

Forget Jonathan! He doesn’t understand what he is saying. He is only parroting what they told him. He talks like a parrot. Can he remove what doesn’t exist? Can’t we build our own refineries to serve us and remove the untold hardship they want to impose on us? Ngozi Okonjo-Iweala said the subsidy goes to the wrong hands. If they remove it, will people not suffer the more? Everything will increase. The new minimum wage of N18,000 will become N2,000.

But Obasanjo said because it is built in phases, it will take about five years to build a refinery?

It is a lie. I told you Obasanjo is a liar. It took just two years to build the fourth refinery. I signed its contract. It is between two and three years. The problem is that there is intellectual laziness and physical indolence. In developed countries, the president will not just talk without being well quizzed. But in Nigeria, at a media chat once, Obasanjo shouted on journalists or talked to them as a teacher. They kept quiet. It doesn’t take five years to build a refinery.

Okonjo-Iweala talked about cushioning the effect of the removal of oil subsidy?

Rubbish! She is sermonising to seduce people to accept the callous oil subsidy removal. Things she promised are palliative, nobody should agree. Labour and Nigerians should make it impossible because you don’t take away what doesn’t exist. We don’t need oil subsidy to build roads, provide water and electricity; vote for capital projects has taken care of that. Degrees don’t guarantee good governance.

Can a school certificate holder rule a nation?

Yes and very well. What degree does Shehu Shagari and Balewa have? School teachers. Winston Churchill was among the dullest in his class and he became one of the greatest British leaders. Degrees don’t make leaders. Leadership is a natural endowment or one acquires it by hard work.
Jonathan wasn’t born great, he said he was born poor. Rubbish! It is a privilege to be born into a wealthy home. I was born into a wealthy home but one can’t control where God puts you. I tell my son that he should not allow the wealth of his father to go into his head because his minister father could as well be a driver. You don’t regret where you were born. So, I didn’t have shoes or wasn’t born great is rubbish. God is not partial. He does things with reasons.

Being born humble is not an issue. How you articulate your humble situation is the issue. That you are born rich doesn’t say you should look down on people. The problem with Jonathan is that though he has Ph.D, he is a brilliant man, but there is a difference between native intelligence and book intelligence. Jonathan is basically brilliant. The danger in that is that such people whenever somebody like Iweala comes talking, they idolise them like mental geniuses and become internally inferior to them. Whatever they say goes –– garbage in, garbage out. He doesn’t have the stamina to challenge them.

For a prince to be advised wisely, he must be wise too. Iweala is not the most brilliant economist. There are hundreds of people more brilliant than she is. Pius Okigbo and Ojetunji Aboyade, they served the nation meritoriously. She is working with somebody psychologically inferior and she will lead him into a ditch. She talks like the president. She once said that government would not negotiate with the Niger Delta militants. Did they not negotiate later? She was paid in dollars when she served in Obasanjo’s cabinet and her monthly pay was N2.8 million and now she is saying oil subsidy is killing the economy. Hypocrite!

If you know that what you are doing is right, convince people in arguments, facts and figures, not by sermonisation. Now, they have hired consultants with millions of naira to convince Nigeria to accept their rubbish. It was done during Shonekan’s time when a Nigerian was given N20mn for public relations job. He collapsed. They have started again. Please, Senators, Honourables of the House of Representatives, throw out this bill. Don’t think and say we are safe in Nigeria. There could be corporate protest here, just like what is happening in the Arab world. If you do anything that will make Nigerians suffer more, they will go on the streets because the suffering is already too much. I can afford things but millions of Nigerians that form the majority cannot. They should know that government is not about commissioning or investment and profits. Government should have moral dimension. Any government that disregards the moral dimension, that is, respect of God, God will punish such for making Nigerians to suffer.

How do you react to the fact that governors have endorsed it and labour has tactically endorsed it with conditions?

All that is nonsense. NLC should represent the masses well. NLC should not give any condition for the consideration of the removal of oil subsidy. Government has ways of compromising labour. When things are hot, they can approach them with millions and buy them over and they will start to talk with double tongues. NLC should be firm. The government should publish the names of those that are importing fuel and government should sign that if it is removed and the effects are not felt between three and six months, then we must dissolve the present government. If they remove oil subsidy, l will lead a protest. I will organise students for demonstration.

Do you still have faith in Nigeria?

My dear young man, if I don’t have faith in Nigeria, I will not be talking to you. I still have faith in Nigeria. To keep Nigeria as one is a task that must be done. We should differentiate between metaphysical Nigeria and political Nigeria. Nigeria is a great country blessed by God. The way we are going, the political Nigeria will destroy the metaphysical Nigeria. Most of those in government are rogues and thieves. They love themselves more than Nigeria. Every Nigerian owes Nigeria more than what Nigeria owes him/her. Nigeria will change for better when we have more statesmen than politicians.

Now, we have a bunch of politicians who only think of the next election while a statesman thinks of the future. Nigeria will collapse if we have more politicians than statesmen. Nigeria is a country where a senator is earning more than the President of America. They even buy government houses. They spend billions on cars and they can’t pay N18,000 minimum wage. They have morally crippled the country and the governance. They will be destroyed by God. Nigeria is a great country –– no natural disaster, there are able men and natural resources. But people are still crying, no job, graduates are driving taxis, doing menial jobs. Many now engage in armed robbery because they have to survive. May God bless us with good leaders.

The worst enemy of Buhari says that Buhari is not corrupt and that is the truth. It takes integrity and rigidity not to be corrupt and lead the nation. You don’t lead like Jonathan. God will punish those that are punishing Nigerians and Nigeria. When the poor man weeps, the tears go to heaven and come down with burning fire and consume his enemies. And that is what will happen in Nigeria.


http://thenewsafrica.com/2011/10/24/oil-subsidy-is-fiction/

http://247ureports.com/2011/11/david-west-‘if-labour-fails-to-act-i-will-lead-demonstrations-against-this-government’/

[size=18pt]David-West: ‘If Labour Fails To Act, I Will Lead Demonstrations Against This Government’
[/size]


Professor Tam David-West, Minister of Petroleum and Energy (1984-1985) and Minister of Mines, Power and Steel (1986), told KELVIN EBIRI in Port Harcourt that the amount spent on importing fuel is more than what is required to build refineries in Nigeria.



HOW much should petrol cost in Nigeria?

Forty to N50 per litre! I told Obasanjo to fix the price of petrol at N50 per litre and see if any filling station would close down. They will never close down; they are making a lot of money. If the business was not lucrative, why is it that petrol stations are springing up everyday? They are ripping Nigerians off.
Does government really subsidise refined petroleum products?
There is nothing like subsidy. The government is lying. So, to talk about removing subsidy is fraudulent. You don’t remove what does not exist.
General Muhammadu Buhari was oil minister before he became Head of State and I became oil minister under him. Both of us have consistently said there is no subsidy on Nigerian fuel. Why do I say so? What is subsidy?
Basically, if a particular essential commodity, say garri in Nigeria, costs N100 per bag, that is when the farmers are producing garri under natural condition and there is no problem. But at a particular time, due to natural causes, the farmers cannot have enough cassava to make enough garri; which means there is no much garri in the Nigerian market.
Thus, government goes abroad to buy garri at N150 per bag. They bring it to Nigeria and still sell it at N100 per bag so that the citizens will not suffer and the government will absorb the extra N50. That is subsidy, pure and simple.
But in the case of petroleum products, there is no subsidy. Why? We have four refineries in the country and if they are working, we will have more than enough fuel in the country. The total capacity of our four refineries is 445,000 barrels per day and if these are refined, we will have more than enough fuel in the country. If these refineries are working at 80 percent efficiency, we will have more than enough.
During General Buhari’s era, we were exporting refined products; we never imported any litre of petroleum products and we had only three refineries. I signed the fourth refinery’s contract in 1984.
They (other governments since then) have killed the refineries. I published my ‘sabotage theory’ of the Nigerian refineries in February 1996: that they were deliberately killing the refineries so that they could import fuel. Now, how can you punish the poor man for your profligacy and corruption?
God has given us crude oil under the Nigerian soil. We have refineries owned by government on this soil. We have petroleum stations all over the place; so, where is the subsidy?
Subsidy comes when you go to the international market and buy the fuel at international price, come here and punish the poor man to pay higher price for fuel, which he is blessed with.
I challenge President Goodluck Jonathan, his oil minister and the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to engage me in a television debate. I have said there is no subsidy and they are saying there is subsidy; now, let them justify it. They are punishing the poor man. They don’t buy fuel; and they eat free.
Please, let the poor man not suffer. If Labour allows them to do this and it does not call for mass strike, I will mobilise the students to go on the street; I will lead a demonstration against the government.
Nigerians should go on the streets and force the government down. If they don’t do that, they should not blame the government but themselves because they cannot assert their rights. Students, everybody, should go on the streets and let us have sanity.
Must the government import fuel? All the presidents after Buhari turned into oil merchants. They are all corrupt oil merchants. Now, ministers have oil blocs; they have petrol stations. They are merely punishing the poor man.
Oil subsidy started during Ibrahim Babangida’s time. And Obasanjo, as president, arbitrarily increased oil price by four times. The then Group General Manager of the NNPC, Engr. Yar’Adua, appeared before the Senate last year and said Obasanjo used to tell them to increase petroleum price.
I challenge Jonathan and all of them to publish the names of those who import fuel into this country. If they publish the names, the country will be ablaze because they are punishing the poor man.

‘Refineries Not Working Because People In Govt Are All Oil Traders’

Interview with Professor Tam David West (continued)


Government has consistently maintained that the low price of petroleum products is discouraging investment in refineries. Is this the situation?

They awarded contracts for 18 refineries but they have not been able to build any because to build a refinery is expensive and no Nigerian has the money to build one. The economic situation in Nigeria is not conducive. They should look for something else to say.
Corruption, stealing, killing are rife. If you want to invest $5 billion, you must be sure that you have another $100 million for bribe in Nigeria.
They (government) are talking nonsense. They said if they remove subsidy, they are going to use the money for infrastructure. Again, this is rubbish. They are lying.
You don’t need removal of petroleum subsidy for infrastructure. Every budget has capital expenditure. Obasanjo gave Anenih billions of Naira for roads; when Obasanjo went to Ogun State, he asked Anenih, ‘where was the money I gave you?’
Subsidy removal has nothing to do with infrastructure, it has nothing to do with unemployment or drugs in the hospitals. I have been a Professor since 1974. I am sad to see graduates serving as stewards in restaurants, driving taxis.
Now, look at the hypocrisy. The governors said they could not pay the minimum wage except they remove the subsidy. But when Jonathan signed the Minimum Wage Bill into law, he never mentioned subsidy. They are all lying.
Why are the refineries not working?
It’s because the people in government are all traders in oil. They don’t love Nigeria, and the poor man; they love themselves. They have sabotaged the refineries.
The first refinery was built in Port Harcourt in 1965. It was destroyed during the Civil War. The Warri Refinery was built in 1978 and Kaduna Refinery in 1980. I signed the contract for the last Port Harcourt Refinery in 1984 and it came on stream in 1986.
Let them bring the people that built the refineries for us to fix them. No, they will not even do that because it will expose that they had sabotaged the refineries. The amount of money Nigeria is spending on importing fuel can build 10 refineries in this country. They are lying to Nigeria.
Nigerian oil is the worst managed globally. Every day Kuwait sells oil; they put aside something for Kuwaitis of the future. They have saved several billions of dollars; that is management. They bought Dorchester Hotel in London. They wanted to get 10 percent of a steel company in the United Kingdom, but the British government cried out loud.
Why has it been difficult to build and/or repair refineries?
The people that are sabotaging the economy are their agents. I told (former Petroleum Minister, Dan) Etete during his time, and he said he needed N250m to repair the refineries. But that year, they imported fuel worth of N900 million. This year again, we have imported fuel worth over N850 billion. Why are they getting money to import fuel and not money to build refineries? The government is not serious.
At worst, refineries can be built in less than three years. Let them build more refineries and be responsible. I still ask them: why is it that during Buhari’s time, we never imported fuel? Why are you importing now?
The people must force the government to build more refineries. You can build refineries in two years. Obasanjo said it’s five years. No. If by 1996 when I wrote the sabotage of the Nigerian refineries, Nigeria had decided to build more refineries, we would have had at least eight refineries. We will never lack.
We are producing over 2.4 million barrels per day and the capacity of our refineries is 445,000 barrels a day. So, build more refineries

‘Our Finance Minister Is Here To Implement IMF Agenda’

Interview with Professor Tam David West (continued):

It appears the subsidy saga is the voice of the people against the determination of government to have its way. Isn’t it?

The Minister of Finance has merely brought an IMF script. She is here to implement IMF programme. Let me extrapolate. During Babangida’s time, when he wanted to take the IMF loan and implement its programmes, over 65 percent of Nigerians said they didn’t want IMF’s policy. He went and took it and the economy collapsed.
Now, let her (Okonjo-Iweala) test her popularity. Let them hold a plebiscite and see how many people will support further implementation of the IMF policy and the so-called removal of subsidy. Removing subsidy is poverty of ideas. Must the poor man suffer?
Look Okonjo’s logic: that the subsidy they are adding does not go to the ordinary people. So, if you remove it, will it go to them? They are going to make the lives of poor Nigerians more miserable. They don’t need to punish the poor man to rule.
Let me tell them: In a democracy, the people’s voice is supreme; the sovereignty of the people is cardinal to democracy. So, Jonathan is wrong to say no going back on subsidy. Is he a dictator? If the country does not want and you insist on going ahead, who are you? The voice of the people is the voice of God.
Let me warn them that the sovereignty of the people is supreme and if they go against it, they will be punished. A government that cannot satisfy the people is irrelevant and must go.
Government is to serve the people and they cannot dictate to the people. They have not produced any statistics to contradict my claim that there is no subsidy. This year alone, a senator said from January to August, Nigeria imported fuel worth over N850 million. At the end of the year, this will hit over a trillion Naira. God will punish all those who make the poor man to suffer and cry.
I can buy petrol for N150 per litre. I will cut down my expenses, but what about the poor Nigerians who can barely feed? Obasanjo increased the price of petroleum products about four times, what impact did it have on the economy? It will have no positive impact on the economy and the poor will suffer more.
They are lying about subsidy. Let them repair the refineries and build more. The Minister of Petroleum denied that Nigeria wants to build three refineries in Indonesia at the cost of $2.8 billion, which is about N400 billion. When the heat came, she denied. How can four newspapers report the story independently and lie?
An Indonesian minister released the information. Was the Indonesian minister lying or our own minister? They should not convert Nigeria into a laboratory of funny economic experiment. If they are not ready to govern, let them get out.
Did IMF exert pressure on the Buhari government to remove subsidy?
Yes, but Buhari refused and insisted he would never take IMF loan and recommendations. Shagari was negotiating for $2 billion loan before he fell from government. The then Minister of Finance, Dr. Onaolapo Soleye and the Secretary to Government, Alhaji Abubakar Alhaji, were discussing with the Paris Club.
Buhari told me: ‘Let them go on talking; I will not take IMF loan.’ Then, he put the question to me: ‘Professor, tell me one country that took IMF loan and conditions that survived?’
He went further to say: “If somebody wants you to borrow money and you said, ‘I don’t want to borrow money’ and the person is pressing you, then, there is something; a catch.”
We were able to make IMF irrelevant. Is IMF behind Buhari’s overthrow?
Is IMF behind Buhari’s overthrow?
History will tell one day. Colonel Gadhafi offered Buhari $4 billion interest-free loan and we refused.

Interview with Professor Tam David West (continued):

HOW did Buhari’s regime meet domestic fuel consumption?

We did not import because we in government were not interested in becoming oil merchants. We had what we called offshore processing. Some major companies signed contracts with us. If, for a particular month, there would be a shortfall of production from our refineries, say one million litres, we would give them crude to go and refine outside, send us one million litres, sell the rest and give us foreign exchange in our account.
We never imported fuel. Petrol was 10k per litre at that time. When we wanted to increase to 15k, we had to sensitize the public for one month. Thanks to Senator Chris Anyanwu, who was the best Energy Correspondent at that time.
We needed money. When Buhari came in, the international community, including IMF, was squeezing him. We needed money and we wanted to use what we had to strengthen the nation. Six months’ salary arrears were paid off. We never borrowed money.

Interview with Professor Tam David West (continued):

But the Jonathan government can also lay claim to needing more money to run the economy?

No. They need money and they are importing fuel worth more than what is required to build refineries. If the refineries are working and we are not importing fuel, there will be sufficient money to run the system and provide basic amenities.
In any case, they already have plenty of money. The increase in the price of petroleum products, which they seek, is because they are buying oil at international market price and squeezing the poor. We never needed money to service our profligacy. Never. Now, they need money to service their profligacy. The poor man is servicing the nation. That is what is happening.

Who wants Obasanjo back?

[size=18pt]Tunde Bakare uses simple arithematic to expose the fuel subsisdy scam:[/size]

Much ado about fuel subsidy

By TUNDE BAKARE -

http://www.vanguardngr.com/2012/01/much-ado-about-fuel-subsidy/


DEFINITION: To subsidise is to sell a product below the cost of production. Since the Federal Government has been secretive about the state of our refineries and their production capacity, we will focus on importation rather than production. So, in essence, within the Nigerian Fuel Subsidy context, to subsidise is to sell petrol below the cost of importation.

The unsubstantiated claims of the Federal Government: The government claims that Nigerians consume 34 million litres of petrol per day. The government has also said publicly that N141 per litre is the unsubsidised pump price of petrol imported into Nigeria. (N131.70 kobo being the landing price and N9.30 kobo being profit.)

Annual cost of importation

Daily Fuel Consumption: 34 million litres

Cost at Pump: N141.00

No. of days in a regular year: 365 days

Total cost of all petrol imported yearly into Nigeria:

Litres Naira Days

34m x 141 x 365

= N1.75 trillion

Cost borne by the consumers

Nigerians have been paying N65 per litre for fuel, haven’t we? Therefore, cost borne by the consumers = Litres Naira Days

34m x 65 x 365 = N807 billion

Cost of subsidy borne by the government: In 2011 alone, government claimed to have spent N1.3 trillion by October – the bill for the full year, assuming a constant rate of consumption is N1.56 trillion. Consequently, the true cost of subsidy borne by the government is: Total cost of importation minus total borne by consumers, i.e. N1.75 trillion minus N807 billion = N943 billion.


Pastor Tunde Bakare

Unexplainable difference: N617 billion. The Federal Government of Nigeria cannot explain the difference between the amount actually disbursed for subsidy and the cost borne by Nigerians (N1.56 trillion minus N943 billion = N617 billion).

Bogus claim by the government: A government official has claimed that the shortfall of N617 billion is what goes to subsidising our neighbours through smuggling. This is pathetic. But let us assume (assumption being the lowest level of knowledge) that the government is unable to protect our borders and checkmate the brisk smuggling going on. Even then, the figures still don’t add up. This is because even if 50 per cent of the petrol consumed in each of our neighbouring countries is illegally exported from Nigeria, the figures are still inaccurate. Why?

World Bank’s figures: populations of West African countries

NIGERIA: 158.4 million

BENIN: 8.8 million

TOGO: 6 million

CAMEROUN: 19.2 million

NIGER: 15.5 million

CHAD: 11.2 million

GHANA: 24.4 million

The total population of all our six neighbours is 85.5 million.

Let’s do some more arithmetic:

a) Rate of Petrol Consumption in Nigeria: Total consumed divided by total population:

34 million litres divided by 158.8 million people = 0.21 litres per person per day.

b) Rate of Petrol Consumption in all our six neighbouring countries, assumed to be the same as Nigeria:

0.2 litres x 85.5 million people = 18.35 million litres per day

Now, if we assume that 50 per cent of the petrol consumed in all the six neighbouring countries comes from Nigeria, this value comes to 9.18 million litres per day.

Pathetic absurdity: There are two illogicalities flowing from this smuggling saga.

*If 9.18 million litres of petrol is truly smuggled out of our borders per day, then ours is the most porous nation in the word. This is why: The biggest fuel tankers in Nigeria have a capacity of about 36,000 litres. To smuggle 9.18 million litres of fuel, you need 254 trucks. What our government is telling us is that 254 huge tankers pass through our borders every day and they cannot do anything about it. This is not just acute incompetence, but also a serious security challenge. For if the government cannot stop 254 tanker trailers from crossing the border daily, how can they stop importation of weapons or even invasion by a foreign country?

*Second illogicality: Even if we believe the government and assume that about 9.18 million litres is actually taken to our neighbours by way of smuggling every day, and all this is subsidised by the Nigerian government, the figures being touted as subsidy still don’t add up. This is why: Difference between pump price before and after subsidy removal = N141.00 – N65.00 = N76.00. Total spent on subsidizing petrol to our neighbours annually = N76.00 x 9.18 million litres x 365 days = N255 billion.

If you take the N255 billion away from the N617 billion shortfall that the government cannot explain, there is still a shortfall of N362 billion. The government still needs to tell us what/who is eating up this N362 billion ($2.26 billion USD).

Illogical assumptions

*We have assumed that there are no working refineries in Nigeria and so no local petrol production whatsoever – yet, there is, even if the refineries are working below capacity. ii) Nigeria actually consumes 34 million litres of petrol per day. Most experts disagree and give a figure of between 20 and 25 million litres per day. Yet there is still an unexplainable shortfall even if we use the exaggerated figure of the government.

*Ghana, Togo, Benin, Cameroun, Niger, and Chad all consume the same rate as Nigeria and get 50 per cent of their petrol illegally from Nigeria through smuggling. These figures simply show the incompetence and insincerity of our government officials. This is pure banditry.

Fact: The simplest part of the fuel subsidy arithmetic will reveal one startling fact: That the government does not need to subsidise our petrol at all if we reject corruption and sleaze as a way of life. Check this out:

*NNPC crude oil allocation for local consumption = 400,000 barrels per day (from a total of 2.450 million barrels per day).

*If our refineries work at just 30 per cent, 280,000 barrels can be sold on the international market, leaving the rest for local production.

*Money accruing to the Federal Government through NNPC on the sale, using $80/bbl – a conservative figure as against the current price of $100/bbl – would be $22.4m per day. Annually this translates to $8.176bn or N1.3 trillion.

*The government does not need to subsidise our petrol imports – at least not from the Federation Account. The same crude that should have been refined by NNPC is simply sold on the international market (since our refineries barely work) and the money is used to buy petrol. The 400,000 barrels per day given to NNPC for local consumption can either be refined by NNPC or sold to pay for imports. This absurdity called subsidy should be funded with this money, not the regular FGN budget. If the FGN uses it regular budget for subsidising petrol, then what happens to the crude oil given to NNPC for local refining that gets sold on the international market?

Tactical blunder

The Federal Government is making the deregulation issue a revenue problem. Nigerians are not against deregulation. We have seen deregulation in the telecom sector and Nigerians are better for it, as even the poor have access to telephones now right before the eyes of those who think it is not for them. What is happening presently is not deregulation but an all-time high fuel pump increase, unprecedented in the history of our nation by a government that has gone broke due to excessive and reckless spending largely on themselves. If the excesses of all the three tiers of government are seriously curbed, that would free enough money for infrastructural development without unduly punishing the poor citizens of this country. Let me just cite, in closing, the example of National Assembly excesses and misplaced spending as contained in the 2012 budget proposal:

Number of Senators 109

Number of Members of the House of Representatives 360

Total Number of Legislators 469

2012 Budget Proposal for the National Assembly N150 billion

Average Cost of Maintaining Each Member N320 million

Average Cost of Maintaining Each Member in USD $2.1 million/year

Time has come for the citizens of this country to hold the government accountable and demand the prosecution of those bleeding our nation to death. Until this government downsizes, cuts down its profligacy and leads by example in modesty and moderation, the poor people of this country will not and must not subsidise the excesses of the oil sector fat cats and the immorality precipitate fiscal scandal of the self-centred and indulgent lifestyles of those in government.

Here is a hidden treasure of wisdom for those in power while there is still time to make amends:

PROVERBS 21:6&and7

“Getting treasures by a lying tongue is the fleeting fantasy of those who seek death. The violence of the wicked will destroy them because they refuse to do just.”

A word of counsel for those who voted for such soulishly indulgent leadership: “Never trust a man who once had no shoes, or you may end up losing your legs.”

This is the conclusion of the matter on subsidy removal: i) “If a ruler pays attention to lies, all his servants become wicked.” (Proverbs 29:12)

ii) “The Righteous God wisely considers the house of the wicked, overthrowing the wicked for their wickedness. Whoever shuts his ears to the cry of the poor will also cry himself and will not be heard.” (Proverbs 21:12&13)

Thanks for your attention. God bless you all.

Pastor Bakare was CPC’s vice presidential candidate in 2011

Annual cost of importation

Daily Fuel Consumption: 34 million litres
Cost at Pump: N141.00
No. of days in a regular year: 365 days
Total cost of all petrol imported yearly into Nigeria:
Litres     Naira     Days
34m     x 141     x 365
= N1.75 trillion
Cost borne by the consumers
Nigerians have been paying N65 per litre for fuel, haven’t we? Therefore, cost borne by the consumers =     Litres     Naira     Days
34m     x 65     x 365
= N807 billion

Misplaced spending in the budget

Let me just cite, in closing, the example of National Assembly excesses and misplaced spending as contained in the 2012 budget proposal:
Number of Senators 109
Number of Members of the House of Representatives 360
Total Number of Legislators 469
2012 Budget Proposal for the National Assembly N150 billion
Average Cost of Maintaining Each Member N320 million
Average Cost of Maintaining Each Member in USD $2.1 million/year

^^
It is almost impossible not to resort to assumptions and there is so much corruption and deceit that you can not get an accurate estimate of volume of daily exports.
Bakare therefore based his calculation on the most conservative estimates from information that NNPC publish.

Compare prices of other OPEC member countries , yet our corrupt deceitful governments are telling us they are subsidising fuel

Remember the glorious 20.

Twenty brave Nigerians were killed during fuel price protests.

These heroes put their lives on the line to try and end corruption.

make we shine our eyew well well