From Governor of Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi, came a warning yesterday that Nigeria is heading for serious economic crisis. His warning followed his disclosure that the country lost $16 billion to subsidies this year.

Sanusi said as a result, Nigeria’s foreign reserves had been depleted such that serious economic crisis would befall the nation if the oil prices crash continues in the international market. He said that withdrawal of subsidy on fuel would stave off the crisis.
“Our shock absorber is gone. If the oil prices crash again, then Nigeria will now face a serious economic crisis,” he said.

Sanusi spoke in Lagos at the opening of a two-day Town Hall meeting on the controversial proposed fuel subsidy removal. The parley was organized by the Newspaper Proprietors’ Association of Nigeria (NPAN). Sanusi said Nigeria lost $16 billion on subsidy this year, revealing that the total amount of money in the foreign reserves was $200, 000 short of the spent sum.

The CBN helmsman said that without fuel subsidy removal, the next administration would be saddled with a debt burden that would be difficult to manage. Sanusi expressed worry that a significant number of subsidized products were diverted to neighbouring countries by some dubious marketers and their cronies. He said the unwholesome practices of some marketers have turned the industry to a cash cow, with companies filing outrageous claims to the tune of 15 fuel-laden vessels.

Also speaking, the Coordinating Minister for the Economy and Finance Minister, Dr. Ngozi Okonjo-Iweala said government had resolved to deregulate the downstream sector of the oil and gas industry and that the delay, was only temporary, to allow for dialogue and a proper enlightenment of citizens on the benefit of the policy, especially as it affects the removal of subsidies enjoyed on both petrol and kerosene. Government, she said, did not want to appear dictatorial, hence, the resolve to embark on public enlightenment to earn trust and confidence prior to the policy execution.

“The current subsidy regime does not benefit the poor in Nigeria. It is the better-offs in the society who benefit the more from it,” said Okonjo-Iweala, “Between January and October this year, we’ve spent over N1.3 trillion being borrowed and it is used to subsidize petroleum products consumed mostly by the upper and middle classes who own the big cars, SUVs, jeeps, and not the poor who ride bicycles and motorcycles. We have to put an end to subsisy,” she added.

The minister said the current fuel subsidy regime was responsible for the large-scale corruption in the petroleum downstream sector as witnessed in the smuggling of refined products to neighbouring countries of Niger, Togo, Ghana, Benin and Cameroon. The quest to sustain the subsidy policy, Okonjo-Iweala said, had also forced government into massive borrowing. But labour leaders, Peter Esele of the Trade Union Congress (TUC) and Isa Aremu of the Nigeria Labour Congress (NLC)as well as right activists Femi Falana and Olisa Agbakoba, faulted the Finance Minister, saying deregulation will worsen the poverty situation in the country.

Aremu specifically expressed grave cynicism over government ability to translate the gains from subsidy removal to the betterment of citizens, if eventually allowed. Deregulation, he said, would have been best appreciated under a atmosphere where the nation had functional refineries and not a net importer of petroleum products as it is currently being experienced.“Our fear is that if we allow the government to remove subsidies, it is not going to be a win-win situation for government and citizens. Removing subsidy will worsen the poverty situation in this country because inflation will go up. And we are not prepared for this,” Aremu said.

“Government has been responsible for the distortions in the market, for the poor state of the local refineries which has forced us to be importing fuel as we are doing. This inefficiency cannot be pushed to the masses. Why are our refineries not working? Who is responsible for the failure? Why are they not persecuted?
“Nigerians will resist attempts by this government to force citizens to pay higher prices for petroleum products imported from outside the country while we could have paid cheaper if we had our refineries working. It is time we compel the government to work. Let us have refineries so that we produce what we have and consume what we produce. It is an issue of good governance and not fuel subsidy removal,” Aremu added.

Petroleum Resources Minister, Diezani Alison-Madueke said government was concerned about the impact the removal of subsidy will have on the economy and citizens and has taken steps to ameliorate such hardships.
He said efforts were ongoing in fixing some of the infrastructure especially roads and the local refineries. According to her, the original contractors who built the refineries had been brought back to carry out their Turn Around Manitenance (TAM), a development that has resulted in a 50 – 60 per cent increase in the capacity utilization of the four-state-owned refineries. She said, hopefully, in the next 18 months, the situation would be better.

But she cautioned,” It is not in the best interest of the government to remain in the business of refining petroleum products in Nigeria. Government will be better in holding equity but we will have to allow the private sector do this. We need to deregulate; we need to upon up if we must grow.” Alision-Madueke said the benefits of the deregulation policy was being worked out and expressed strong optimism that the masses will be better-off with the policy.

According to the minister, the government had agreed to set up a board to manage the proceeds that will accrue from the deregulation policy. The board will be constituted by the President and would comprise eminent and reputable Nigerians drawn from all sphere of work and from the six geo-political zones.

“I can assure that deregulation benefits are being worked out by the government,” She said. “We are also carrying out changes in the regulatory agencies like the PPPRA and DPR to ensure they meet up with the challenges of the policy. we are all working for the poor in our country and we need the support of all,” she added.

Source; http://www.sunnewsonline.com/webpages/news/national/2011/dec/23/national-23-12-2011-001.html

Thus says the most intelligent man in Nigeria. Now, will you all heed to GEJ's wish?

This man really knows his stuff.
He really wants the best for Nigeria. . . .unlike the MAJOR crooks we have around Nigeria.
Nigeria has oil subsidy and the country looks like hell?
Nigerians are getting poorer and poorer as the oil subsidies go into awon OBJ's pockets!

Arrrrantus Nonsensicus!!!!

Now, even his most critics are falling on his path. They are quickly to refer him as "Most Intelligent Man(MIM)" in Nigeria when they are on thesame side with what he said and easily crucify him as"Sharia Apologist", when his ideas contradict their deep rooted hatred or believe. When SLS cried out on the consequency of spending more 75% of our budget on re-current expenditure and feeding the "fat cows" at Aso Villa and oiling the useless legislative machines, they threaten him with sack. Cherry picking at its peak!

Why must the brunt of excessess of the corrupt ruling class be transfer to the masses? The presidency alone is using more that 1 billion Naira to feed her self, 7 billion naira as travelling allowances alone, while the average take home pay per senator is more than twice the annual salary of US president. When the president openly said leaner government is not possible? When he went ahead to create more political offices instead of trimming them down? When he sees nothing wrong in buying three brand new jets at a go [/b]even when the economy is facing serious depression?

[b]Is saving the 600 billion naira spent on fuel subsidy that would stop the economy from crashing? Nigeria indeed, is a country of foooools lead by ediots!

Sanusi is definitely surrounded and I feel sorry for him,does he really believe what he said or just waffling for self preservation.
He talked about not devaluing the naira,he caved, and now this soggy_talk!.
The labour movement should keep a close tab on Okonjo.
She's the brain behind this incoherent policy and these shifty, senseless explanations.
Fix the damn refineries to full capacity or take a stepped approach to subsidy removal and show us where the first cut went like some proposed earlier.
Nobody trusts the system hence the present course of action will not sell.

Ufeolorun:

Sanusi is definitely surrounded and I feel sorry for him,does he really believe what he said or just waffling for self preservation.
He talked about not devaluing the naira,he caved, and now this soggy_talk!.
The labour movement should keep a close tab on Okonjo.
She's the brain behind this incoherent policy and these shifty, senseless explanations.
Fix the damn refineries to full capacity or take a stepped approach to subsidy removal and show us where the first cut went like some proposed earlier.
Nobody trusts the system hence the present course of action will not sell.
 

Do you know how long it will take to completely achieve that even if the government starts today?

Before it is done, im sure at least 18 months must have gone and vam! $24bn dollars will be gone by then and if we are ever caught in the oil prices crash during that period, you will all move to benin republic and start doing barbers and shoe makers.

sadly, while sanusi means well, the rest of gej's team, in particular our bejeweled minister and nnpc chairman, most certainly do not.

onye_ngbu*:

Do you know how long it will take to completely achieve that even if the government starts today?

Before it is done, im sure at least 18 months must have gone and vam! $24bn dollars will be gone by then and if we are ever caught in the oil prices crash during that period, you will all move to benin republic and start doing barbers and shoe makers.

with the incompetent shoeless glutton in aso rock, even if prices do not crash, even if the subsidy goes through, it wil stil be more of the same.

we can se the gej apologists trying to pull the wool over our eyes by linking projects that are previously underway/in development to subsidy removal

Is sanusi trying to scare us? As far as most NIgerians are concerned it can't get worse so BRING IT ON!
Fuel subsidy is the only thing they have and are ready to persih with it!
I listened to Sanusi yesterday and he sounded convincing but his whole argument about the cabal and corruption doesn't help the fuel subsify argument. What if the same cabal and corrupt people steal the savings, what if refineries are still not built?

I'd say to Mallam Sanusi that for most Nigerians, all they are saying is we don't care what happens!

on a lighter note, Sanusi is really brilliant so also is Oshiomhole. I think Diezeani is holding a job that is beyond her pay grade and brain.

@sanusi,
na u, ur family and your generations unborn will perish and not us. if you are not stupid and partial in ur reasoning, why was cecilia ibru the only person and oceanic bank the only bank that faced your war? because u are working for jonathan, why won't u say rubbish. where are all the recovered loots of abacha and what is the assurance that the oil subsidy money will not go the same way abacha money went? if you and ur jonathan are sure of what u are saying, how many people have u arrested or questioned over this oil subsidy fraud? how much does it cost to get our own refineries and talk no more about subsidy since this is a product we have and will refine. how on earth will the oil subsidy money solve all the problems of nigeria will all the criminal activities in aso rock? if you are as intelligent and innocent as u claim, why is nigeria running the most expensive democracy in the world? where on earth have u seen two families spend N1B on feeding alone? if we are in a democratic country, why is the voices of few over-powering the voices of many? u all preach one thing and u do another. is jonathan going to spend N1b eating cassava bread. if you all go ahead and remove this subsidy, hell will be let loose and ur generations will never ever know happiness no matter where they are.

This man really knows his stuff.
He really wants the best for Nigeria. . . .unlike the MAJOR crooks we have around Nigeria.
Nigeria has oil subsidy and the country looks like hell?
Nigerians are getting poorer and poorer as the oil subsidies go into awon OBJ's pockets!

Arrrrantus Nonsensicus!!!!

\

@lasinoh,
if this oil subsidy is going to obj's pocket, what is pdp and jonathan  doing about that and when they remove it, who told u that obj will not go and collect it from them? have u ever asked urself, how or in what ways have we benefited from the recovered loots of abacha? what is the need of recovering funds and stealing the same funds again?  if we have our brains intact, the question here is, how much are we buying fuel now and how much are going to buy the fuel when the subsidy is removed? are we surposed to import fuel? why is jonathan not discussing the means of fixing refineries and the subsidy will die a natural death instead of bribing and lobbying ppl to support this devilish idea of putting nigerians into serious hardship.
if a bus driver buys fuel at n141 and pays toll gate, who bears the pains? is it not the passengers?
do u think these rulers are paying for electricity and fuel?
a senator here is earning more than american president, while the masses hardly eat once in a day. if jonathan is what he claims, how is he trying to stop politics from been the most lucrative profession/business in nigeria? how many unresolved fraud cases do we have with efcc? why is jonathan doing nothing abt looting of public funds? why do u think this is not david mark's turn to steal all the oil subsidy money and start going to court once in 1 year? pls use ur brain. these men are evil and in no way, wish us good.
with the type of hardship nigerians will face as soon as fuel subsidy goes, crime will be the order of the day.
if jonathan is been truthful about these things, why didn't he use this fuel subsidy removal during his campaign?
God will surely put them to shame.
how can everybody be talking about cabals as if they are spirits? why are the cabals not facing the laws of the land? if they are above the law, what is the assurance that they will not collect the money from these powerless president?
where on earth do u know a criminal and u still let him steal and go free apart from nigeria? is jonathan not aware that his wife has a criminal record? how can he be talking about cabals when he is married to a member of the cabals.
shame to those who believe these criminals.

With(out) due respect, Okonjo-Iweala is either ignorant or extremely dishonest and/or deluded. What does she mean by "only the upper and middle classes enjoy subsidy" - because they own "SUVs, Jeeps". That is m.o.ro.n.i.c for want of a better word. If she hasn't lost touch with reality because of her privileged position, she would know that transport costs (including buses, 'Okadas', taxis, 'Keke Napeps' etc) would all rise astronomically if fuel subsidies are removed. This would not only affect the poor directly, but would also affect them indirectly by way of higher prices for foodstuffs and sundry items and services that are dependent on transport/fuel costs. Besides, removal of subsidies on kerosense would result in higher food/cooking prices for the common man (afterall, do the upper and middle classes use kerosene for domestic cooking?). The implication of this ill-conceived policy would be too tragic for most ordinary Nigerians. Unfortunately, most of us are too selfish and self-centred to empathize with the travails and daily struggles of the masses. That explains why we are are so indifferent to the looming catastrophe that subsidy removal represents.

Oshiomole has said everything I would have said here today. Governance is not a matter of sermonizing, it is about action. I am also speaking from experience.

We the masses would be the greatest fools if we allow subsidy removal. Let the economy crash for our politicians and their cronies. It has already crashed for many of us and we are unafraid of the picture the government is painting for us if subsidy remains. Finally, the thieving rogues in power are running out of money to steal and want us to give them more money that they can steal. We should NEVER allow them have it!

1025:

@sanusi,
na u, your family and your generations unborn will perish and not us. if you are not silly and partial in your reasoning, why was cecilia ibru the only person and oceanic bank the only bank that faced your war? because u are working for jonathan, why won't u say rubbish. where are all the recovered loots of abacha and what is the assurance that the oil subsidy money will not go the same way abacha money went? if you and your jonathan are sure of what u are saying, how many people have u arrested or questioned over this oil subsidy fraud? how much does it cost to get our own refineries and talk no more about subsidy since this is a product we have and will refine. how on earth will the oil subsidy money solve all the problems of nigeria will all the criminal activities in aso rock? if you are as intelligent and innocent as u claim, why is nigeria running the most expensive democracy in the world? where on earth have u seen two families spend N1B on feeding alone? if we are in a democratic country, why is the voices of few over-powering the voices of many? u all preach one thing and u do another. is jonathan going to spend N1b eating cassava bread. if you all go ahead and remove this subsidy, hell will be let loose and your generations will never ever know happiness no matter where they are.


@lasinoh,
if this oil subsidy is going to obj's pocket, what is pdp and jonathan  doing about that and when they remove it, who told u that obj will not go and collect it from them? have u ever asked urself, how or in what ways have we benefited from the recovered loots of abacha? what is the need of recovering funds and stealing the same funds again?  if we have our brains intact, the question here is, how much are we buying fuel now and how much are going to buy the fuel when the subsidy is removed? are we surposed to import fuel? why is jonathan not discussing the means of fixing refineries and the subsidy will die a natural death instead of bribing and lobbying ppl to support this devilish idea of putting nigerians into serious hardship.
if a bus driver buys fuel at n141 and pays toll gate, who bears the pains? is it not the passengers?
do u think these rulers are paying for electricity and fuel?
a senator here is earning more than american president, while the masses hardly eat once in a day. if jonathan is what he claims, how is he trying to stop politics from been the most lucrative profession/business in nigeria? how many unresolved fraud cases do we have with efcc? why is jonathan doing nothing abt looting of public funds? why do u think this is not david mark's turn to steal all the oil subsidy money and start going to court once in 1 year? pls use your brain. these men are evil and in no way, wish us good.
with the type of hardship nigerians will face as soon as fuel subsidy goes, crime will be the order of the day.
if jonathan is been truthful about these things, why didn't he use this fuel subsidy removal during his campaign?
God will surely put them to shame.
how can everybody be talking about cabals as if they are spirits? why are the cabals not facing the laws of the land? if they are above the law, what is the assurance that they will not collect the money from these powerless president?
where on earth do u know a criminal and u still let him steal and go free apart from nigeria? is jonathan not aware that his wife has a criminal record? how can he be talking about cabals when he is married to a member of the cabals.
shame to those who believe these criminals.

you spoke my mind.

maclatunji:

Oshiomole has said everything I would have said here today. Governance is not a matter of sermonizing, it is about action. I am also speaking from experience.

We the masses would be the greatest fools if we allow subsidy removal. Let the economy crash for our politicians and their cronies. It has already crashed for many of us and we are unafraid of the picture the government is painting for us if subsidy remains. Finally, the thieving rogues in power are running out of money to steal and want us to give them more money that they can steal. We should NEVER allow them have it!

You are so right on point on the bolded! We may need to pull down to rebuild this country again. I see the "Arab opportunities" beckoning and we must take them when they show up.

It sickens me each time I hear of a cabal holding our government to ransome. What worse pointer to incomeptence and inefficiency can we ever come by? There's the Police, the Customs, the Immigrations, the SSS, the various intelligence agencies with fat allocations for doing nothing and it is the masses that should suffer for their inefficiencies. How about the Refineries they are just not talking about? OMG! I am having running stomach on this issue!!!

To Sanusi Lamido Sanusi - it is you and your family that will perish!!!! Stupid fool running his mouth like a politician.

So is Sanusi assuring Nigerians that the depletion of the Nation's foreign Reserve would be curtailed if Petrol Subsidy is Removed?

@1025, i always like reading thru your posts.

@1025

where on earth have u seen two families spend N1B on feeding alone? if we are in a democratic country, why is the voices of few over-powering the voices of many? u all preach one thing and u do another. is jonathan going to spend N1b eating cassava bread. if you all go ahead and remove this subsidy, hell will be let loose and your generations will never ever know happiness no matter where they are.

if this [b]oil subsidy is going to obj's pocket, what is pdp and jonathan  doing about that and when they remove it, who told u that obj will not go and collect it from them?[/b] have u ever asked urself, how or in what ways have we benefited from the recovered loots of abacha? what is the need of recovering funds and stealing the same funds again?

Hmmm?? OBJ,

why do u think this is not david mark's turn to steal all the oil subsidy money and start going to court once in 1 year? pls use your brain. these men are evil and in no way, wish us good.

Hmmm

Scaremonger Sanusi
Why dont you get GEJ,the political class&other arms of govt to remove the subsidies you chaps enjoy 1st?
Free accomodation,medical attention,estacodes etc should be removed from the life of luxury you vampires indulge in& see if the economy wont grow.
The problem of Nigeria's economy is her parasitic elite not fuel subsidy.
Was it not their greed that precipitated the banking crises?
Are they not the cabal who have inflated the subsidy?
Fix yourselves(elite) or the people will fix you.

This is the right time for the masses to protest

Sanusi can only argue well on d economic angle of d subsidy removal. Yes d govt needs 2 pay d new minimum wage, needs more money 4 infarstru, d ecomomy might end end up like grecce etc but avoided d political angle of it which is solvin d corruption in da oil industries and y d govt cant cut down recurrent cost. Also avoided d social angle of it which is high cost of living, lost of jobs, increase in inflation. And also y oda alternatives cant be considered.
The govt has made up their mind already, 2 bad.

@1025,
Tank u bro.u r one of d few not carried away by sanusi's diversionary arguement.

I DONT SEE SANUSI AS THE MOST INTELLIGENT MAN IN NIGERIA, THERE ARE THOUSANDS OF NAIRALANDERS AND NIGERIANS BOTH HOME AND ABROAD THAT ARE MUCH MORE SOUND THAN THIS MAN WHO SAYS THE COUNTRY THAT FEEDS HIS FAMILY FROM WITH THE FAT SALARY HE RECEIVES WILL PERISH, NIGERIA WILL NEVER PERISH IN THE NAME OF GOD, BUT HE WHO SAYS A NEGATIVE WORD ABOUT NIGERIA WILL PERISH,

NOW LET US DO DIS SIMPLE ARITHMETIC AND LETS SEE WHETHER NIGERIA WILL NEED TO BORROW AGAIN AND BECOME RICHER, because i no too go school??

BEFORE THEY (LEADERS) CAME INTO POWER THEY CLAIM TO LOVE NIGERIANS AND PROMISE TO SERVE WITH ALL THEIR HEART,

IF THEY TRULY DID, CAN THEY DO THIS FOR US

1. CUT  SANUSI , GOODLUCK, NGOZI, PERM.SECS,SENATORS,MINISTERS,GOVERNORS,LG CHAIRMEN AND OTHERS SALARIES BY 50%, e.g if as a loving leader in Nigeria u earn N500,000, it should come down to N250,000 on and on like dat,

2. WHERE ARE THE MONEY STOLEN MY GEN. SANNI ABACHA, DIMEJI, GBENGA DANIEL,IYABO-OBASANJO AND OTHERS

3. MINISTERS OF STATES SHOULD BE SCRAPPED, PERSONAL ASSISTANTS SHOULD REDUCED
4. OUR TOLL-GATE CAN START OPERATIONS BACK BUT THE RATE SHOULD BE BETWEEN N20 AND N50(I SWEAR NIGERIANS WILL BE WILLING TO PAY AND WE WILL MAKE LOTS OF MONEY FROM IT, "FASHOLA PROPAGANDIST, take note of this pls"

5. COMPANIES SELLING GENERATORS E.G MIKANO SHOULD BE MADE TO PAY MORE INTERMS OF TAXES,

, I ve lots of suggestions.to be continued NairaLanders what do u think?

Sanusi actually called the government incompetent, he said with the present crop of people we have, the refineries will not work, what we need to ask is what is the government good at doing for the benefit of the masses.

Bye bye to fuel subsidy.

If Sanusi's explanation seems to be convincing to Nigerians, I guess GEJ needs to utilize his 'power' of persuasion fast. Place Sanusi in the centre of it all and get the buy-in of the big critics. At the end of the day, the important thing is that this wasteful subsidy is removed successfully.

onye_ngbu*:

Do you know how long it will take to completely achieve that even if the government starts today?

Before it is done, im sure at least 18 months must have gone and vam! $24bn dollars will be gone by then and if we are ever caught in the oil prices crash during that period, you will all move to benin republic and start doing barbers and shoe makers.

Guy, leave story, we insist they fix the refineries first and we don't care how long it takes them.

If we end up like Greece and get worse off to the extent of being Barbers in Benin Republic, we would then be hungry and angry people. You and I know what hungry people can do. We will chase them into the hole and recover all our stolen wealth. The reason we are suffering and smiling is because a lot of us still have means of survival. If survival is in jeopardy, even the big-mouthed Sanusi and his paymasters are not safe! The dogs will chase after the lions!!!

what baffles me most is that they were all saying cabal this cabal that even when the very cabals were present at the forum the likes of Otedola and co still no one could mention their names.

The conspiracy theory is on again as it will ever be. Lies upon lies, after all the Bible said, it is from the poor that riches will flow into the hands of the wealthy. Personally, I have always doubted if GOD ALMIGHTY is the one who inserted that verse in the Holy Book!!!

The issue of subsidy can be simply summed up as follows:

-There is no responsible leadership in Nigeria
-There is admission of total failure of government to perform the basic duty such as stopping exploitation, corruption, wastage, leakages and self-enrichment at the expense of the masses.
-Leader want sacrifice to perpetually be made by followers without corresponding it.
-There is extreme dishonesty, selfishness, greed, avarice and incompetence in government
-People welfare and interest does not exist in the formulation of socio-economic and political policies
-There is general complacency and apathy in the country to the extent that government feeds on it
-There is no definition of governance and its purpose in Nigeria.
-There is total lack of empathy in Nigerians.

People think the fuel subsidy issue is simply an economic one and I wonder if they truly understand that there is no economy without people. Economic development of any country centres around the capacity and the capability of the people to produce for themselves and for others.

When people are not developed, not empowered, not healthy, not induced to produce and incapable of eking out a living, I wonder what economy we are talking about.

So Nigerian government want her undeveloped, unempowered, unhealthy and uneducated people to pay more for fuel. The issue is not to look at yourself but to look at the larger picture. Where will these people get the money to pay for increased price of fuel?

The unimplemented minimum wage is 18,000 naira. I doubt if 10% of the working population both in the public and private as well as informal sector earns an average of 100,000 naira in a month.

I believe you are all discerning Nigerians, begin to do the maths using the following parameters:

Accomodation, Transport, Feeding, Schooling, Medicals, Dependants (transfer payments), Bills (PHCN, Water, Waste Management, etc), Charges and Taxation (of various forms), Subscriptions (Internet, oh u think the rate will not change, DSTV, Mobile Telecom Services, etc), Leisures, cost of production and provision of services. (You can add more)

If you are capable of critical or lateral thinking, you should be alarmed of what is coming once the subsidy is removed without doing only one thing: REDUCE THE COMPLETE DEPENDENCE ON FUEL (PMS) CONSUMPTION BY NIGERIANS FOR PRACTICALLY ALL ENDEAVOURS.

To do this need no rocket science only political will to:

-Combat economic saboteurs in the name of cabal
-Make Electricity constant and stable
-Reduce cost of governance in terms of paraphenalias, allowances, estacodes, security votes, privileges, and other egoistic entitlements to public officials (career, elected and appointed)
-Plug leakages and stop wastages

-Harness otherl resources for growth and development.

No government, I repeat, if you like be an Okonjo Iweala, can create employment by voting funds into job creation. People creates jobs when they are empowered, educated, healthy, and given conducive environment. One reason, Okonjo Iweala thrive and excel in USA, not that she is special. One reason, Nigerians in diaspora succeeds and live a better life.

Sadly, one truism about promise is that it is only the person doing the promise that knows about and guarantee its fulfilment. So trusting on promise particularly from an established unreliable source (such as FG) is like mortgaging ones soul.

Unfortunately, we Nigerians lack capacity for empathic act and resolution because we are so deluded with the promises of political, economic, tribalistic, religious and social inclinations. One reason, government has never been responsible and accountable.

Our attitude has always usually been once it gets tough, the tough gets going forgeting that in a society, all is not tough, there are the weak and the meek. It is the natural duty of the tough and the strong to provide for and protect the weak and the meek. This natural duty is what all Nigerians have fallen short of doing, most especially since democracy took hold.

I wonder what happened to the spirit that enabled us to drive the military out of power, student unionism has become student cultism, Labour Unions think fighting for ridiculous minimum wage is the centre of their existence, other than fuel pricing, I have not seen Labour protest over unsavoury laws and policies or government official misdemeanour or gross incompetence,

We have sold our souls to the devil for money and so everything is monetised or is it commercialisation or privatisation you people call it. No one threatens another with heaven will fall, if it does, all will be affected. You can learn from tsunami and hurricane.

The wealthy ones parading the corridors of Lekki thought they are too big and special to fight a common government exploitation of tolling Lekki expressway because of "I can conveniently afford it" mentality. But they will soon realise that it is not funny to be paying to access your own home. Even the richest man in the world doenst pay to enter his dwelling place!!!

Nigerians, old and young, male and female, poor and rich, royal and servile will decide their own fate. Not GEJ, or OBJ or IBB or any of the persons in government. Like they do elsewhere. Otherwise you and me may get away with it now, our children might not. The fact that you can afford to do certain things does not mean your offsprings will afford it.

So whether you support or against the fuel subsidy removal, think out of the box and look around you. The other time, I was in Ikeja along Bishop Oluwole Street (Guiness area) around 5pm working day I saw an exodus of young Nigerian male and female, trekking from the companies they work as factory hands to their different homes, some trek as far as Agege and Iyana Ipaja.

If you doubt me, do your own investigations. Now with what they earn they cannot afford to commute in a bus, imagine post subsidy removal. I once told a group of friends that I will not be surprised if the civil unrest upon the subsidy removal start from the bus stops and motor parks. Many times I have met people begging for transport fares, I dont know about you.

I wonder how many Nigerians having access to internet now will continue to have that access readily when subsidy disappears. Like I stated earlier, dont think about yourself alone.

I hate subsidy regimes on products and services as they are run in Nigeria. The Government says an exposed 'cabal' are the sole beneficiaries of the Fuel subsidy regime, yet nothing is done to this cabal. They think its right to punish us all for the sins of this few. WE are waiting, we are counting, we know those who are against us and our survival, we shall demand for change in the system as well as protect our only guaranteed rights to self survival as citizens of the Federal Republic of Nigerians from GEJ and his fellow elitist citizens of the government of the Federal Republic of Nigeria, Egypt, Morrocco, Libya, go be childs play. Make dem bold enough to announce the date for the removal and see wetin go happen.
The money dem dey loot no collapse Nigeria na the de one wey masses dey get na him go crash Nigeria, we dey wait.

pro01:

With(out) due respect, Okonjo-Iweala is either ignorant or extremely dishonest and/or deluded. [b]What does she mean by "only the upper and middle classes enjoy subsidy" - because they own "SUVs, Jeeps". That is m.o.ro.n.i.c for want of a better word. If she hasn't lost touch with reality because of her privileged position, she would know that transport costs (including buses, 'Okadas', taxis, 'Keke Napeps' etc) would all rise astronomically if fuel subsidies are removed. [/b]This would not only affect the poor directly, but would also affect them indirectly by way of higher prices for foodstuffs and sundry items and services that are dependent on transport/fuel costs. Besides, removal of subsidies on kerosense would result in higher food/cooking prices for the common man (afterall, do the upper and middle classes use kerosene for domestic cooking?). The implication of this ill-conceived policy would be too tragic for most ordinary Nigerians. Unfortunately, most of us are too selfish and self-centred to empathize with the travails and daily struggles of the masses. That explains why we are are so indifferent to the looming catastrophe that subsidy removal represents.

You do have a point that inflation would creep up and poor people will get stung but I’m afraid she’s also right! The person that consumes the most will also benefit the most from fuel subsidy. For example:

Mr X, Mr Y, and Mr Z decide to go on a 1000 mile trip. Mr X drives a Honda Civic that gets 35 miles to a gallon. Mr Y drives an H2 Hummer that gets 15 miles to a gallon. Mr Z decides to fly on a plane that uses 0.171 gallons per mile.

For the trip,
1. Mr X would use 28.57 gallons of fuel.
2. Mr Y would use 66.67 gallons of fuel.
3. Mr Z would use 5848 gallons of fuel (assuming he’s the only person on the plane like the current crop of Nigerian billionaires).

If the landing cost of fuel is NGN130 and the govt subsidizes 50% of every gallon of fuel sold, then

Mr Z would have consumed NGN 380,120.00 of subsidy Naira for the trip
Mr Y would have consumed NGN 4,333.55 of subsidy Naira for the trip
Mr Z would have consumed NGN 1,857.05 of subsidy Naira for the trip

The same calculation would hold true for the people that buys the biggest generator, eat mostly imported food, owns the biggest house etc.

When the price of fuel almost approached $5 per gallon, the price of SUVs dropped dramatically because people where getting rid of them for cheaper and more efficient cars.

Here’s a clip of P Diddy during the last fuel crises explaining why he was “forced” to fly on a commercial airline instead of taking his personal jet that would have cost him $250k for fuel.

[flash=400,250]
https://www.youtube.com/watch?v=tRZTCZPNNWU[/flash]

Its so simple, stop stealing all our money and that would cover all subsidies,

Finally The Hidden Truth About Fuel Subsidy Comes Out


No doubt, many Nigerians have not seen the facts about fuel subsidy this clearer before: On December 10, 2011, if you stopped at the Mobil filling station on Old Aba Road in Port Harcourt , you would be able to buy a litre of petrol for 65 naira or $1.66 per gallon at an exchange rate of $1/N157 and 4 litres per gallon. This is the official price.

The government claims that this price would have been subsidized at,
N73/litre and that the true price of a litre of petrol in Port Harcourt is N138/litre or $3.52 per gallon.

They are therefore determined to remove their subsidy and sell the gallon at $3.52. But, On December 10, 2011, if you stopped at the Mobil Gas station on E83rd St and Flatlands Avenue in Brooklyn, New York, USA, you would be a able to buy a gallon of petrol for $3.52/gallon. Both gallons of petrol would have been refined from Nigerian crude oil. The only difference would be that the gallon in New York was refined in a US North East refinery from Nigerian crude exported from the Qua Iboe Crude Terminal in Nigeria while the Port Harcourt gallon was either refined in Port Harcourt or imported.

The idea that a gallon of petrol from Nigerian crude oil cost the same in New York as in Port Harcourt runs against basic economic logic. Hence, Nigerians suspect that there is something irrational and fishy about such pricing. What they (Nigerians) would like to know is the exact cost of 1 litre of petrol in Nigeria.

We will answer this question in the simplest economic terms despite the attempts of the Nigerian government to muddle up the issue. What is the true cost of a litre of petrol in Nigeria? The Nigerian government has earmarked 445,000 barrel per day throughput for meeting domestic refinery products demands. These volumes are not for export. They are public goods reserved for internal consumption.

We will limit our analysis to this volume of crude oil. At the refinery gate in Port Harcourt, the cost of a barrel of Qua Iboe crude oil is made up of the finding /development cost ($3.5/bbl) and a production/storage /transportation cost of $1.50 per barrel.

Thus, at $5 per barrel, we can get Nigerian Qua Iboe crude to the refining gates at Port Harcourt and Warri. One barrel is 42 gallons or 168 litres. The price of 1 barrel of petrol at the Depot gate is the sum of the cost of crude oil, the refining cost and the pipeline transportation cost.

Refining costs are at $12.6 per barrel and pipeline distribution cost are $1.50 per barrel. The Distribution Margins (Retailers, Transporters, Dealers, Bridging Funds, Administrative charges etc) are N15.49/litre or $16.58 per barrel. The true cost of 1 litre of petrol at the Mobil filling station in Port Harcourt or anywhere else in Nigeria is therefore ($5 +$12.6+$1.5+$16.6) or $35.7 per barrel . This is equal to N33.36 per litre compared to the official price of N65 per litre. Prof. Tam David West is right. There is no petrol subsidy in Nigeria. Rather the current official prices are too high. Let us continue with some basic energy economics.

The government claims we are currently operating our refineries at 38.2% efficiency. When we refine a barrel of crude oil, we get more than just petrol. If we refine 1 barrel (42 gallons) of crude oil, we will get 45 gallons of petroleum products. The 45 gallons of petroleum products consist of 4 gallons of LPG, 19.5 gallons of Gasoline, 10 gallons of Diesel, 4 gallons of Jet Fuel/Kerosene, 2.5 gallons of Fuel Oil and 5 gallons of Bottoms. Thus, at 38.2% of refining capacity, we have about 170,000 bbls of throughput refined for about 13.26 million litres of petrol, 6.8 million litres of diesel and 2.72 million litres of kerosene/jet fuel.

This is not enough to meet internal national demand. So, we send the remaining of our non-export crude oil volume (275,000 barrels per day) to be refined abroad and import the petroleum product back into the country. We will just pay for shipping and refining. The Nigerian government exchanges the 275,000 barrels per day with commodity traders (90,000 barrels per day to Duke Oil, 60,000 barrels per day to Trafigura (Puma Energy), 60,000 barrels per day to Societe Ivoirienne de Raffinage (SIR) in Abidjan, Ivory Coast and 65,000 barrels per days to unknown sources) in a swap deal.

The landing cost of a litre of petrol is N123.32 and the distribution margins are N15.49 according to the government. The cost of a litre is therefore (N123.32+N15.49) or N138.81 . This is equivalent to $3.54 per gallon or $148.54 per barrel. In technical terms, one barrel of Nigerian crude oil has a volume yield of 6.6% of AGO, 20.7% of Gasoline, 9.5% of Kerosene/Jet fuel, 30.6% of Diesel, 32.6% of Fuel oil / Bottoms when it is refined.

Using a netback calculation method, we can easily calculate the true cost of a litre of imported petrol from swapped oil. The gross product revenue of a refined barrel of crude oil is the sum of the volume of each refined product multiplied by its price. Domestic prices are $174.48/barrel for AGO, $69.55/barrel for Gasoline (PMS or petrol), $172.22/barrel for Diesel Oil, $53.5/barrel for Kerosene and $129.68/barrel for Fuel Oil. Let us substitute the government imported PMS price of $148.54 per barrel for the domestic price of petrol/gasoline.

Our gross product revenue per swapped barrel would be (174.48*0.066 +148.54*0.207+172.22*0.306+ 53.5*0.095+129.68*0.326) or $142.32 per barrel. We have to remove the international cost of a barrel of Nigerian crude oil ($107 per barrel) from this to get the net cost of imported swapped petroleum products to Nigerian consumers. The net cost of swapped petroleum products would therefore be $142.32 -$107 or $35.32 per barrel of swapped crude oil. This comes out to be a net of $36.86 per barrel of petrol or N34.45 per litre.

This is the true cost of a litre of imported swapped petrol and not the landing cost of N138 per litre claimed by the government. The pro-subsidy Nigerian government pretends the price of swapped crude oil is $0 per barrel (N0 per litre) while the resulting petroleum products is $148.54 per barrel (N138 per litre). The government therefore argues that the “subsidy” is N138.81-N65 or N73.81 per litre.

But, if landing cost of the petroleum products is at international price ($148.54 per barrel), then the take-off price of the swapped crude oil should be at international price ($107 per barrel). This is basic economic logic outside the ideological prisms of the World Bank. The traders/petroleum products importers and the Nigerian government are charging Nigerians for the crude oil while they are getting it free.

So let us conclude this basic economic exercise. If the true price of 38.2% of our petrol supply from our local refinery is N33.36/litre and the remaining 61.8% has a true price of N34.45 per litre, then the average true price is (0.382*33.36+0.618*34.45) or N34.03 per litre. The official price is N65 per litre and the true price with government figures is about N34 per litre (even with our moribund refineries).

There is therefore no petrol subsidy. Rather, there is a high sales tax of 91.2% at current prices of N65 per litre. The labor leaders meeting the President should go with their economists. They should send economists and political scientists as representatives to the Senate Committee investigating the petroleum subsidy issue. There are many expert economists and political scientists in ASUU who will gladly represent the view of the majority. The labor leaders should not let anyone get away with the economic fallacy that the swapped oil is free while its refined products must be sold at international prices in the Nigerian domestic market.

The government should explain at what price the swapped crude oil was sold and where the money accruing from these sales have been kept. We have done this simple economic analysis of the Nigerian petroleum products market to show that there is no petrol subsidy what so ever. In the end, this debate on petrol subsidy and the attempt of the government to transfer wealth from the Nigerian masses to a petrol cabal will be decided in the streets.

Nigerian workers, farmers, students, market women, youths, unemployed, NGO and civil society as a whole should prepare for a long harmattan season of protracted struggle. They should not just embark on 3 days strike/protests after which the government reduces the hiked petroleum prices by a few Nairas. They must embark upon in a sustainable struggle that will lead to fundamental changes. Let us remove our entire political subsidy from the government and end this petroleum products subsidy debate once and for all. It is time to bring the Arab Spring south.

This piece was written by Izielen Agbon Izielen Agbon
He writes from Dallas, Texas. izielenagbon@yahoo.com
He is former HOD, Petroleum Engineering Dept, former ASUU chairman, University of Ibadan,
trained many operators in nation’s energy industry with practical experience on
our practices and policy focus in the last 20yrs.

Sanusi should be made the minister of information. That's where he's expertise is highly needed. he reminds me of Femi Fani Kayode and Frank Nweke Jr. This man can go to any length even tell lies just to make people tow his school of thought. The Islamic banking manoveuring is still fresh in my memory where he used Igbos as his defence line whenever sharia banking was attacked. We heard things like "Igbos are investing in Islamic Banking", "Anambra borrowed money from bokoharam bank of Nigeria", "Igbos say it's mohammed bank or death". He's the most intelligent Nigerian no doubt, at least to deluded Nigerians. Our educational system needs urgent attention.

i cant imagine okonjo iweala saying this, how on earth is removing of subsidy affect only the high and the middle classes, imagine our overated big mouthed economist opening her teeth to say this baseless piece, hmmm. the truth is that NIgErIA as a nation doesnt ve economy of whatsoever, so damn those claims of economic limbo this ordinary sanusi of a thing is claiming would soon happen to NAIJA in time soon. if in your own terms sanusi is the most intelligent man in nigeria, then i believe our collective stand here as a nigerian is a show case of idiosyncracy and tomfootnery. when the head is spoilt what ll remain of the other parts? absolutely nufin. who board taxi the most? who travelled through bus the most, who entered transits the most? who uses kerosine the most? even this barber's generator who uses it the most? most trading in the market would be hyke by this subsidy removal, even groundnut. i dont blame sanusi, is an opportunist, for the fact that u ve first class in yoruba does not mean u can operate in the theatre or performing the work of a medical doctor, you all know whaat i mean {bloody tortoise}. pls lets implore to this our retardeen to take the bull by the horn. Re-abilitate our refineries! let subsidy die a natural death and DIVERSIFY THE SO CALLED ECONOMY. THANKS and God BLess nigeria