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Remove Fuel Subsidy Now! World Bank Tells Buhari. by drss(m): 7:36am On Dec 09, 2015
By Henry Umoru, Emma Ovuakporie, Michael Eboh, Joseph Erunke, Johnbosco Agbakwuru & Grace Udofia
ABUJA—Against the backdrop of the current fuel crisis across the country showing no sign of abating, the World Bank, yesterday, told President Muhammadu Buhari that the time to remove petroleum subsidy is now.

While the Buhari administration has given hints of its intention to remove fuel subsidy, many Nigerians, including the organised labour, have rejected the plan. But in what appears to be a prelude to the eventual removal of fuel subsidy, President Buhari made no provision for kerosene subsidy in the Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, which he presented to the National Assembly, yesterday.budget

At Monday’s Federal Executive Council meeting, the Minister of Budget and National Planning, Udoma Udoma, while unveiling the Medium Term Expenditure Framework and the government’s N6 trillion budget proposal for 2016, said the government was seriously weighing the options between removing or retaining fuel subsidy next year.

Speaking at the launch of the new edition of Nigeria Economic Report, the World Bank’s Lead Economist, John Litwack, said the best time to remove fuel subsidy is now when global crude oil price is at its lowest level, noting that the Bank foresaw continuous decline in global crude oil price.

Despite last Friday’s attempt by the Organisation of Petroleum Exporting Countries, OPEC, during its 168th conference to maintain its production quota so as to stabilize the crude oil market, the price of the commodity slumped further to $37.89 per barrel on Monday from $38.09 on Friday.

Mr Litwack said now is the best time for the government to scrap the subsidy, as doing so would not push retail pump price beyond an average of N100 per litre, or generate the kind of pressure that would negatively impact on the people beyond what they are currently facing.

According to Litwack: “The fuel subsidy appears to have vast modest benefits for the majority of citizens, but the costs are quite high. There is a strong tendency for the cost of fuel subsidy to increase over time as increasing domestic demand for petrol outpaces growth in oil output or revenues.

“The $35 billion cost of fuel subsidy during 2010 – 2014 was one of the reasons Nigeria was unable to accumulate a fiscal reserve in the Excess Crude Account that could have protected the country from the recent oil price shock.”

He explained that fuel subsidy obligations were expected to reach 18 per cent of all government oil revenues in 2015, pointing out that if the current regulated price regime of N87 per litre was maintained, subsidy was projected to increase to more than 30 per cent by 2018.

2016 Budget: Buhari scraps kerosene subsidy

Meanwhile, President Muhammadu Buhari may have tacitly scrapped kerosene subsidy in the country as he made no allocation for it in the Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, which he presented to the National Assembly, yesterday.

The document indicated that the present federal administration is to borrow N1.835.88 trillion to fund the 2016 budget which stands at N6.04 trillion just as it disclosed that a total sum of N350.33 billion misappropriated funds will be recovered in 2016 .

A breakdown showed that while N1, 200.00 trillion would be borrowed domestically, foreign borrowing stands at N635.88 bn.

On the misappropriated funds, the president explained in the Medium Term Expenditure Framework that N137.90 billion will be recovered from strategic alliance contracts, while N162.43 billion will be recovered from the Nigerian National Petroleum Corporation, NNPC just as N50 billion will be recovered from other misappropriated funds.

But contrary to expectations that he would remove fuel subsidy following series of complaints arising from its handling, the President did not only retain it but allocates the sum of N63.29 bn for it in the 2016 fiscal year.buh

Also, in his efforts at fulfilling his 2014 electioneering campaign promises, President Buhari allocated the total sum of N500 billion for Social Welfare Intervention Programmes Initiative, conditional cash transfer to the most vulnerable and post-NYSC grant.

He explained that “these interventions will start as a pilot scheme and work towards securing the support of donor agencies and our development partners in order to to minimize potential risks.”

N39.88 billion for oil exploration in the North

The president, according the document, is expected to spend the sum of N39.88 billion for exploration of oil in the northern part of the country in the, 2016 fiscal year.

According to the MTEF submitted, the sum of N150 billion was earmarked for settlement of arears of the 2015 subsidy on domestic consumption.

This came as he slashed the yearly budget of the National Assembly from the sum of N120 billion contained in the 2015 budget to N115 billion in the 2016 fiscal year.

He equally trimmed down the allocation for Presidential Amnesty Programme from N47.39 billion to N20 billion.

To improve revenue generation and collection as well as plugging leakages, the president said his administration had commenced a forensic audit of key revenue generating and collecting agencies of government with a view to recovering lost revenues as well as identifying and blocking loopholes for poor collection and remittance of revenue in the treasury.

The president added that the multiplicity of government accounts had made it difficult to have an accurate picture of public financial resources.

“Government has, therefore, enforced the full implementation of the Treasury Single Account, TSA system. Already, this is facilitating a more effective aggregate management and control of government cash balances, which, hitherto, had been maintained in several bank accounts.

“Government has similarly, enforced the full implementation of the integrated payroll and personal information system, IPPIS in all MDAs, which should result in some cash, “he explained.

President Buhari hinted of possible job cut as well as mass reduction of MDAs, when he said: “Government will, in the near-to-medium – term, continue to prune the size of federal government and its MDAs to more efficient levels without compromising effectiveness.

“Over the Medium-term, however, government will revisit the need to rationalize the agencies of government and strategically implement relevant provisions.”

The president said the 2016 Budget, standing at N6.04 trillion, proposed government revenue of N3.82 trillion, implied a projected deficit of N2.22 trillion.

No hope in sight, as fuel scarcity bites harder

The fuel crisis continued in Abuja, yesterday, as motorists continued to find it more difficult to get the product, with some queueing for a minimum of four hours before getting the product to purchase.

The fuel crisis showed no sign of abating, as the queues continued to grow longer while the number of petrol stations with the product continued to decline.

Despite the sufferings, the Federal Government, the Department of Petroleum Resources, DPR and the NNPC, seem to have abandoned Nigerians to their fate, as they have kept mute in spite of the worsening situation.

The DPR failed to respond to enquiries on its efforts at alleviating the sufferings faced by Nigerians, while the NNPC had stopped sending its daily update of supply to petrol stations across the country.

In Suleja, most petrol stations were selling fuel to motorists, but the queues were long while motorists accused the filling stations of under-dispensing, claiming that their pumps had been tampered with.

At the Airport Road in Abuja, most of the petrol stations were not opened when Vanguard visited, while the few selling, NNPC and MRS, witnessed large number of vehicles and very long queues.

In Lugbe, only MRS petrol station was selling, while the other petrol stations where shut down, claiming they have ran out of the products to sell.

At the Conoil and Total petrol stations opposite the Nigerian National Petroleum Corporation, NNPC, headquarter in Abuja, the queues had gone round about four streets, inhibiting traffic in the process.

At the Forte filling station in Gudu, a long queue was seen, with motorists spending long hours on the queue, while the situation was no different at Yaman petrol stations in Area 3, Garki, Abuja.

In Gwarimpa, most of the petrol stations were shut, including the NNPC station inside Gwarinpa , as the station was shut to motorists.

Along the Abuja – Keffi Expressway, only Forte Oil at Nyanya was selling, while all the NNPC retail outlets around Nyanya were shut down.

Along the Kubwa expressway, the large queues witnessed at the NNPC retail outlets at Katampe and Total filling stations continued and showed no sign of improvement. Some motorists told Vanguard that they have been on the queue for about four hours and called on the Federal Government to do something about the situation.

Due to the worsening scarcity, widespread incidences of sharp practices were recorded in most petrol stations, with rising cases of under-dispensing, hoarding and exploitation.

Also, most petrol stations no longer sell to motorists during the day, as they only sell at night when they feel they could get away with whatever sharp practices they are engaged in. Most of them sell to black market dealers in drum and other large containers at the dead of the night, while during the day, they claim they do not have products to sell.

http://www.vanguardngr.com/2015/12/remove-oil-subsidy-now-world-bank-tells-buhari/

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Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by jojomario(m): 7:38am On Dec 09, 2015
End users are currently buying at #130- #150. The most important is the availability of the product. If the removal will weed the corrupt individual, then, SAY NO TO SUBSIDY.

26 Likes 4 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by oluseyiforjesus(m): 7:40am On Dec 09, 2015
undecided
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by MKO4ever(m): 7:40am On Dec 09, 2015
I believe this is just an advice and not an order

1 Like

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by NewIdeas: 7:45am On Dec 09, 2015
Sometimes i just wondered what Nigeria could have looked like without fuel.Other countries that have no fuel still survive.

26 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by makizee(m): 7:48am On Dec 09, 2015
I agree, we cannot continue to spend trillions of naira on so called subsidy while critical infrastructures continue to fail, with the cheap price of oil, the price of pms is not expected to be up to 100 naira. the time is now

18 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by koladebrainiac(m): 7:48am On Dec 09, 2015
YES

1 Like

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by BeeBeeOoh(m): 7:49am On Dec 09, 2015
Nigeria - Oil= Non Existing

2 Likes

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by AngryNigerian(m): 7:51am On Dec 09, 2015
“The $35 billion cost of fuel subsidy during 2010
– 2014 was one of the reasons Nigeria was
unable to accumulate a fiscal reserve in the
Excess Crude Account that could have protected
the country from the recent oil price shock.”


Lie...big one!!! The rampant, uncontrolled & shameless looting & the gang-up by the former governors to share the money is the cause of for our woes...

What is a single man doing with $2.2billion! Or how do you comprehend the Lamordegate worth $50,000,000,000!!! I even feel like puking on the mention of that amount!!!

9 Likes 2 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by yehmi01(m): 7:52am On Dec 09, 2015
ok
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by permsec: 7:57am On Dec 09, 2015
Fuel subsidy is a scam- El Junketeer

16 Likes

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by 1shortblackboy: 8:04am On Dec 09, 2015
When oga Jona wanted to remove d subsidy. D misinformed illiterates were protesting. Make una continue

82 Likes 10 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by RockMaxi: 8:05am On Dec 09, 2015
1shortblackboy:
When oga Jona wanted to remove d subsidy. D misinformed illiterates were protesting. Make una continue



I can't believe my eyes that people like you still exist with this sentimental and uninformed mindset about subsidy under GEJ.

17 Likes 2 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by drss(m): 9:56am On Dec 09, 2015
1shortblackboy:
When oga Jona wanted to remove d subsidy. D misinformed illiterates were protesting. Make una continue
no mind d occupy nigeria zombies. Buari way we know will never remove fuel subsidy. By d time international fuel price mistakenly climbs up, fuel subsidy will finish d zoo.

41 Likes 4 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:02am On Dec 09, 2015
When the last admin did...misguided folks took to the streets and hauled insults at the admin for days.

The same admin reduced the subsidy a used part of the money to fund youths and health care inform of the "sure p" program. The same misguided youths hauled more insults to the admin..

Now the admin they love so much is here, that paid more subsidy and fuel is selling at 140 everyone is now forming deaf and dumb. With their rumoured refinery now shut down...let's see their next move

56 Likes 9 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:05am On Dec 09, 2015
RockMaxi:




I can't believe my eyes that people like you still exist with this sentimental and uninformed mindset about subsidy under GEJ.
pls, educate us Mr. All-knowing..now you dummos have lead us to this doom, you want to wriggle your way out

41 Likes 5 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:10am On Dec 09, 2015
Let us be sincere about this fuel issue. For the past one month, i like most Nigerians have been buying fuel between N130 to N300 per litre.

If subsidy is removed, at what price will a Nigerian buy fuel ? If it isnt more than N130, let subsidy be scrapped and let MARKET FORCES, and PRICE OF CRUDE determine the price of fuel..

What a wise government should do at this point is to pay off the outstanding amounts owed importers of fuel and inform them that subsidy ceases to exist in December 2015

Then Nigerians will witness how massively these importers will import the product such that competition among them will drive the price downwards..

18 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:22am On Dec 09, 2015
Naughtysite:
Let us be sincere about this fuel issue. For the past one month, i like most Nigerians have been buying fuel between N130 to N300 per litre.

If subsidy is removed, at what price will a Nigerian buy fuel ? If it isnt more than N130, let subsidy be scrapped and let MARKET FORCES, and PRICE OF CRUDE determine the price of fuel..

Kachikwu recently said that the price would not go beyond N100 per litre if subsidy is removed so i wonder what the FG is waiting for to kick out subsidy once and for all.

Market forces should determine the price of fuel depending on the marketer; there should be competetion.

7 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:38am On Dec 09, 2015
EUROBOMBER:


Kachikwu recently said that the price would not go beyond N100 per litre if subsidy is removed so i wonder what the FG is waiting for to kick out subsidy once and for all.

Market forces should determine the price of fuel depending on the marketer; there should be competetion.

We have many problems with the leadership at hand. INSINCERITY, INCOMPETENCE and PAROCHIAL INTERESTS.

Two weeks after Dangote issued a statement about his upcoming Oil refinery and how subsidy will benefit it, Buari CHANGEd his statement that " I have not seen enough reason to scrap subsidy "..

Some leaders be like the proverbial driver of a sports car who because of his daftness, disturbs other road users as if he is controlling a Trailer..

10 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by alakara(m): 10:49am On Dec 09, 2015
I don't think subsidy can be removed now.Why no local refinery is producing optimally. Forces of dd and ss doesn't always dictate price in Nigeria. Prices are dictated by Cabals in the market. Especially petroleum products.
Govt should empower private individuals to float refineries like 5-10 then remove subsidy otherwise we are on it.

2 Likes

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by BRAV0O(m): 10:50am On Dec 09, 2015
Lalasticlala what if this kind of thread debate on front page, apart from every one of us supporting this current administration there are some certain truth need to be told if nigerians will still suffer for fuel with subsidy active then the subsidy need to be scrap asap let's know where we are going pls, and for those saying some jargons about the past subsidy protest I beg u to get ur facts right and don't be quick to point finger at anyone , I believe that ur common sense should tell you the protest is political motivated and was hijack by those benefiting from the so called subsidy and Gej cabinet are not being straight forward...
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Meriekriss: 10:56am On Dec 09, 2015
I thought fuel subsidy didn't reflect in the 2016 proposed budget..




Check my signature for your total interior decoration solutions..
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Nobody: 10:57am On Dec 09, 2015
Naughtysite:


We have many problems with the leadership at hand. INSINCERITY, INCOMPETENCE and PAROCHIAL INTERESTS.

Two weeks after Dangote issued a statement about his upcoming Oil refinery and how subsidy will benefit it, Buari CHANGEd his statement that " I have not seen enough reason to scrap subsidy "..

Some leaders be like the proverbial driver of a sports car who because of his daftness, disturbs other road users as if he is conrolling a Trailer..

Are you serious? shocked shocked shocked shocked

Gbawe
Beremx
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by speedyGonzales: 11:00am On Dec 09, 2015
[size=16pt]I Actually Support this, at-least World Bank have accomplished economic eggheads working for them.[/size]
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by 1shortblackboy: 11:03am On Dec 09, 2015
RockMaxi:




I can't believe my eyes that people like you still exist with this sentimental and uninformed mindset about subsidy under GEJ.
please what are u getting at

4 Likes

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by richidinho(m): 11:04am On Dec 09, 2015
no...dont try it
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Firefire(m): 11:35am On Dec 09, 2015
Why

5 Likes 1 Share

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by Firefire(m): 11:36am On Dec 09, 2015
If dem born Buhary well make he try that nonsense. angry


APC & Buhary have no moral justification to remove the fuel subsidy having canvased against same in time past.

19 Likes 5 Shares

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by silvermania(m): 11:36am On Dec 09, 2015
Like seriously
Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by waterhouse071(m): 11:37am On Dec 09, 2015
Nigerians are obviously not benefiting from the subsidy. Imagine the subsidized fuel is currently being diverted to neighboring countries by greedy marketers.

1 Like

Re: Remove Fuel Subsidy Now! World Bank Tells Buhari. by allanphash7(m): 11:37am On Dec 09, 2015
You are right bro




Japan has no single natural resources and yet they still survive
NewIdeas:
Sometimes i just wondered what Nigeria could have looked like without fuel.Other countries that have no fuel still survive.

3 Likes

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