A lot of comments I see here shows how little we Nigerians know about how industries really work. As much as we claim to love cars, we really have no clue about the industry! Innoson (IVM) is nothing but an SKD assembly plant!! I do not want to take anything away from his efforts as an industrialist, but com'on guys, we need to start coming clean on issues rather than making deceitful claims - it is the first rule of international business! Innoson really does what any other third world aspiring investor would do - he went to China, struck a deal with an OEM manufacturer who is looking to expand their market (BAIC in this instance) and then proceeded to start a simple assembly process using SKDs (Semi-Knocked down parts) from the OEM (BAIC). This in a nutshell, is IVM's business model. Quite unfortunately, rather than look at facts, many of our fellow countrymen will keep propagating lies (because nah my broda from my village nah!), keep wallowing in ignorance and self-deceit! Innoson is doing what is needed to grow an industry and if he keeps having success, perhaps at some point in the far future, the company may actually have the funds and the (R& D) department needed to develop an indigenous product.! For now however, all we have is an assembly plant - one that is a great deal inferior to what PAN and VWON had been able to accomplish in the 70s and early 80s. And if you ask me why? Well, PAN and VWON were fully fledged assembly plants that were capable of a complete assembly processes (called CKD assembly). CKD (Completely Knocked Down parts) plants, unlike Semi-Knocked Down (SKD) plants, involves putting together hundreds of components and parts that came in bolts and nuts pieces which often includes structural welding and paint shop! SKD on the other hand is like a starters kit in which most of the components come pre-assembled and painted, you only need to couple the major components together to have a car! Again, CKD comes in pieces, while SKD comes in Component parts. The only thing that was missing from the former PAN and VWON operation in being able to completely manufacture was that there was no Sheet metal stamping, robotic welds, design department and (R& D) department! If you ask me, Nigeria was a lot more advanced in the 70s! Most of the auto manufacturers in Nigeria now simply do SKD and that is why they can get by with such small assembly plants! In finality, for the sake of the stubborn ones in our midst, I will break down the source of each of Innoson's car models for you - google is your friend!:

1. Innoson G80 is simply a locally assembled and rebadged BAIC BJ80
2. Innoson G40 again is a locally assembled and rebadged BAIC BJ40
3. Innoson G6 is a locally assembled & rebadged Zhongxing ZX Tiger SUV (an obscure Chinese manufacturer)
4. Innoson G5 is a locally assembled & rebadged Gonow Aoosed G5 (A subsidiary of GAC)
5. Innoson Granite is a locally assembled & rebadged Zhongxing ZX Terralord
6. Innoson Carrier is a locally assembled & rebadged Zhongxing ZX Tiger TUV
7. Innoson G20 is a locally assembled & rebadged Weiwang M20 (Weiwang is a subsidiary of BAIC)
8. Innoson Fox is a locally assembled & rebadged BAIC E150/E130 Hatchback
9. Innoson Umu is a locally assembled & rebadged BAIC E150/E130 Sedan
10. Innoson 6540 bus is basically a locally assembled & rebadged Foton View (Itself an unauthorized copy of Toyota's 5th Gen. Hiace) *
11. Innoson 5000 Van is basically a locally assembled & rebadged Foton Alpha (Itself an unauthorised copy of Toyota's 4th Gen. Hiace) *
* Note: Foton is yet another subsidiary of BAIC!

And there you have it - a complete and undiluted synopsis on the basis, origin and source of Innoson vehicles! IVM's much taunted automobile 'original manufacturing' claims are largely false! If anyone is still in doubt, google is your friend - please make use of it!

As I said, Innoson does assemble from SKD components - this makes them a local assembly plant by law! There is currently a Nigerian policy (Nigerian Automotive Industry development Plan (NAIDP)) that has been implemented since 2015 which now makes it attractive for Manufacturers and investors to set up small local SKD assembly plants. Innoson, like many others, is simply taking advantage of this. Although I refer to many of the models "locally assembled & rebadged", in reality many of them may not even assembled but may just be imported and marketed under the brand! I am not sure which ones are imported (I don't have the data) but from the pricing, I do suspect that both the G80 and the G40 are simply imported! The NAIDP policy allows and encourages local assembly manufacturers to import 2 vehicles for every vehicle assembled in Nigeria - for this, they get a reduced duty rate (35%) instead of (70%)! At N27 million, it is pretty obvious that the G80 is one of those ones imported!

In my opinion, it would have been better and more credible to simply be truthful and own up to the fact that as a young company, they have no proprietary technology and indeed can't be expected to have one for many years. Being an Assembly plant is good enough for many developed countries and I see no reason to lie!

My two cents.

sultaan:


You are partially right with your description of each Innoson model, but you will be very right if you replaced the word "locally assembled" with "imported"

As I said, Innoson does assemble from SKD components - this makes them a local assembly plant. There is currently a Nigerian policy (Nigerian Automotive Industry development Plan (NAIDP)) that has been implemented since 2016 which now makes it attractive for Manufacturers and investors to set up small local SKD assembly plants. Innoson, like many others, is simply taking advantage of this. Nevertheless, you are also correct that some of these models are "imported". I am not sure which ones are imported (I don't have the data) but from the pricing, I do suspect that both the G80 and the G40 are simply imported! The NAIDP policy allows and encourages local assembly manufacturers to import 2 vehicles for every vehicle assembled in Nigeria - for this, they get a reduced duty rate (35%) instead of (70%)! At N27 million, it is pretty obvious that the G80 is one of those ones imported!

A lot of comments I see here shows how little we Nigerians know about how industries really work. As much as we claim to love cars, we really have no clue about the industry! Innoson (IVM) is nothing but an SKD assembly plant!! I do not want to take anything away from his efforts as an industrialist, but com'on guys, we need to start coming clean on issues rather than making deceitful claims - it is the first rule of international business! Innoson really does what any other third world aspiring investor would do - he went to China, struck a deal with an OEM manufacturer who is looking to expand their market (BAIC in this instance) and then proceeded to start a simple assembly process using SKDs (Semi-Knocked down parts) from the OEM (BAIC). This in a nutshell, is IVM's business model. Quite unfortunately, rather than look at facts, many of our fellow countrymen will keep propagating lies (because nah from my village nah!) and keep wallowing in ignorance. Innoson is doing what is needed to grow an industry and if he keeps having success, perhaps at some point in the far future, the company may actually have the funds and the R& department needed to develop an indigenous product.! For now however, all we have is an assembly plant - one that is a great deal inferior to what PAN and VWON had been able to accomplish in the 70s and early 80s. And if you ask me why? Well, PAN and VWON were fully fledged assembly plants that were capable of a complete assembly processes (called CKD assembly). CKD (Completely Knocked Down parts) plants, unlike Semi-Knocked Down (SKD) plants, involves putting together hundreds of components and parts that came in bolts and nuts pieces which often includes structural welding and paint shop! SKD on the other hand is like a starters kit in which most of the components come pre-assembled and painted, you only need to couple the major components together to have a car! Again, CKD comes in pieces, while SKD comes in Component parts. The only thing that was missing from the former PAN and VWON operation in being able to completely manufacture was that there was no Sheet metal stamping, robotic welds, design department and R&! If you ask me, Nigeria was a lot more advanced in the 70s! Most of the auto manufacturers in Nigeria now simply do SKD and that is why they can get by with such small assembly plants! In finality, for the sake of the stubborn ones in our midst, I will break down the source of each of Innoson's car models for you:

1. Innoson G80 is simply a locally assembled and rebadged BAIC BJ80
2. Innoson G40 again is a locally assembled and rebadged BAIC BJ40
3. Innoson G6 is a locally assembled & rebadged Zhongxing ZX Tiger SUV (an obscure Chinese manufacturer)
4. Innoson G5 is a locally assembled & rebadged Gonow Aoosed G5 (A subsidiary of GAC)
5. Innoson Granite is a locally assembled & rebadged Zhongxing ZX Terralord
6. Innoson Carrier is a locally assembled & rebadged Zhongxing ZX Tiger TUV
7. Innoson G20 is a locally assembled & rebadged Weiwang M20 (Weiwang is a subsidiary of BAIC)
8. Innoson Fox is a locally assembled & rebadged BAIC E150/E130 Hatchback
9. Innoson Umu is a locally assembled & rebadged BAIC E150/E130 Sedan
10. Innoson 6540 bus is basically a locally assembled & rebadged Foton View (Itself an unauthorized copy of Toyota's 5th Gen. Hiace) *
11. Innoson 5000 Van is basically a locally assembled & rebadged Foton Alpha (Itself an unauthorised copy of Toyota's 4th Gen. Hiace) *
* Note: Foton is yet another subsidiary of BAIC!

And there you have it - a complete and undiluted synopsis on the basis, origin and source of Innoson vehicles! IVM's much taunted automobile 'original manufacturing' claims are largely false! If anyone is still in doubt, google is your friend - please make use of it!

In my opinion, it would have been better and more credible to simply be truthful and own up to the fact that as a young company, they have no proprietary technology and indeed can't be expected to have one for many years. Being an Assembly plant is good enough for many developed countries and I see no reason to lie!

My two cents.

Buses!!

Flyer!!

A new company - CityHoppers Ltd - has started offering daily night bus service from Ajah (Lekki/Peninsula) to Jabi, Abuja. The company is located at HFP Eastline Shopping complex which is at Abraham Adesanya roundabout. I discovered the company when I went to seek transport to Abuja from GUO, Ajah recently. I had gone to GUO (which is also at Abraham Adesanya roundabout) to enquire about availability of bus to Abuja around 9AM in the morning and was told there would not be any bus until early the next morning. A dude walked up to me and informed me that there was a nightbus leaving later in the evening across the road. This was how I discovered and used CityHoppers Transport bus to go to Abuja. They run a very cultured, relaxed and professional service. The bus was one of those Eurobuses with full AC. The drivers were professional and there was no rubbish attitude. It was a very pleasurable but long trip (12 hours!). Nigeria really needs to fix her roads! I will recommend this Company to anyone taking a trip to Abuja from Lagos Island/ Lekki area - there is no need to spend time and money go to Jibowu/Iddo to board a night bus. They even have a website from which you can purchase tickets - everything is organized! Their website is listed below:

http://www.cityhoppers.com.ng/

EgunMogaji:


What do you recommend for flooring a compound?

Thanks.

Simply use the guideline for medium strength mixture above.

bukkyshobajo:
DANGOTE cement is not a portland cement even though it says that on the label, it has a rapid setting time and this makes it unsuitable for concrete work that requires curing of up to 28 days for it to attain it's maximum strength. it is however suitable for making blocks, laying blocks, tiling and plaster work at the proper mix ratio of 1:6 cement to sand. Elephant on the other hand is a portland cement, slower setting time, the more you add water, the stronger it becomes. So for concrete, go for elephant but for tiling, masonry and plastering, choose dangote, theyre both good but serve different purpose

Baba nla misinformation!! Whoever listens to and acts on this crap has been done a great disservice - nothing could be further from the truth! The problem with many Nigerians is that someone builds one or two structures, deals with a few mason or artisans and now they consider themselves experts

Both Dangote, Elephant, Wapco, Ashaka and other brands from Lafarge are all portland cement. There are 3 main classes of portland cement -
32.5, 42.5 and 52.5. When using the cements in concrete you can achieve high and low strength concrete with each/any type of cement. But with a lower strength class cement there is an economical limit on achieving high to very high concrete strength - this means that you may have to use a little more cement to attain the same strength! Whenever you see R written with it (e.g 42.5R) it means that the cement is a rapid setting cement - this means it will set faster (usually 8 hours) than normal cement. 42.5N means the cement is normal and may take up to 24 hours to set. Dangote is the only cement that comes in 42.5 class. Dangote Cement is currently the only company producing 52.5 grade cement in the country, which it sells at the same price as its 42.5 grade cement. Most other manufacturers in Nigeria were manufacturing to the 32.5 grade. The new regulations, which Standards Organization of Nigeria (SON) has said will be strictly enforce, states that 42.5 grade cement must be used for casting of columns, beams, slabs and for moulding blocks, while 52.5 grade cement is now mandatory for building bridges. 32.5 should be used for plastering. Lafarge, which manufactures (Elephant, Ashaka, Unicem and PowerMax) was quick to respond and sue SON. In truth, my opinion is that SON was being reckless and conniving! 32.5 cement is as good as any (proven all over the world!) - the difference is that you may need to use a little more in the mixture of the aggregate and you will attain the same compressive strength!

Here is Lafarge's guideline for mixing Elephant cement:

Using a mix sequence of CEMENT/SAND/AGGREGATE/WATER

FOR HIGHER STRENGTH CONCRETE Grade 25/30 use: 1 Headpan/1.5 Headpans/3 Headpans/0.5 Headpans

FOR MEDIUM STRENGTH CONCRETE Grade 15/20 use: 1 Headpan/2 Headpans/4 Headpans/0.5 Headpans

FOR LEAN MIXES Grade 7.5/15 use: 1 Headpan /3 Headpans/6 Headpans/0.5 Headpans

FOR MORTAR & PLASTERING (GENERAL PURPOSES ) use: 1 Headpan/6 Headpans (cement/sand)

I hope this helps anybody who comes looking for information. I hate it when people are misinformed by half-baked information.

Yes, indeed the ministry of transport has a lot to do however we as consumers and citizens can still do a lot for ourselves. If a transport company treats customers shabbily or fails to fulfil their contract, I feel it is time to have a mechanism for calling them out, shaming them and exposing them so that the paying public can quickly shun such a business.

For any one who is able to respond, one of the question that I will like to see answered is with regards to Luxurious bus service. When you took your last trip to wherever (pls mention), was the bus full? I am not based in Naija right now but will soon be and so please excuse my question if it seems funny. When I was in Naija (years ago), it use to be that the buses will fill up (Luxurious buses) before they departed. I am guessing that now that there is a lot more competition many of these buses may not be filling up quite so easily. Just a guess though...

Hello guys,

I am hoping this thread will be a place where forum members can come to give reviews for transportation companies such as ABC, Ekene-Dili Chukwu, We-We motors, Young Shall Grow, G.U.O and Cross country as well as others. It would be beneficial if you talked about your experience whether good or bad so that the rest of the country could learn and deal with the company as necessary. As citizens, we need to protect ourselves by pooling together the only true resource that we have as individuals - the power of information and the word of mouth. Any company or business that wants to survive out there needs to understand that they not only need to honour their contract but they also need to treat people with dignity and respect at all times.

PS: Please refrain from insulting each other and derailing the purpose and intent of this thread. Thanks.

Generally, I do not engage myself in this mindless arguments that are based on nothing but fallacies, ethnic bigotry and tribalist agendas. There is generally nothing to be gleaned or learned from such arguments because the argument often degenerates to that of 'ethnic supremacy' rather than having intelligent and enlightening discussions about historical facts which has over the years become less and less understood being distorted and macerated with many fallacious claims and quite a lot of deliberate and mischievous misrepresentations! Nigeria has failed to document its own history and in the rare instance when we do get the opportunity to get a glimpse into what actually occurred, with narratives and accounts being given by those who were there as actual participants, what often follows is that rather than listen and learn something or even prod for more information, what you typically see is this mindless argument that was just concluded (20 pages worth of mindless drivel) - not a single attempt to cross-check or cross reference information and establish truth! I have to shake my head for this generation of Nigerians!

Here is an extract from the Archives of United States Army Military intelligence Report. Report is published by Marine Corps Command and Staff College. Document is dated April 1, 1984. Credited author is STAFFORD, Michael R., Major, United States Army.


“One bright spot for the Biafrans appeared on July 21,
1967 when a World War II American-made B-26 bomber piloted by
a Polish expatriot, called "Kamikaze" Brown, bombed and
strafed Federal positions at Obukpa. This greatly lifted
Biafran morale (7), but offered ominous clouds for future
events. Both Great Britain and the Untied States had
rejected Nigerian requests for aircraft. By July 31 Nigerian
representatives were reported in Moscow (8.) and expansion of
the war's lethality was imminent. (Note: Arms supply was a
major part of a critical issue, outside intervention, which
dominated international discussion of the Nigerian Civil
War.)
Another event which portended the calamities to follow
was the amphibious assault on and capture of the Island of
Bonny at the mouth of the Port Harcourt Harbor. This Federal
operation was important for two reasons. First, it
demonstrated a boldness, fluidity and imagination seldom seen
in Federal operations. The Bonny assault was not remarkable
in its execution; however, the operation was in marked
contrast to the "skirmishes, slow, cautious probes, and long
distance bombardments of doubtful object with doubtful
accuracy [and an] incredible amount of aimless and wasteful
shooting" (9) which dominated the northern battlefields. On
Bonny a 1000 man invasion force loaded on two ships
overwhelmed a company--sized garrison after a limited naval
bombardment. Destroyed was Biafra's only real naval vessel,
a Nigerian patrol boat seized at secession; more important,
Port Harcourt, the major port and oil terminal in Biafra, was
effectively sealed off.
This leads to the second importance of the Bonny
capture. It pinpoints the failure of Biafran leaders to
appreciate the incredible consequence of losing their sea
lines of communications. They did not see the need to secure
adequate sea power before the war began and were unable to
correct their shortcoming when it became apparent how serious
the Federals were about enforcing their blockade of the
Biafran coastline. The New York Times noted at this stage of
the war that Biafra had a "better-than-even chance of
survival" ...but that it was... "clear, that the East cannot
survive for many months unless the naval blockade is
broken."(10) Instead of confronting this problem, however
the Biafrans turned inward.
The Midwestern Invasion (August-September 1967). The two
forces fought tentatively through July of 1967 and into
August, with the Federals steadily gaining ground. Then the
Biafrans, who had seemed interested only in a defensive war,
launched an attack into the Midwestern State. This marked
the turning point in the war, as the Rebels gambled on a
disastrous offensive campaign.
"We have no territorial ambitions. We do not want to
capture anybody or punish anybody. We just want to be left
alone,"(11) Ojukwu wrote. The drive into the Midwest,
however, stood in stark contrast to this claim, Biafra had
moved boldly beyond simply protecting the Ibo enclave and
seized the initiative, taking the war to the Federals. The
objectives of the strike were lightning attacks on, and the
capture of, the Federal capital of Lagos and the Western
State capital of Ibadan. The occupation of these two
capitals was expected to cause an immediate collapse of the
Federal government and an end to the war. But the way the
Rebel forces spread throughout the region, it is clear that
Ojukwa had other objectives in their advance. Among these
were establishment of internal control of the Midwestern
State and limited prosecution of the war into the Northern
State.
The execution of the plan higlighted the incompetence
of the strategic planners in Biafra. Just as they failed to
fully grasp the implications of a naval blockade, they lacked
the professional skills and imagination (and patience, and
resources) to coordinate an effective attack. The plan took
advantage of the sparse Federal forces which were thinly
spread throughout the region in small garrisons, more an
internal security force than an army. But the plan did not
correctly account for many of the non-military factors
bearing on the situation, nor did it have sufficient
flexibility to confront in any realistic sense changing
conditions.
The Midwestern State was in a precarious position, a
small, wealthy area caught between the secessionist Ibo and
the Federal captial of Lagos. In its boundaries were some
800,000 Ibo who could be expected to have sympathies for the
East. Primarily agrarian, the region was rich in palm oil,
rubber and timber, while oil was a growing resource.
One-third of Nigeria's 1967 production and one-half of her
reserves were located here. This made the Midwest a
desirable property for both sides.(12)
At 3 a.m. on August 9, a 100 vehicle column (about 1000
men) crossed the Onitsha Bridge over the Niger River. Within
hours Rebel troops occupied the Midwest captial of Benin,
while others had fanned out towards Okene (see Map IV) in the
north, Owo, also north, and Sapele and Warri to the south.
The takeover was facilitated by an insurrection of Ibo-led
troops in the region and few shots were actually fired.
Evidence is strong that Federal military leaders of Ibo
origin secretly collaborated with the Biafrans, providing
intelligence on Federal troop dispositions and coordinating a
revolt from Nigeria in conjunction with the offensive.(13)
As a result, operational security and surprise were achieved.
The inital success of the raids, coupled with an August 11
air attack on Lagos, had a devastating psychological effect
on the Federal side.
In compensation for the tremendous security surrounding
the operation, the Biafrans delayed the formation of their
brigade-sized task force, conducted no rehersal and even
withheld appointment of the task force commander until the
day before the attack.(14) This demonstrated a lack of
appreciation for the necessity of building teamwork and
cohesion in military units and entered several unknowns into
the Midwest operational equation.
a. Lieutenant Colonel Victor Banjo, a Yoruba, was
selected to be the operational commander for politcal
reasons rather than his military skills. There was a belief
that a non-Ibo leader would help gain Midwest and Western
support for the Biafran attack and in the end, help unite all
of the South against the North. This not withsanding, Banjo
ignored his principal objective, Lagos, and twice held up his
advance. At Benin he halted to "reorganize" his forces,
though they had not fired a shot. Time was lost in an
argument between Benin and Enugu over who was to be the new
governor of the region.(15) After three days the Rebels
advanced on to the west before stopping at Ore. Forgeting
that their success depended on speed, the Biafrans were
hesitant to face the uncertainty of continued advance.(16)
Lack of agrresive leadership and unity of purpose resulted
in a two week delay after which the Rebels lost the
initiative.
b. The shock of the invasion and the lack of discipline
displayed by Biafran soldiers produced adverse results. The
support expected for the Midwest Ibo did not materialize as
expected, and the negative reaction by non-Ibo in the Midwest
and West was far worse than anticipated. It evidenced a
political blindness in the Biafran leadership akin to their
military shortcomings. John de St. Horre notes that this
political blindness was "too often repeated to be a chance
phenomenon."(17)
c. The political "wheeling and dealing" that took place
in Benin over control of the region, at the expense of
military objectives, lent a suspicious cast to the Biafran
leadership. The motives and actions of all officers became
suspect because of the rumor of "saboteurs" within the
leadersip.(18) This prejudgement severely hampered command
and control in Biafra thereafter and is discussed in Chapter
5.
d. The Biafrans probably lacked the capability to
conduct such an offensive operation. In his book, Reluctant
Rebel, Fola Oyewole details the lack of preparation for the
Midwest offensive by his company. Here is a summary of one
episode. Upon his return from a battalion field exercise, he
was ordered to form a new company at Onitsha. He delivered
his car and possessions to family members in that city and
reported immediately to his battalion. Within hours he moved
to the Midwest. His unit's mission was the capture of the
army barracks at Ugbelli. With an officer cadet as his
executive officer and no experienced noncommissioned
officers, the company was bused to the objective area. Ten
miles from Ugbelli, he stopped the column and provided a
short briefing, though he was without intelligence or
reconnasissance. Fortunately there was no opposition at the
objective. Even so, the untrained and undisciplined troops
engaged in sporatic firing which resulted in one wound.(19)
Such episodes illustrate just how unprepared the Rebels were
for the war. The vehicles used for the attack included
homemade armored cars, farm trucks and passenger cars. The
Biafran soldiers were poorly equipped, and many were without
uniforms. They were lucky to meet only token resistance from
the few Federal Forces.
From the Federal side, the Midwest Invasion achieved one
significant result. It broke the complacency surrounding the
Federal war effort, and unified the ojectives of Lagos, the
West and the North. The entire country was intimidation by
the aggressiveness of the Eastern Ibo and the response was
immediate. In a demand for Federal action, anti-Ibo riots
broke out in Lagos and Ibadan. A dawn-to-dusk curfew was
imposed at Ibadan, and troops and armored cars presented a
show of force in Lagos to buoy public confidence.
Militarily, the reaction was more substantive. A war
cabinet was formed in Lagos. Remaining Federal forces
operating in the Midwest fell back to blocking positions,
most notably to the south of Ore about 120 miles from Lagos
on the overland axis of advance from Benin. There they were
reinforced by a company of Federal Guards from Lagos. A new
unit, 2 Division, commanded by then Lieutenant Colonel
Murtala Mohammed, sent its 7 Brigade to Ore (Iluyomade's brigade), while the 6 and
8 Brigades were placed on the northern border of the Midwest
to occupy the Biafran's right flank.
Lagos must have been reminiscent of Paris and her taxis
during the first battle of the Marne. Ground wagons and red-
and-silver buses delivered soldiers from Lagos to the front.
Six hundred soldiers were recalled from Bonny, and 500 more
were moved by rail from Kaduna in the north. The war in the
north of Biafra slowed as attention and resources were drawn
to overcome the threat in the Midwest. Nigeria's leading
playwright, Wole Soyinka, observed that "the short, surgical
police action is being conducted with blunt and unsterile
scapels."(20)
By mid-August, blown bridges and their own hesitation
had stopped the Biafrans. The very factor which had hampered
the Federal offensive earlier, long lines of communcations,
now was a problem for the Rebels. A small force from the
beginning, it was stretched too far to withstand the growing
Federal pressure.
Abruptly, the Rebel offensive ended as the Federals took
the initiative. After a single, fierce, battalion-level,
infantry battle at Foriku (probably meant 'Ofusu'), just south of Ore, Biafran
resistance faded into an "accelerating retreat" characterized
by minor delaying actions, blown bridges and cratered
roads.(21) The two northern brigades were in a race to
outflank the Biafrans and cut off their retreat to the Niger
River Bridge at Onitsha. In their haste, the Biafrans left
behind many soldiers who did not receive word to withdraw and
were consequently captured. Benin was evacuated days before
the Federals arrived. The remnants of the invading force
crossed the Niger Bridge at Onitsha, blowing two spans in
their passing. The destruction of the bridge, a giant
edifice commemorative of Nigerian progress, was symbolic of a
final isolation for Biafra and a new and deadlier phase of
the war.
From the Midwest Invasion the Biafrans had hoped to show
the world that they were a legitimate power deserving of
international recognition; instead the foray ended with
disaster. The Rebels gained some food, materiel, and the
assets of the Bank of Benin which were expropriated in the
occupation. But the losses far overshadowed those minor
gains:
a. The Federals declared all out war, launching the
first air strikes of the war at Enugu, Onitsha, Port Harcourt
and Calabar among others.(22)
b. The Biafrans removed the buffer of the midwest
state. All sympathy in the South was lost as non-Ibo became
pro-Federals. Additionally, the blockade became more
effective as trade that had flourished in the Niger died.(23)
c. The loss of resources, men and materiel, in the
Midwest hastened the fall of Enugu. The withdrawal of these
assets had weakened the defense of the northern region. When
these forces did not return and the Federals resumed their
advance with a rekindled fervor, the early fall of the
Biafran capital was assured.(24)
d. Finally, the initiative was surrendered to the
Federals. With the offensive they initiated in mid-August,
the Federals began to display their superiority. The
conflict slowed to the plodding war of attrition that would
continue for over two years. The norther border was closed
by the Nigerian 1 Division, the Midwestern Region had been
clearly by 2 Division, and the Navy had blockaded most of the
sea approaches. The Cameroons had closed their rugged border
in June 1967, and the noose was slowly tightened by the
Federals.”

Siena, ....please send me an email asap. I have been trying to get hold of you, I have things I want to discuss. My email is - midas02@yahoo.com

@Egift, .....your statement suggests that you did not read the entire article or perhaps it was a simple case of you failing to assimilate its import. I will suggest that you at least read the last 4 paragraphs and then we might be on the same page. There is no doubt that those in power and those who are in positions of leadership are guilty and completely complicit in the destruction of the Nigerian dream, however there is more to it - the people have also failed in their duties as citizens and as informed constituents. They failed in their duties to the nation, to their fellow citizens and above all to themselves and their children. How else do you explain the 'caustic' environment which we have engendered in Nigeria - Is it leadership that does many of the things used as examples above or is it because the people have lost their moral turpitude? Is it the government in the churches and Mosques too? Is it the government in the private businesses that fleece the public? There are many questions and these are question we must answer on an individual basis. It is often easy to be in denial until one looks in the mirror....

Interesting and self examining article. I expect that it would have been more popular if the author had written about Genevive or Tonto Dikeh? Naija people for you....

THE NIGERIAN DREAM DESTROYED: LOOK IN THE MIRROR!
Written by Olumide Iluyomade



There was a dream in every young Nigerian heart – it was that positive force and pleasant expectation that motivated every individual. It was a dream about our fatherland, Nigeria, and all the wonderful things it would become for each person. As the years have passed, we have grown older but our search for the manifestation of this dream has not been allowed to die – the candle has been kept burning at all cost! So after so many years, after one might have studied hard, toured the world and laboured hard, one is finally ready. You are now ready to start building and living up your dreams. You go back home with a heart full of hope, aspiration and plans. But alas! ….the reality of the dream is not to be – like a mist, like vapour, it has simply disappeared! Your wickedly deflated hopes leave you a massive void and gaping hole filled only with an exasperated and hollow feeling.

Indeed the Nigeria of your dreams is long dead and buried! ….and it is almost useless to cry over that now! The nation you carried about in your heart is not the nation you found yourself back in. The nation you are confronted with now is a completely hostile stranger! Whatever little flicker of light and hope remained for you in the room has been doused with a gleefully applied, thick cloak of national decadence! The national cancer (corruption) has metastasized fully and the whole body is now consumed! The cycle of depravity is complete and there is now no respite to be found anywhere! Corrupt and abnormal practices are rife everywhere! Unbecoming conducts and depravity have been normalized and instituted in the culture and hence values are completely compromised!

The delicate fabric that holds the society together has been utterly ripped apart! Starting from ubiquitous religious institutions to under-funded schools, from Spartan classrooms to the over-crowded lecture theatres, from government establishments to businesses organizations, from idle factories to redundant offices, in private enterprise and in public institutions – It doesn’t matter, wherever you look, depravity stares you in the face! Whether you are dealing with government services or with private business, depravity will rear its ugly head and you will have demanded from you illicit settlement or bribe! In Nigeria, the word illicit is barely understood. Bribe and extortion are not optional, they are absolutely mandatory – it is a way of life! You are absolutely held to ransom if you are slow to respond favourably to their demands! You are insulted, mocked and ridiculed if you offer too little. If you refuse to play ball and ignore the demands, then they step it up with thinly veiled threats of sabotage and indefinite delay!

If you choose to stay put in Nigeria, then you are confronted with the dilemma of employment and the challenge of self-actualization in a hostile environment. If you are young, broke and unconnected then you are doomed to spend many productive years languishing in abject poverty, unemployment and misery – your education notwithstanding! If by some stroke of luck you do eventually find yourself some form of gainful employment, then you will soon realize and learn the unfortunate truth which so many before you have learnt – your salary will take you nowhere! The prevalent hyper-inflationary trend in Nigeria which the government has consistently induced and engendered with a long list of myopic, constipated and self-defeating policies, to say little of the acute and ubiquitous acts of corruption and ineptitude, will quickly ensure that what little money you earn is quickly rendered impotent in the face of untenably high prices! As it was with those before you, it will not be long before you go seeking illicit means of boosting your income so as to keep up with the Joneses. From that point on, decadence becomes heralded as a way of life and the downward spiral to the dark bowels of absolute depravity is but a short way off.

In the last two decades, Nigeria has distinguished herself, gradually and systematically becoming a haven for the criminal minded! It has become a nation that engenders, incubates and harbours abominable acts of corruption – a breeding ground for the worst kinds of criminals! For many, the only way to get ahead and make headway, the only option given for survival has been to engage in prevalent criminal activities. In Nigeria, criminals abound – in the government, in private enterprise, in civil service, in the judicial system, in the police, even in the churches and mosques! Criminal public officials do not even consider running away with their loot, after their illicit affairs have been exposed. Much rather, they become role models and heroes in the midst of the people – very much honoured, applauded and admired by an aspiring and money worshipping populace! Unfortunately, impressionable youngsters see this and aspire to the same standards! The message is simple; in Nigeria, criminality pays! Hence the society has become criminalized.

A man is called to serve his nation as a minister or a commissioner and within a few years he owns multi-million dollar Hotels, several palatial homes and a string of companies without a single explanation as to the source of his wealth! What do the elders and the people do? He is made a high chief in his hometown and an elder in his local church. He is exalted to chairman of this occasion and honorary guest speaker in that occasion. He even has an army of publicists and apologists, obsequious boot-lickers who have sold their soul to the devil in exchange for a morsel of bread, attending to his over-bloated ego and trying to convince those of us that are still sane that the ‘thief’ is a God sent messiah! It is a sad truth that in a country where there is no law, there could be no justice. Where there is no justice, there is no retribution. Where there is no retribution for wrong-doing then there is no conscience. Finally, where there is no conscience, there is no shame!

Not surprisingly, the corrosive and toxic social environment which we have evolved does nothing to nurture the young and does everything to destroy their potentials, dreams and aspiration. Young men who have never been privileged, neither having experienced the value of integrity nor having ever witnessed any honourable conduct in their society, are now expected to make a living through honourable means! Frustrated and without hope, they turn to the only alternatives they have – either a life of crime and heedless opportunism or a life outside the borders of their fatherland. Young ladies are not spared the harsh realities of our social failings either, as they are preyed upon and mercilessly exploited by older men. Short of being protected and shielded by her family’s wealth or influence, it is not often that a young woman accomplishes or gets anything done in Nigeria without being sexually exploited and harassed. The so called Nigerian ‘big men’ consider it an absolute right to sleep with any lady who comes under the influence of their office. And without any doubt, by the following morning, the same men are all too willing to occupy the front pew in church or mosque with white overflowing Agbada in pious displays and sanctimonious self assertion! Such is the perversion and depravity in Nigeria that even government operations make budgetary provisions and active monetary allocations for the sexual exploitation of desperate young ladies in entertaining state guests, officials and VIPs!

In Nigeria, to accomplish what could be considered a decent and reasonable quality of life, one would have to do extra-ordinary things! For a family to have access to basic necessities of life – things which are often overlooked and considered normal in other societies, the bread winner must become more than an individual – he or she must become the equivalent of a local government! In addition to the well known social infrastructural deficiencies which families have been forced to deal with in the past, families must now provide their own water (as before), their own power supply (80% of the time), their own waste management, their own fuel supply storage, their own vigilante security, their own educational alternative, their own healthcare infrastructure, their own street road maintenance and even their own justice system! This obviously multiplies the cost of accomplishing even the most basic stuff in the nation. Like a friend once opined; “I dug my own borehole, purchased a back-up generator, paid for street vigilantes and a personal watchman. I even paid to grade the street road annually and contributed for the installation of the neighbourhoods’ transformer. Must I now own my own refinery just to get fuel?……”

As residents in Nigeria will attest, predation and victimization is never far off and consequently residents are always edgy and nerves are always frayed! They have to contend with the persistent pressure of avoiding being duped even in the most basic transactions. There is always the constant threat of fraud and financial misappropriation in business dealings. Both at home and at work, they have to deal with the ever present threat of a disgruntled employee or domestic staff who might possibly act as a Trojan horse! When they are not bothered about employees, they are watching out for the threat of armed robbers. When it is not armed robbers at home, it is armed robbers on the highway! At night citizens barricade themselves in with a plethora of anti-burglary devices and barbed wire high wall fences making the prospect of escape for the resident, even in the event of a fire outbreak, a precarious one. Of recent the nation’s criminals have upped the ante – they now kidnap any well-fed individual and demand huge ransoms for their release! Oh, there are also the issues of extra-judicial killings, ritual killings and religious killings to contend with, …..but that is old news, I guess. What about the police?? Well, ….the police will be all too willing to take from you whatever the criminals haven’t yet taken!

May God have mercy on you should your health deteriorates in any manner. Should you or a member of your family ever require emergency medical attention in Nigeria, your chances of survival is at best, a 50-50 shot! Currently, Nigeria’s health infrastructure is so squalid, so neglected and dilapidated, that a simple fever or a tepid infection may very well just kill you! Relatively healthy people walk into hospitals with minor complaints and end up coming back in a casket! Whatever damage the health complaint has not yet done would be quickly piled upon by the inept, ill-trained, ill-equipped, nonchalant hospital staff. Who knows how many deaths could have been prevented, how many people need not have been sacrificed? In one of the nation’s premier hospitals, each patient’s family members are asked to fetch water daily to help sustain the patient’s water needs! News of dysfunctional and dilapidated teaching hospitals which have no access to clean water and limited power supply is rampant. The scale and extent of the squalid decay and dysfunction in Nigeria’s health sector beggars belief!

Travelling within the borders of Nigeria is in a class all by itself. It is arguably a riskier venture than travelling to the deepest parts of the ocean! If you decide to go by road then you run a very high risk of losing an arm, a limb or perhaps even your life. The roads are hideously bad and road accidents are rampant with hospital facilities being nowhere near capable of handling accident traumas. If you do drive carefully and are lucky enough to avoid road accidents then you may want to increase your vigilance so as to avoid running into a road block set up by emboldened and dangerously armed highway bandits! Not only do the highway bandits despoil you of your precious assets and belongings, they might just take a liking to your wife! Or worse still, they could simply dislike your face and decide that your life is not worth a penny thereby taking it!

If you are among those lucky enough to be able to afford Air travel, then I need not tell you about the palpable and pervasive fear that is experienced by flyers every time an aircraft takes to the sky or touches the tarmac in Nigeria. The slightest rain or weather change can be the cause of devastating plane crashes or accidents as most airports do not have functional instrument landing systems (ILS) and navigation radar systems that are mandatory for safe, all weather navigation and efficient operation. It does not help matters that years of mindless federal government’s policies has helped ensure the destruction of any form of profitability in the aviation industry thus causing airlines to cut corners. This is not to absolve airline operators (who themselves are shylocks) of any fault, as they would often prey on the Nigerian government’s ineptitude and corruption to commit egregious acts of negligence and fleece the system to the utter detriment of the people! In our usual fashion, candid efforts at improvements and reforms are ignored until disaster strikes and hundreds die. The government then puts on an ostentatious show of diligence, resolution and measured indignation. After idle speculations, rumours and blames may have made their rounds, a few licenses are then suspended, spurious investigations whose outcome is never publicly released are conducted and then it is back to business as usual!

Should you be travelling back to Nigeria after a trip abroad then upon the final approach to the derelict Murtala Mohammed Airport, you are suddenly made aware of the fact that you are entering into a lawless nation space! The chaos starts with the very same passengers with whom you have just shared a plane for several hours! You will witness the magical transformation and transfiguration of several fellow Nigerians, who seemingly up till this moment have been the picture of decency and model citizens, as they revert back to their ‘Nigerian’ forms. This phenomenon is still largely unexplained! Suddenly there is a widespread, irresistible urge to be the first one out of the plane, as Nigerian passengers climb over fellow passengers while cursing out at anyone who dares express displeasure or disapproves of their actions. As the plane decelerates on the runway, overloaded hand-luggages are recklessly pulled from the luggage racks atop slower moving passengers. Aisles are quickly jammed packed with ‘demon-possessed’ citizens who ignore the calming call of exasperated airline crew members! Everyone is suddenly VIP! “Do you know who I am?”, you will hear as two jostle for pole position on the custom’s queue followed by another counter threat; “I will deal with you in this country”. It is mayhem all over the airport. It is Nigerians being Nigerians.

As one steps off the plane and into the nation’s premier airport, should you still be basking in the relaxed and pleasant euphoria of foreign travel experience, you are quickly brought down to earth! One is greeted with the unsightly image of a poorly maintained, unkempt and dishevelled airport. Broken equipments and ripped chairs litter the arrival sections while dysfunctional toilet facilities do not make it any easier to ease the tension. Money grabbing, sleazy looking officials are positioned all over the place like predators sizing up the quality of the newly arrived ‘preys’! There is even an airport official in the restroom who is apparently charged with the ‘great’ responsibility of doling out exact measurements of toilet paper to hard pressed passengers – a service for which a handsome tip is often demanded! Retrieving your luggages from the luggage carousel may or may not be a nightmare depending on how much prayer you have done before travelling. On lucky days the carousel works, on other days there are either mechanical problems or power related failures to contend with.

Passing through the customs and security barricades is an experience that can only be matched by a war zone! The incessant demand and solicitation for monetary compensation is at the very least draining! You are subjected to both friendly and hostile demands while other officials engage in time wasting antics so as to force your hand. The attending customs officials insensitively paw through your personal effects as others gaze on in amusement and in eager anticipation of a handout. A careful inspection of your luggage may even reveal a gash or slash perpetrated by the baggage handling crew in a bid to retrieve valuable items from your bag! When you do ultimately come out of the Airport, unless you have made prior arrangements to be met and picked up, you are stormed by a mob of desperate hustlers – car hire, taxi drivers, baggage push-cart attendants, foreign exchange traders, pickpockets, airport touts and even unsolicited offers of security escort! This is but a snippet of what is to come. It can only be imagined how shocking and traumatic this would be for a first time visitor!

God help you if you have the burial of a loved one in Nigeria, then everyone sees you as a cash cow and a resource to be mercilessly exploited! You first have to deal with the bogus inflation and associated costs handed to you by ‘trusted’ family members, then you go out to experience hell! It starts with the clergy or Imams, then the mortician and mortuary, then the hearse company who won’t pay their pall bearers, which means the pall bearers may go on strike and demand ‘settlement’ from you before the casket is carried, right in the middle of the ceremony!! The choir and organist will accordingly separate their demands from the clergy! You will ‘settle’ the guy who allocates space in the cemetery and then deal separately with the grave-diggers and night-guard!

On the other side of things, you will have to deal with and perhaps accept the unreasonably high cost of caskets and hearse service. You will either deal with targeted exploitation of the caterer or deal with the deceit of family organizers. You will have to contain the demands of extended family members who want traditions to be fulfilled and ‘Aso-ebi’ to be procured. There is also the cow issue; the contracted butcher decides that outside of his agreed remuneration, he is ‘entitled’ to 20% of your meat! Crates of drinks and especially alcohol slated for the entertainment of guests arbitrarily walk away! There are other sundry and worrisome issues consistently threatening to sabotage the successful hosting of the occasion – renting the hall for one, costs more than the entire cost of burial in many countries!

In the past you will ‘settle’ NEPA to prevent the occurrence of power failure, now you simply rent a generator and bribe the gas station attendant for fuel supply! And while the ceremony is going on, there is the constant deluge of unsolicited demands and requests for money! All kinds of strangers look in your face and lick their lips in anticipation, as if your face had a mint press! Money here, money there! Money, ….money, and more money! it is the only language that is spoken in the nation! By this time you have burned a hole in your pocket and your eyes a blood-shot! You will be hard pressed to remember any tender moment, ….a moment of condolence or sympathy from those who you have come in contact with! It is hard to have any memory of endearment. It is a jungle out there…., a dog eat dog environment!

Alas, when all is said and done, we all come to Facebook and point a finger at the government! Yes, there is absolutely no doubt that the government is largely culpable. But was it the government alone? Was it the government that created all of the horrific situations and the corrosive environment described above? Makes one wonder who constitutes the ‘government’. Are the civil servants not in our midst? Is the government not constituted from the people and the people recruited to form the government? Every Nigerian contributes and carries a fair degree of the problem! – it is the market woman, the butcher, the businessman, the civil servant, the clergy, the politician, the professional, the mechanic, the educated, the uneducated, the old and the young. It is every one of us! Together we have created the hell called Nigeria!

The fact remains that in Nigeria, we worship money and material wealth – it is not just done but also done excessively and unashamedly! It has gotten to the point where we have actually managed to deceive ourselves into thinking that there is no difference between worshiping money and worshiping God! Hence money has become our god and our moral compass has been lost in the process! As one steps outside the border of Nigeria, weighty layers of stress and high-wired tension begins to peel away and fall off! There is no need to go far away – go to nearby Cotonou or Banjul, learn and experience simplicity and peace! It is no wonder there are now an estimated 350,000 to 500,000 Nigerians living in Ghana now, but because we carry our ‘disease’ with us, Ghanaians are now complaining!

The insidious and caustic effect of our evolved culture and our self-defined environment is now dripping with moral decadence, depravity, gluttony and Godless hedonism which has become like a noose around our neck! In due season the stool and support upon which the nation is precariously balanced shall be pulled from under our feet! The next time you are confronted with any obsequious, praise-singing government sycophant, think about the dreams you had about Nigeria in your youth and in your younger days and then think about where we are now, as a nation! How is it that our fatherland has become the hell that it is? As much as the government is guilty, are we the people not equally guilty? As is often said, a nation is only as strong as its weakest link. A government cannot exist in a vacuum – it is an arrangement that requires both leadership and followership. A government may indeed be forced on a people, but ultimately the people determine the character of their government. It must be understood that the circumstance that fosters and engenders a continuous string of persistently depraved leaders in any nation, can only emanate from the putrid bowels of dreadful followers and a deficient populace!

Yes,……. there was a dream called Nigeria in almost every heart and, ……it got derailed, it got abused, it got consumed, it was destroyed and got aborted long before it could be birthed! Indeed the geographical expression called Nigeria has never changed, has never stopped giving. No, ….not once! Her blessings and copious riches simply got abused, mismanaged and debauched by the very people to whom it was intended as a blessing! We should remember that Nigeria did not fail us, much rather we failed Nigeria! It would not be far-fetched to say that the only natural disasters to be found in Nigeria are the people! And peradventure, should you be out, looking for a possible solution to the multitude of problems in the nation, as I have been – look no further! All along, the problem with Nigeria has been staring us in the face – simply look in the mirror!

Anyone Any information from the last 20 years will be appreciated.

I do remember that in 2005, domestic ticket prices were increased to N10,000.00 from N7000 - N7500. I do remember that Chanchangi airlines frequently offered tickets for N7000.00 from Lagos to Abuja and vice-versa.

Hello guys,

I am trying to generate a market analysis based on historical trends, on the impact of currency exchange rate and oil prices on the Airline industry in Nigeria. In other to do this effectively, I need data or information on the cost of domestic Air tickets over the last 20 years! I have scoured the internet for any such information and have had little luck. The only things you run into on the internet a very recent prices, the Dana crash and a host of other bad news! I have no choice but to depend on the excellent memory and historical illustrations of Nairalanders. So here is my question and request;

I AM REQUESTING FOR ANY INFORMATION, LINK OR EVEN MEMORY OF DOMESTIC AIR FARES IN NIGERIA WITHIN THE LAST 20 YEARS! ALL I NEED IS FARE (COST), DESTINATION (FROM WHERE TO WHERE) AND DATE (YEAR OF INFORMATION). THANK YOU ALL IN ADVANCE.

More news.......

http://www.newswire.ca/en/story/848557/eko-rail-s-trains-begin-journey-to-lagos

Here is a video of the Hawker Siddeley H5/H6 Trains currently being used in Toronto that is destined for the Lagos LAMATA project


https://www.youtube.com/watch?v=p68DECEU-fI

Here is more news and information:

http://www.thestar.com/news/transportation/article/1049970--ttc-subway-cars-bound-for-nigeria?bn=1

Nice to see some progress on the Lagos state project. The trains being shown in the picture are Toronto's new Bombardier Rocket Metro trains (being newly acquired by TTC) - the news I read about the project development earlier seemed to indicate that Lagos State was acquiring the Older TTC Metro trains that are being retired (after overhaul of course). However, whatever may be the case - Good job!

The trouble has started, yawah don gazz!!
I warned enough , but my fellow countrymen were too busy jollofing!
This is only the beginning,

If you want to know what petrol will cost after the subsidy has been removed, then take a look at the cost of diesel fuel now! if you want to understand how much instability and fluctuation the market will experience after fuel price deregulation, once again, take a close look at the diesel fuel market! Most Nigerians are not even aware of the fact that the FGN had already experimented the removal of fuel subsidy by surreptitiously removing the subsidy and regulation on diesel fuel!

The domino effect of the escalation of diesel fuel price is what finally destroyed the productivity of small scale industries and businesses which had hitherto been relying on diesel for electricity production. Thereafter cascading into acute capital flight, increasingly desperate unemployment situation and a more deplorable trade balance deficit! It is no wonder Nigeria imports dustbins, toilet paper and even soap!! Ultimately, the Naira currency gets weakened and devalued further - as it is 'Naira' is already $1 to N160! In 2008, 'Naira' was exchanged for $1 to N118!! We are masters of economic principles that make no sense!

Beaf and others, please read this illuminating article:

https://www.nairaland.com/nigeria/topic-806581.0.html



The second part of the article highlights and contains incredible solutions! Pls read that below:

https://www.nairaland.com/nigeria/topic-823617.0.html

Here are examples of 'Otta Seal' roads or highways in Botswana. Botswana has paved over 3000km of its roads with 'Otta Seal' construction methods over the last decade!

A glimpse at what is possible in a 'normal', decently run nation!

I did a little research and realized that the N175 billion accrued for 'highway tax' is the equivalent of $1.1billion annually! , Imagine!!

To give perspective to this amount, let us do a little costing:

- A full reconstruction and renovation of the Sagamu to Benin expressway (HWY A-121), if handled by a serious and competent contractor, using Full Depth Reclaimation (FDR) methods and 'Double Otta Seal' bituminous surface plus a 'Cape Seal' finish will cost between $68.0 million - $72.0 million! The entire road is 282km only!

- To renovate, rebuild and dualize the Benin-Auchi-Lokoja-Abuja road (HWY A-2) which is 460km using the same standards and grades specified for the Sagamu-Benin highway will cost between $161 million and $175 million only!

- An alternative, straight forward, ultra-modern bridge across the River Niger with 'concrete piles' and 'steel spans' which will be capable of handling 4 lanes of traffic (2 each way) plus a two track railway line that is 3000 ft long, would only set the government back between $154 million and $196 million. This is something that will have a life expectancy of 60 years without any major work!

- A  systematic maintenance and upgrade program of all federal inter-state highways could be adopted! Such a program if actively pursued could entail the renovation and rebuild of Inter-state highways using 'FDR' and 'Double Otter Seal' Bituminous resurface with upgraded standards such as  the mandatory and standardized inclusion of (4) four feet wide 'Hard Road Shoulder' on each lane side, making for safe and durable road build standards! If the FGN were to diligently apply this renovation and upgrade program to 8,000km (Yes! , 8000km) of 2 lane federal highway, it would only cost something in the neighbourhood of $820 million - $960 million over the space of say, 5 or 6 years!  (Notice that the 'funds' provide $1.1 billion annually!)

Of course, all these sensible achievements and costs can only be achieved in a 'normal' society NOT one riveted with thieves and bandits who call themselves 'leaders'!

In essence, with a revenue of about $1 billion being spent on roads annually - Nigerian roads will be the absolute best in the African continent and beyond! It is a great shame we have never had a government that is truly dedicated to building up the nation!

Now that there is a final and conclusive part to the article, the place is really quiet!
Many of the noise makers have have had nothing to say!

This is a continuation and a final conclusion of an article that was written a few week ago.

The first part of this article can be read here on Nairaland! Please use the link below to access the first part:

https://www.nairaland.com/nigeria/topic-806581.0.html

The second part of this article is ready!

I spent over a week just trying to upload it but the automated system kept refusing to upload and banning me from further upload!

Anyhow, here is the second part of the article:

https://www.nairaland.com/nigeria/topic-823617.0.html

PART 2: NIGERIAN OIL INDUSTRY AND FUEL SUBSIDY: THE FACTS, THE MYTHS AND THE HIDDEN TRUTH!

by Olumide Iluyomade




This will be the second and final part of an article that presents an insightful look at Oil industry in Nigeria! The first part divulged industry practices, unknown secrets and the corruption surrounding it! The background history of the industry was also reviewed in details while privileged inside information on the current state of affairs and the status quo were divulged! In furtherance to the conclusion and verdict reached in the first part, I promised to proffer solutions to the debacle and the ugly situation that has been a pitfall and a debilitating deadlock for Nigeria’s economic prosperity!

I have always maintained that the persistent problems surrounding fuel subsidy as is practiced in Nigeria today, are an entirely self-inflicted wound! Other attendant issues, difficulties and problems which have arisen from this unnecessary debacle and predicament include an untenably high cost to government, epileptic supply of fuel, poor trade balance, foreign exchange deficit and corruption of mythical proportions! The incumbent administration insists and maintains that the only way out of the deadlock is to eliminate fuel subsidy and deregulate the downstream sector! Needless to say, I am of a different opinion!

Privatization and deregulation are indeed very effective means for dealing with inefficient and ineffective management of public assets. On the other hand however, privatization and deregulation does not always present a socially palatable, humane and balanced solution. In Nigeria, privatization has often become a tool and a vehicle for devious self-enrichment, corrupt aggrandizement and the systemic enslavement of the proletariat by the ruling elites! It has become the universal elixir and antidote, the default response and the all-in-one solution proffered for any challenge or difficulty encountered in the process of governance! Nigerian public officials have now sunken to an all time low, demonstrating  unprecedented intellectual laziness, complete impotence, absolute indolence and an unwillingness to work diligently and steadfastly on simple problems with common sense measures much rather preferring to pilfer and fritter away scarce resources on asinine and selfish solutions that continually make life harder for the longsuffering population!

I neither agree nor believe that subsidy removal and market deregulation are the only viable solutions to existing problems. However, it is most certainly the easiest way out! I do believe that there are better alternatives and solutions which will allow the government to, in essence, have its cake and eat it. A solution that will neither deprive the people of the only benefit they know and enjoy nor burden the government with an insurmountable and debilitating expense! For my claim to be valid however it must be backed up with facts. It must also be backed up with viable and workable solutions! Before proceeding, it is important and logical to take a look at several similar countries with comparable socio-economic circumstances with Nigeria. Let us observe how the benefit of cheap fuel is handled and made available! We shall also seize the opportunity to take a peek at both petrol and diesel prices in such nations:

    NATION                                                           CURRENCY (US Dollar)
 Algeria;         (Petrol) $0.41/litre                   (Diesel)$0.20/litre
 Bolivia;          (Petrol)$0.54/litre                    (Diesel)$0.54/litre
 Egypt;           (Petrol) $0.31/litre                   (Diesel)$0.27/litre
 Guatemala;   (Petrol)$0.64/litre                    (Diesel)$0.54/litre
 Indonesia;    (Petrol)$0.59/litre                     (Diesel)$0.59/litre
 Iraq;              (Petrol) $0.38/litre                   (Diesel)$0.34/litre
 Libya;            (Petrol)$0.17/litre                    (Diesel)$0.15/litre
 Malaysia;       (Petrol)$0.61/litre                    (Diesel)$0.56/litre
 Nigeria;         (Petrol) $0.41/litre                    (Diesel) $1.00/litre
 Venezuela;    (Petrol)$0.04/litre                     (Diesel)$0.03/litre

I have decided to carry out this task in a logical and organized manner so as to enable readers to have a clear and concise understanding of the logic and economic principles being adopted and applied. I am going to proceed with a layout and list the recommended actions that the government needs to pursue and adopt, after which I will go on to pick on each point, elaborating and fleshing it out for a comprehensive and fuller understudy of the details entailed there-in.

For a solution to the perennial problem of fuel subsidy costs and fuel supply issues, the FGN must adopt a lasting solution that will not only stand the test of time but must also encompass and anticipate future challenges! Such a policy must be pursued actively and it must be viable, comprehensive, scalable and robust! The full scope of the objectives earlier stated must be met and implemented without equivocation in principle or in policy! To accomplish this noble and admirable feat, the FGN should pursue and adopt the approaches recommended below - :

1. Establish and Develop a Comprehensive and Viable Power & Energy Policy
2. Stabilize and Revitalize Refineries for Domestic Production
3. Re-organize Ownership and Operational Structure of Refineries
4. Restructure and Re-organize NNPC and Petroleum Sector
5. Expand National Oil-Refinery Capacity and Improve Efficiency
6. Disinvestment, Privatization and Transfer of Assets and Infrastructure




1. Establish and Develop a Comprehensive and Viable Power & Energy Policy:[/b]

This is the first critical objective and step, and it sounds simple enough! However it represents a very powerful and potent method and approach to governance that is seemingly barely understood in the domestic political landscape. I cannot over-emphasize the absolute importance of having a clear, articulate, comprehensive and well integrated policy on both Energy and Power! It is absolutely essential and necessary to understand the correlation and inter-relationship between the issues being experienced in the power sector and the problems existing in the nation’s energy sector.

Quite naturally, the Energy sector encompasses a broad swath of the Petroleum Industry along with other sources of Energy which include all fossil fuel! Fortunately, Nigeria recently passed a decent Petroleum Industry Bill (PIB). This could be updated and integrated into the broader scope represented by a comprehensive Energy Policy. Beyond the petroleum industry, the proposed Energy Bill or policy should encompass the development, management and regulation of the Nation’s comatose Coal Industry.

About a year ago, I wrote about and treated the issue of developing a viable Power Policy separately and extensively and as such I will not be doing an extensive review of the Power sector here. I will however touch on the areas of the policy that are vital and relevant to the current discourse, which is generally Energy related and specifically deals with the downstream oil sector! For Nigeria to experience success in her quest for sustainable economic development and growth, the troublesome dual-headed challenges of Power and Energy must be confronted and resolved! Needless to say, one cannot have one without the other – Power requires and demands a well articulated and targeted Energy policy and vice versa!

The Energy policy of Nigeria should encompass the use of all fossil fuel which includes petroleum products, coal and gas! In this article I will focus on the petroleum products and gas. In the first part of this article (Part 1), I pointed out that in 2009, Nigeria consumed 255 billion cubic feet (bcf) of natural gas, mostly for the generation of electricity. In the same period however, over 530 billion cubic feet (bcf) of natural gas was flared – this unfortunate reality amounts to a colossal waste of valuable energy resources, to say little of the massive environmental impact! Essentially, this means in the absence of a focused and meaningful policy drive, Nigeria flared away twice the amount of natural gas than was consumed for Power generation, while her citizens, industries and economy suffered profusely for want of adequate Power supply!

For a nation with Nigeria’s resources and energy use profile, the crucial and immediate target should be the prudent exploitation of abundant gas resources for electricity generation and greater economic participation, as laid out in the Gas Master Plan. Coincidentally, this means of electricity generation (Gas) also happens to be the most environmentally friendly, the cheapest in terms of capital expenditure and the quickest in terms of construction and installation time! It is been estimated that upwards of 20% of Nigeria’s current domestic demand for petroleum products (particularly petrol and diesel) are directly attributable to the need to provide alternative power supply through the use of back-up generators! Hence the inter-relationship between Power and Energy becomes very obvious and the need to resolve Power deficits in a more wholesome and efficient manner becomes critical!

The proposed Energy policy shall encompass and comprise the gains made in the Petroleum Industry Bill (PIB) which includes the Gas Master-plan and the integration of a newly proposed Refinery Concession Act (RCA). The RCA shall be explained in greater details later on in this article. Also provisions should be made in the Petroleum Industry Bill to allow for the creation of Independent Oil Marketers Co-operative (IOMC) – these are accredited co-operatives or organizations which shall become an alternative to PPMC as an avenue for the distribution of finished petroleum products by lifting bulk products directly from refineries. All in all, the proposed Energy policy should incorporate the following objectives into existing policies:

 Energy policy shall detail, define and organize the Coal mining industry in a similar manner to the Petroleum Industry Bill (PIB). Encouraging and allowing for a cheap and readily available alternative energy source for the generation of electricity.
 Energy policy shall incorporate and integrate the Refinery Concession Act (RCA) into the Petroleum industry Bill (PIB).
 Gas Master Plan shall be singled out for aggressive implementation and enhancement to help achieve a more suitable and ideal National energy-use profile. A predominant proportion of Nigeria’s future electricity production shall be provided for and satisfied through the use of Natural gas.
 Gas Master Plan shall also be expanded to integrate a pilot drive for the introduction and proliferation of petroleum gas powered vehicles! The main thrust of this program shall include several incentives such as low importation tariff for Dual-fuel or Liquefied petroleum gas (LPG) vehicles. Furthermore, LPG shall be sold at an amount not to exceed 60% of the pump price of equivalent petrol.
 Energy policy shall make provision for the establishment, creation and accreditation of Independent Oil Marketers Co-operatives (IOMC). These cooperatives shall help improve and expand marketing logistics and domestic distribution of petroleum products. They shall serve to compliment the activities of PPMC.

2. Stabilize and Revitalize Refineries for Domestic Production:

Achieving this objective is absolutely necessary and essential! Given the straightforward nature of the objective, it is difficult to understand why it has been a near impossible feat for the government to achieve this – perhaps a clear indicator of the scale of corruption within! While it may be true that the government is not the best suited organization for running and operating a refinery or any other enterprise for that matter, it still goes without saying that the government is perhaps the best suited source for financing and executing such a cost intensive project! Privatization pundits and activists often cite and use Western nations as examples of successes in infrastructure privatization however, what they fail to point out is that many of the stated examples are successes that are based on an initial government investment!

Until leadership comes to an absolute understanding of the importance of demonstrating faith in one’s own market and shows a willingness to invest in self, Nigeria will continue to experience difficulties in attracting foreign investors! British Rail may be celebrated as a successful public-private partnership today, but it would not have been possible if the British government had not taken the bold step to invest in the necessary infrastructure! Gatwick Airport today, is celebrated as a successful example of privatization however the Airport first had to be built by the British government before being privatized! All over the world, investors are only interested in investing their funds in established and proven ventures that represent minimum risk to them! Hence, the best way for Nigeria to project a favorable climate is for the Government to demonstrate leadership and take on the capital risk, stabilize and actualize the market, before eventually exiting the scene!

To stabilize and resuscitate refineries, the government must do the following:

 Renovate and restore three (3) of the existing Oil Refinery facilities to original state of optimal performance and production output. These refineries should include: PHRC II in Port-Harcourt, WRPC in Warri and KRPC which is located in Kaduna. These should give the nation an automatic and immediate refining capacity of 385,000 barrels per day (Bpd).
 Repair, restore and secure all oil pipelines that transport feedstock to refineries. Special attention should be paid to the 600km of pipeline between KRPC (Kaduna) and its feedstock source in the Niger-delta. In this way, the unimpeded supply of crude oil feedstock is secured and assured to all refineries at all times.

3. Re-organize Ownership and Operational Structure of Refineries:

Federal government must re-organize the ownership and operational structures of the refineries so as to optimize efficiency. The NNPC refinery subsidiaries and entities called PHRC, WRPC and KRPC shall all be dissolved and liquidated! Subsequent steps shall be taken to establish new structure and management and they include:

 Restructure the three (3) newly renovated Refineries such that each one is separately offered on a concession basis to experienced and qualified refinery operators.
 The terms of the relationship between concessionaires and owner which is the FGN, would be defined as an integral and essential component of the Refinery Concession Act (RCA) which will in turn be integrated into the existing Petroleum Industry Bill.
 Refinery concessionaires are guaranteed and assured supply of crude oil purchased directly from Products and Pipelines Marketing Company (PPMC) under the special terms of Domestic Supply Obligation (DSO).
 Crude Oil feedstock that is derived from Domestic Supply Obligation (DSO) shall be priced to the Refineries at an amount fixed at N4000 per barrel ($25 per barrel).
 Refinery concessionaires are guaranteed and assured a pre-negotiated and pre-determined margin on each liter of finished petroleum product. (For example: N5 per liter).
 Refinery concessionaires are compelled and mandated by the Refinery Concession Act (RCA) to sell back all production output to PPMC or accredited IOMCs.
 If and when domestic demand for a petroleum product has been satisfied and exceeded, any excess shall be channeled by PPMC into the coffers of the federal agency for Strategic National Fuel Reserve (SNRF)
 In the event that the Strategic National Fuel Reserve (SNRF) gets saturated, petroleum products shall be marketed worldwide at current global market price by PPMC. Profits from such sales shall be remitted back to the federal government or relevant agencies.
 Exportation of finished petroleum product shall be strictly prohibited for concessionaires! Any such venture will be regarded as illegal and illicit under the (RCA) law.
 Any proposed or independent Refineries may however apply for an export permit although such ventures will neither be eligible for DSO supply nor subjected to RCA laws!

4. Restructure and Re-organize NNPC and Petroleum Sector:

The nation’s primary representation in the oil industry is the Nigerian National Petroleum Company (NNPC) and it has become an over-bloated, overburdened and inefficient agency which can best be described as a can of worms! NNPC should be dismantled and broken into different independent agencies and companies. The following actions are advised for optimal performance:
 The NNPC subsidiary currently called Nigerian Petroleum Development Company (NPDC) should be rebranded as Petroleum Exploration Company of Nigeria (PECON). Essentially, the repackaging and re-purposing of NPDC to PECON will allow the company to transition from its current structure and function of being the subsidiary of an agency, forging it into a formidable oil exploration and development company with a marketable and recognizable brand! Company will be recapitalized, enhanced and refocused with the objective of not only developing indigenous expertise and independent Oil and Gas exploration capabilities, but to also increase current output from 15000 Bpd to a production output that accounts for 10% of Nigeria’s total oil production! After 54 years of oil production, it has become imperative and a matter of national security for Nigeria to possess such capabilities in other to be able to fully exploit and control her resources independently, to the benefit and the best interest of the people!

 Under the new dispensation, NNPC’s subsidiary – National Petroleum Investment Management Service (NAPIMS) shall retain its current role, mandate and structure with the exception that it shall no longer be a subsidiary of NNPC, but shall be newly reconstituted and rebranded as National Oil Company (NOC) – this is very similar to what is prescribed by the Petroleum Industry Bill (PIB).
 After dissolution, NNPC’s role as a regulatory government agency shall also be transferred to the Federal Ministry of Petroleum and its attendant agencies. Commercial mandates should never be mixed with regulatory mandates and obligations, else there will be a conflict of interest as is being witnessed in Nigeria’s petroleum industry today! The regulation and control of the Oil and gas industry would become the primary focus, purpose and essential function of the Petroleum Ministry. The Petroleum Ministry through the numerous agencies under it (NPD, NPI, PPRA etc) shall monitor and regulate the Petroleum industry in accordance with the mandate laid down in the Petroleum Industry Bill (PIB)   
 Product and Pipeline Marketing Company (PPMC), shall cease and desist from being a subsidiary of the defunct NNPC and have its operations expanded in scope, thus becoming a stand-alone venture and enterprise. Operational scope shall be limited to crude oil and finished product transportation and marketing. In accordance with the objectives of the Petroleum Industry Bill, the federal government through its proxy in PPMC shall independently or in collaboration with private sector stakeholders, invest in the building and maintenance of oil pipelines to distribute essential petroleum products to all strategic and established market zones within the federation and beyond! PPMC shall be fully commercialized in operation and the primary source of income would be through the negotiated transportation fees, commissions, pipeline fees and surcharges - this is the practice in oil industry worldwide!
 Nigerian Gas Company shall also cease to be a subsidiary of NNPC. NGC shall become the primary executor of the proposed ‘Gas Master Plan’ which shall become the center-piece of its operational objective. In accordance with the objectives of the Petroleum Industry Bill and National Gas Master plan, the federal government through its proxy in NGC shall independently or in collaboration with private sector stakeholders, invest in the building, installation and maintenance of gas pipelines to all established market zones within the federation. NGC would also be fully commercialized in operation with a view to future federal government disinvestment and disengagement!
 Other current Subsidiaries of NNPC which include IDSL, NETCO and HYSON, shall be duly commercialized and liberated into wholesome, independent and viable enterprises. The eventual targeted objective for these newly liberated subsidiaries would be for the federal government to divest ownership and control to somewhere between 0% and 40% ownership and equity! This objective can be achieved through the nation’s capital market in less than 36 months with a focused and astute enhancement and repackaging of the products and services provided by these companies.

5. Expand National Oil-Refinery Capacity and Improve Efficiency:

An intelligent assessment of the nation’s downstream sector up to this stage will reveal that the 385,000 Bpd refinery capacity achieved so far might quite possibly fall short of domestic demand! There is also a pressing need to direct or target refinery capacity to produce according to the nation’s energy-use profile. For instance, using the domestic consumption data provided in the first part of this article, Nigeria’s daily domestic demand for petrol at 32 million liters accounts for nearly 60% of all petroleum product consumption (excluding Gas)! This in essence means that Nigerian Refineries must be geared and equipped towards the production of a high proportion of PMS (petrol) from every barrel of crude oil! This therefore brings us to the second phase of the Nation’s refinery capacity development as represented in this proposal.

Oil Refineries are often designed with a specified crude feedstock in mind. The chosen design and construct of a refinery could also be largely influenced by the investor or owner’s intention with regards to final product output! For instance, most oil refineries in the USA are geared and equipped to produce a high proportion of PMS (petrol) from their feedstock which may vary from the West Texas Intermediate crude oil to Saudi’s Arab Heavy crude oil. Other crude feedstock may include Nigeria’s Bonny Light crude or Canadian Heavy crude oil. Because of the high demand for PMS (petrol) in the US domestic market, refineries on the average are equipped to yield between 45% - 49% of their final product as PMS or petrol! This high yield in petrol (PMS) content however, could not be accomplished with a ‘basic’ refinery. Such refineries must be equipped with additional refining components and subjected to specialized treatments such as ‘Catalytic Cracking’, ‘Delayed Coking’ and ‘Hydro-treatment’.

In the Nigerian scenario, local consumption will be comprised entirely of local crude feedstock which is primarily Light sweet crude oil variants - valued worldwide for their low sulfur content and high content yield! Using available statistics and data from an Assay analysis of Nigeria’s most popular light sweet crude oil - Bonny Light, it can be surmised that a barrel of Bonny Light crude processed in a ‘straight’ or regular refinery will yield approximately 28% in Petrol or PMS; 22% in Diesel or AGO; 13% in Kerosene (all types); 30% in heavier Fuel Oil and the remainder as Asphalt, Carbon black and others. A crude oil ‘Assay’ is essentially a chemical evaluation of a crude oil feedstock by qualified petroleum testing laboratories! The need for improved efficiency so as to maximize output in meeting domestic demand is hence made obvious by the limited PMS yield! Nigerian government should therefore increase domestic refinery capacity and likewise, Nigerian refineries could also easily improve and increase the output for high demand products such as petrol. This could all be achieved in one giant swoop by implementing the following:

 The old Port Harcourt refinery called PHRC 1 should be assessed for the most cost effective and efficient approach so as to accomplish a complete revitalization and expansion of its capacity. PHRC 1 Refinery shall be revitalized and have its capacity expanded to 100,000Bpd alongside being given a top to bottom overhaul and reconstruction!
 A Greenfield refinery project shall be commissioned in the new export processing zone of Lagos state. The strategic importance and the huge daily consumption of petroleum products in Lagos state, necessitates such an investment. There will also be an automatic improvement in the logistics of petroleum product distribution nationwide. The proposed refinery would have a capacity of 125,000Bpd.
 Both newly built Refineries, shall be equipped and optimized for high yield production of PMS or petrol of at least 40% so as to meet the nation’s growing domestic demand.
 Existing refineries would also have their operations optimized by the addition or integration of advanced technological processes such as adding ‘Catalytic crackers’ and ‘Coking units’ as may be required to achieve a minimum PMS yield of 40%!
 PHRC 1 and the new Lagos refinery, like the other three refineries would be offered on a concession basis to qualified and experienced refinery operators.
 With the building of two new Refineries completed, Nigeria’s total refinery capacity would now be 610.000 barrels per day (Bpd).

6. Disinvestment, Privatization and Transfer of Assets and Infrastructure:

This is the all important final step in a meticulously planned and targeted six stage, six phase process that is aimed at achieving a sustainable, comprehensive and viable solution to the debilitating and perennial issue of fuel subsidy and its attendant problems. Once the FGN has attained and accomplished its primary objective of facilitating and establishing a comprehensive and viable Energy policy and a fitting capacity for domestic crude oil refining, the stage is now set for the federal government to start the process of divestment and withdrawal from active involvement in the midstream and downstream sectors of the nation’s petroleum industry!

After 48 months of operation under the RCA act, each refinery should be offloaded and transferred off the FGN’s balance sheet by the simple process of disinvestment through public offerings. Aside from the fact that the FGN would have benefited directly and indirectly from its investments, with benefits such as Energy supply stability, employment, reduced foreign dependency, foreign exchange savings and improved trade balance. Other benefits could be accrued directly from the sale of shares and liquidation of earlier investments, this will result in a net gain or profit in the final balance sheet of the federal government! In other to accomplish this final step, it is recommended that the FGN do the following:

 By issuing shares through public market offering in the Nigerian Stock Exchange, FGN should disinvest 60% - 80% of all its investment in the five (5) refineries
 Any concessionaire engaged in the management of a Refinery shall have the first right of refusal in investing in the refineries which will be at a preferred rate.
 Members of the public, indigenous Corporations, Multi-national oil Companies and State governments shall also be given opportunities to invest. As such, the Nigerian public will largely be the beneficiaries of such a privatization drive.
 FGN should maintain and hold 25% - 40% of Refinery ventures and enterprise while recouping investment on the rest of the market value. In this way, the FGN would still retain some measure of control and influence in the affairs of the refineries through its proxy.
 Federal Government should continue to maintain a policy of high incentive for private investments into both the Power industry and the Energy industry. Such incentives should include government guaranteed loans and soft loans, import and export incentives, guaranteed market protection, stability and low risk assurances. The ultimate objective is to encourage an economic shift from crude oil production to the enhanced and added value of finished petroleum products.
 Federal incentives and policies shall encourage further private investments in the midstream sector which could bring refinery capacity from 610,000Bpd to over 1,000,000Bpd.

Just how much Crude Oil do we really consume daily?:
The Domestic Supply Obligation (DSO) which was treated and talked about earlier would be the tool and method by which the FGN shall effect and maintain a low price in the domestic petroleum products market. With an official estimate of 280,000 barrels of crude oil per day being allocated to DSO currently, the allocation should equate to a sizable and generous sized local supply of finished oil products. But just how sizable and generous does it equate to in the face of current daily domestic consumption?

Using the data in the Assay analysis given earlier, the daily yield from the ‘straight’ refining of the 280,000 barrels of Bonny light crude oil being allocated to DSO currently would approximately equate to 12.5 million liters of petrol,10.1 million liters of diesel fuel and 5.9 million liters of Kerosene (aviation fuel & kerosene) daily! An improvement to the refineries output as explained earlier could bring the PMS or petrol production for the same amount of crude oil to 17.9 million liters daily! As has been made evident, 280,000Bpd will simply not be enough to satisfy Nigeria’s domestic demand for PMS (petrol) if the previous data of a daily consumption of 32 million liters per day is to be believed! It is also important to note that neither the demand for diesel nor kerosene (dual purpose and aviation) would be met!

At this stage, it is necessary to reiterate the domestic demand information shared in the first part of this article so as to prevent unnecessary shuttling between documents or pages. In Part 1, it was stated that according to information derived from Transparency for Nigeria, Nigeria’s daily domestic demand is as follows:   

 PMS: Premium Motor Spirit ( Petrol) – 30 to 34 million liters per day (Avg: 32 million)
 AGO: Automotive Gas Oil (popularly known as Diesel) – 12 million liters per day
 DPK: Dual Purpose Kerosene (popularly known as kerosene) – 8 million liters per day
 ATK: Aviation Turbine Kerosene (Known as Aviation fuel) – 2 million liters per day
 LPG: Liquefied Petroleum Gas (known as cooking gas or propane) – 192,000kg per day (15,360 cylinders of 12.5kg each)

Based on this data, it is hence necessary to find out just how much crude oil would be adequate for domestic petroleum product demand. An improved and optimized refining process for the initial national capacity of 385,000Bpd would yield 24.5 million liters of petrol (at 40% yield), 13.5 million liters of diesel and 8 million liters of Kerosene (ATK and DPK). These new numbers still account for a shortfall in supply to the domestic market with regards to both petrol and the Kerosene consumption! Diesel demand would however be satisfied and exceeded at this stage. The current estimate stated above for domestic consumption of fuel products suggests that Nigeria will require a whopping 500,000Bpd of crude oil processed at ‘optimized’ refineries to deliver a daily yield of 32 million liters of petrol, 17.6 million liters of diesel and 10.4 million liters of kerosene (ATK and DPK).

At 500,000 barrels per day, Nigeria’s estimated daily crude oil consumption would require a more careful assessment! This figure represents up to 35% of the crude oil currently accruable to the FGN through its Joint Venture Agreements! We will have to assess and determine how much of the estimated daily consumption is due to real demand, how much of it is due to graft and corrupt inflation and how much of it is due to other factors! Three factors come to mind immediately and they might be responsible for a sizable chunk of the perceived domestic demand.

These three factors include the ever present issue of graft and corruption, Power deficit effect and finally, smuggling activities to neighboring nations! Together, these three factors alone may account for up to 40% of the estimated demand! It has already been assessed earlier that the prevalent use of back-up generators as a primary source of power, as is currently done in Nigeria, may account for up to 20% of petroleum product demand – particularly diesel and petrol! Other estimates affirm that as much as 10% of Nigeria’s domestic demand for petroleum products is attributable to consistent losses and leakages through the porous borders as fuel products are smuggled out into neighboring countries where prices are much higher!

Finally, stories and allegations abound in the nation’s newspapers and in independent editorials, of how the mighty and infamous ‘cabal’ members consistently defraud the federal government by ‘cooking’ up the product delivery account. For instance, a shipment of petroleum product could be delivered to the nation’s port, then taken back out and then re-delivered again as a separate shipment!! This fraudulent practice makes it possible to receive double payments for a single shipment! If these allegations are true, then it is most unfortunate, pathetic and telling of a government that has proven to be as corrupt as it is inept! Beyond that, such actions could also adversely impact the estimate for daily national consumption of petroleum products. The impact of graft and corrupt practices may be as high as 5% of total delivered products!

If my estimation and assessment holds true, a focused and efficient elimination of all the undesirable factors and activities earlier mentioned will reduce Nigeria’s daily consumption of petroleum product by 35% from a high of 500,000Bpd to a more palatable 325,000Bpd! However, the government cannot rest on its oars! Early consideration must also be given to annual demand growth and how it would be contained and accounted for. In many nations, economic and population growth ultimately leads to a point in the nation’s development where domestic oil consumption could outstrip oil production! This has been the case with countries like the Mexico, Egypt and Indonesia. Other nations have found ingenious ways of maintaining a balance as is the case with Brazil. This scenario is however most unlikely in oil rich countries like Venezuela, Saudi Arabia and to a lesser degree Nigeria!

A realistic projection of Nigeria’s annual fuel demand growth could be derived from a formula based on the GDP growth rate, the population growth rate and the vehicular per capita data! Tentatively, an educated guess will put such growth (in real growth terms) at the 7% to 8% bracket. This means that in other for the federal government to sustain and contain domestic crude oil demand while still maintaining its vital stream of revenue from the export of crude oil, there must be an aggressive and active program to grow Nigeria’s oil production capacity and also to develop indigenous oil exploration and production capacity! This mandate could be pursued and achieved through the earlier proposed company – PECON! 

The final part of the strategy to contain annual domestic growth is to enhance and expand the LPG and LNG program that is been specified earlier in the Energy policy (point1) – this should be an integral centerpiece of the Gas Master plan! The bulk of the growth in the domestic market will primarily come from increased demand for cooking fuel, as huge swaths of the growing population migrates to more modern and efficient methods of cooking. A second source of growth in demand for petroleum products will come from an increasingly mobile population - as per capita vehicle ownership increases, so will fuel demand! A third and final reason for growth will be due to an increase in demand for electricity. However, this should ideally impact only Gas and Coal consumption! Migrating and shifting a high percentage of the burden of a growing domestic demand unto abundant and under-utilized Gas resources through incentives and policies, would represent one of the smartest and most effective strategies by government.

What does it cost to produce and refine crude oil?:
To answer this question, we must go through a process. Now that we have resolved the issue of refineries, we can move to the second phase of our problem solving quest! Remember that the FGN has had over 20 years to deal with this issue? An insightful and astute consideration should cause us to ask first of all - what is the actual cost of refining a liter of gasoline if refined locally? What is the actual cost of producing a barrel of oil and how will it impact the cost at the pump for consumers?? According to a US government documents (EIA), a breakdown of the constitution of the actual cost of fuel at the pump is shown below:

-         74% - Cost of crude oil
-         11% - Federal and State Taxes
-         10% - Cost of refining crude oil
-         5-6% - Distribution and Marketing cost

Looking at the statistics given above, it is immediately clear that the reality for the Nigerian scenario would be completely different! In Nigeria, there are no existing taxes on petroleum products, much rather what we have is a clumsy and expensive ‘subsidy’ regime – thus that factor can be removed and eliminated! Secondly, in the Nigerian scenario, the nation is the source of the raw material (crude oil)! If we persist and carry out a little more inquisition and research and we will need to find out the following; what is the actual production cost of barrel of crude oil to the federal government?

The actual cost of producing crude oil in Nigeria, as in any other country, can be broken up into two components. There is the capital expenditure component and there is an operating cost component. It should be emphasized that at the onset of every oil exploration and development project, there is always a huge capital outlay which is facilitated by both parties in a joint venture (JV) agreement – this essentially is the capital cost component. For the FGN, the operational cost component represents costs and overheads that are implicitly embedded in the oil exploration agreement (JV). In other words, the operational cost to the FGN is embedded in the 40% total oil volume that has been forgone to the oil companies!

Remember that by law and by agreement, the federal government extracts, collects and accrues a rent that is equivalent to 60% of all oil exploration projects! When expressed in crude oil volumes, this amount to an average of about 1.5 million barrels per day or two thirty eight million, five hundred thousand liters (238,500,000L) of crude oil per day going to the FGN! Information researched and derived from Reuters factbox established that the average cost of producing crude oil in the Arab Middle-east ranges between US$6 and US$11 per barrel. In Nigeria however, the cost of producing crude oil from onshore fields and shallow water fields is estimated to be about US$15 per barrel.

Having established the invalidity of the tax factor and crude oil production cost, we are only left with the last two factors – The oil refining cost and the distribution & marketing cost. In the American scenario listed above, 10% of the pump price is said to be the cost of refining. At current gasoline pump prices that will make it somewhere between US$0.32c and US$0.39c per gallon! We must however remember that the price of gasoline is a totally volatile and variable value hence the need for more reliable information! Further research and deep inquisitions divulges the critical and sought out data. California Energy Commission documents reveal that the median cost of refining a gallon of gasoline (petrol) in California is around US$0.38c to US$0.40c! This means that a liter of petrol will cost approximately US$0.10c to refine! (3.89L equals one US gallon). We should also note that California has one of the most stringent environmental pollution standards in N. America, plus a considerably higher cost of labor which has not been considered in this assessment.

The final part of the pricing jigsaw is the cost of marketing and distribution. From the information derived from PPPRA’s website in the pricing template section, Transporter’s margin is accorded N2.75 per liter; ‘Bridging fund’ which includes marine transportation is accorded N3.95 per liter; Retail dealers are allowed N4.60 per liter profit margin and Wholesale dealers are allowed a N1.75 per liter profit margin! These account for all of the associated costs of getting fuel to the pump for consumption!

How cheap could cheap fuel be?:
This question is of course variable and anecdotal in nature. In the preceding sections, I have listed and spelled out the necessary actions and commitments that the FGN will have to make in other to achieve a feasible and viable Energy policy. However, what still remains to be seen is how all these actions, investments, policies and commitments will translate into an efficient, stable, sustainable and mutually beneficial arrangement for all stakeholders! The big question therefore is this: how will all these activities enable the common man to buy fuel at a reduced cost?

Petroleum product pricing in Nigeria should be set and fixed with a good measure of sensitivity and strategic economic considerations. In the Nigerian scenario, unlike in many countries, it makes a lot of sense to price diesel higher than petrol. It also makes a lot of sense to position Aviation kerosene on par with diesel fuel price. In line with the Energy policy laid out earlier in this article, it most certainly makes sense that natural gas and cooking gas should be the cheapest fuel of all, in equivalent energy value. Kerosene (DPK) which is often labeled the poor people’s fuel could be priced similar to petrol so as to prevent criminal exploitation and abuse.

In making use of all the collated data in the preceding sections, I will go ahead to calculate and propose a pricing template for the fixing of petroleum product prices. The template is as follows:

Crude oil cost:                                                  N25.00 per liter ( DSO value - N4000 p/barrel; crude oil cost - $15 p/barrel)
Cost of Refining crude:                                      N15.00 per liter (Derived value slightly less than US$0.10c per liter)
Refinery Profit Margin:                                       N5.00 per liter (Based on (RCA) guarantee and agreement)
Distribution Cost:                                              N8.00 per liter (Improvement on PPPRA’s pricing template information)
Retailer’s Profit Margin:                                     N5.00 per liter (Similar to PPPRA’s pricing template)
Wholesaler’s Profit Margin:                                N2.00 per liter (Wholesalers include PPMC and IOMCs)
Federal Government Tax:                                  N5.00 per liter (variable FGN tax can be manipulated to achieve objectives)
TOTAL PRICE OF PETROL:                                  N65.00 per liter??

Like the petrol pricing done above, Diesel fuel price, Aviation fuel price and Kerosene price could all be fixed and set using the preceding template. Based on the FGN’s agenda and policy, the only variable and notable difference would be the federal government tax! Arguably, it makes economic sense to have a higher federal tax on diesel and aviation fuel because of the commercial nature of their use.

Although I hate to admit it, some of the arguments of pro-deregulation advocates also make sound economic sense. For instance, a Federal ‘Energy’ tax and a ‘Highway’ tax could be imposed on all petroleum products with the exception of gas. Hence under this scenario, using the template above, we should have the following domestic prices:

PMS or Petrol:                                              N75.00 per liter (With N10.00 in Federal Energy tax and N5.00 in Highway tax)
AGO or Diesel:                                              N105.00 per liter (With N20.00 in Federal Energy tax and N20.00 in Highway tax)
ATK or Aviation fuel:                                     N105.00 per liter (With N20.00 in Federal Energy tax and N20.00 in Highway tax)
DPK or Kerosene:                                         N75.00 per liter (With N10.00 in Federal Energy tax and N5.00 in Highway tax)
LPG (Auto-gas):                                           N45.00 per liter (Pegged to 60% value of equivalent petrol as per Energy policy)


Conclusion and verdict:
As has been mention earlier, the federal government has had over 20 years to think about, confront and resolve this problem – this is the essence of government! Unfortunately, rather than having a leadership that is genuinely concerned and interested in resolving latent and potential problems, what Nigeria has been saddled with is putrid, corrupt and decadent leadership, year after year, which has led to the debacle and failure we now witness! The nation has now come to the cross road, any decision reached in resolving this issue now will either break or make Nigeria!

The proposal laid out in this article will take time to complete but it can start having massive impact within 18 months of commencement! It will require seriousness and commitment on the part of the government. It will demand focus and hard work – something to which many public officers are adverse! A successful implementation of all the critical steps laid out in this proposal will accrue huge benefits for all stakeholders – the federal government will benefit from eliminating the current subsidy regime! Nigerian citizens will continue to enjoy the privilege and benefit of cheap fuel into the foreseeable future! The private sector and investors will be provided abundant opportunities for active participation and investment opportunities! 

It is also important to emphasize the fact that, in implementing the final price structure which was suggested above, the federal government would get an opportunity to accomplish its second objective – which is to raise capital for further development of infrastructure in the nation. A simple assessment of the suggested pricing structure above, using current domestic demand rates, reveals that the FGN could accrue a revenue stream of N680,000,000 per day (Six hundred and eighty million daily!) on ‘Energy tax’ alone! If this is accumulated in a special Energy Trust Fund, it will amount to N248,200,000,000 per annum! (Two hundred and forty eight billion, two hundred million Naira annually) This fund could be used to finance the investment required for increasing electricity demand (power plants) and other upstream infrastructures!

Likewise, the suggested pricing structure will generate another N480,000,000 per day (Four hundred and eighty million daily!) on the ‘Highway tax’ component alone! The annual value of this embedded tax will total to N175,200,000,000 per annum! (One hundred and seventy five billion, two hundred million per annum). Such a fund, if applied diligently on an annual basis to the improvement and construction of new federal highways, would move the nation very far in her quest for infrastructural development and economic growth!   

A final embedded benefit of this proposal is the implicit gain of self-reliance! If the negotiated and fixed price of DSO is N4000 as has been suggested, then what happens thereafter is that an implementation of the proposal will bring about all round economic growth, which will in turn improve the value of the Naira. Ultimately, a higher value for Naira would implicitly increase the actual value being received for DSO crude without changing the pump price of petroleum products! For instance, N4000 is equivalent to $25 (at the current exchange rate) however, if the value of naira were to increase, then N4000 may be equal to say ….$33.33 (at exchange rate of N120 to the dollar)!

It would be fair to say that I have expended considerable energy and time in coming up with this proposal however, it would also be fair to say that there are possibly several other solutions and ways of resolving this problem. I am well aware of the fact that this proposal, like any other proposal, can be improved upon by knowledgeable groups, think-tanks and committed professionals. After all, it is said that in the school of thoughts, there are no graduates! However, what this article and proposal represents are facts and a truth that is devoid of emotions! A glimpse at what is possible in the absence of absolute corruption. A glimpse at what could be accomplished by intelligent, selfless, committed and prudent leadership! These, essentially, is what is most lacking in the nation’s polity and politics – a paucity of vision and leadership that ultimately hampers the people’s aspiration for a promising and brighter future.