Times are tough, no doubt. The situation we find ourselves as a nation is dire, no doubt. As the FG announced the new price regime for fuel pump price from 87 naira to 145 naira max, a lot of people including on this forum have criticized the action of the government and accusing it of insensitivity to the plight of the common man.

While this article is not deliberately focused on the past administration of GEJ and how it managed our resources, it’s nearly impossible to attempt to justify the current government’s action without needing to make reference to the oil boom period of 2011 to 2014. Had the immediate past administration judiciously utilized what we earned and what it inherited from OBJ/Yar’Adua, it’s very unlikely that we will find ourselves in this messy situation.

While I don’t oppose a government providing palliatives to its citizens to cushion effects of high cost of essential commodities, it makes no economic sense to do that if there are no resources to do it. Nigeria with a paltry $27 billion dollars in foreign reserves (GEJ met it at $47 billion, earned more than any president in Nigeria’s history, yet depleted it to abysmal level), $2 billion in Excess Crude Account, lacks the resources to subsidize fuel.

In the same way, it will be disastrous to support a corrupt regime to remove subsidy from essential commodities while the president watches helplessly as his foot soldiers defraud the citizens and enrich themselves corruptly. Numerous corruption cases ongoing is a reminder of how GEJ allowed the Dasukis, Bafarawas, Akpobolokemis, Mettuhs, Diezannis, Inde Dikos and many others steal us blind.

Brief History of Fuel Subsidy
Beginning from when OBJ re-introduced fuel subsidy in 2006 as a palliative for high landing cost of imported refined fuel, Nigeria has spent more than N6 trillion to subsidize fuel since then
*2006 – N151.9 billion; *2007- N188 billion; *2008 – N256.3billion (January to July); *2009 – N421.5billion; *2010 – N673 billion; *2011 – (N1.3 trillion)revised to N2.19 trillion; *2012 – N888 billion + N161.6 billion supplementary *2013 – N971 billion; and, *2014 – N971.1 billion
http://www.vanguardngr.com/2015/05/why-fuel-subsidy-must-go-2/
The amount spent on subsidy in 2015 was in excess of N1 trillion
http://www.dailytrust.com.ng/news/general/nigeria-spends-n1tr-on-fuel-subsidy-in-2015-kachikwu/124416.html

Why Fuel Subsidy Is Not Sustainable Now
It’s not a hidden fact that our earnings from crude sale has nose-dived; more than halved from what it used to be. The average crude price per barrel now is below 30$ since beginning of this year. When compared to an average of $90 to $100 for the four years of 2011 to 2014, no one need a rocket scientist to understand the money to subsidize the product is no longer there.

Throughout the world, all countries that have their economy largely dependent on crude oil have experienced economic set-back and most of them have taken drastic actions to cut back on their expenses on subsidy. Saudi Arabia, at the beginning of crude price fall had more than $600 billion in foreign reserves, yet she increased fuel pump price by 50% http://money.cnn.com/2016/01/05/news/economy/saudi-arabia-oil-budget-gas/.

Qatar increased fuel price by about 35% and still planning to increase it further, UAE and many other Gulf countries refine their own crude locally, can afford to keep subsidy, yet have all removed some subsidy from petroleum products. The only places where fuel prices have gone down since crude price crash are the economies that were not enjoying any form of subsidy when crude price was high.

Going by this summation, it amounts to irrationality, lack of having any grasp about happenings in the world economy, or pure and deliberate emotional blackmail to expect Nigeria to be able to keep subsidizing fuel especially with her current economic recession.

Why Nigerians Were Right to Oppose GEJ’s Subsidy Removal in 2012
I, among many other Nigerians were opposed to GEJ’s plan to remove subsidy from petrol in 2012 and here are some of the reasons:
1. GEJ by then had already proved to be shamelessly corrupt and lacking the political will to stem the tide. So, we were right to believe that the subsidy to be removed will still end up being looted one way or the other. Events since after the partial removal have proved us right as not a single measure of the promised palliatives was fulfilled. No mass transit buses. No new refineries as promised. No new roads built as promised.

2. Nigeria was earning excess from crude oil as at then. As such, we should be able to enjoy some part of the excess profits through subsidy. If ministers, Special Advisers and other top government officials were stealing us blind and we saw them, why should we not have a right to some subsidy which was paid for by the excess earnings from our crude?


The Way Forward
For Nigeria to get out of the fuel crisis quagmire, there are certain things we should be doing but are failing to do:

1. Diversify the economy: In the past, lip service was paid to economic diversification. To be sincere, we have missed our best opportunity to diversify our economy with little or no pain. The second best opportunity is NOW which unfortunately comes with pains and sacrifice. We cannot expect the government of PMB to diversify the economy and not plough resources from subsidy towards the diversification; especially when we are earning far less than we require now.

2. Build more refineries: Without having the capacity to refine our local petrol demand in the next two to three years, fuel price will go up further and we will be back to square one when crude price goes up astronomically again. It’s good to hear that the FG in partnership with some businesses is planning to have new refineries on board within three years from now. I hope it comes to fruition.

So, should we find ourselves in the same position as 2012, with a president who acts like GEJ, I am certain Nigerians will resist any attempt to remove the fuel subsidy. But given the current economic situation and the type of president we now have, it will be unpatriotic not to support him. Even his worst detractors know in their deep heart that this president is not an IB and not a corruption personified.

Constructive criticism is welcome. Empty brains should stay away!

The only write-up worthy of appreciation or/and reading now should be: Jonathan was right on subsidy removal.

Tell us the flaws of Ojota's sponsored bring-back our subsidy protest.

Condemn every opposition and demonization of Jonathan's administration on Subsidy removal January, 2012.

Blast every anti-deregulation cabal and opposition to Jonathan administration second push to total deregulation when he re-echoed it six months after the previous was defeated.

Do you know that the two challenges that escalated looting in Jonathan's administration was imposed on him? I mean fuel subsidy and Bokoharam. Both anti-deregulation and Bokoharam were sponsored to bring down Jonathan's administration and there they succeeded.

Let's for once appreciate some of the great policies of past administration.

Chai!

The plain reality is that Jonathan was right. Unfurling layers after layers of semantics doesn't coat your double-standards.

Meanwhile, in one breath, you ridicule him for not saving during the days of boom. In another breath, you post this:

2. Nigeria was earning excess from crude oil as at then. As such, we should be able to enjoy some part of the excess profits through subsidy.

Make up your mind

I dey come, i wan go lipia jenelator & queue for petlo....


*modified* where were we...

I personally won't try to justify fuel subsidy removal at this period and it's not because it lacks merit (subsidy is a conduit for corruption and i'd take steady electricity, motorable roads, better healthcare, product availability & improved infrastructures over subsidized petrol but that is me in my personal capacity) but cos the situation of the country is dire but I believe may 29th address, the president would announce a 30-35k minimum wage band cos anything short of this would ensure a lot of mass suicide.....


All we hope is that unlike the 65-97 naira partial subsidy removal scam of SURE-P, we will see something tangible!!! E go better..


Dropshot, welldone...

Nice article!!!!!!!!!

Passingshot never disappoints!

Nice one!

LadyExcellency:
The only write-up worthy of appreciation or/and reading now should be: Jonathan was right on subsidy removal.

Tell us the flaws of Ojota's sponsored bring-back our subsidy protest.

Condemn every opposition and demonization of Jonathan's administration on Subsidy removal January, 2012.

Blast every anti-deregulation cabal and opposition to Jonathan administration second push to total deregulation when he re-echoed it six months after the previous was defeated.

Do you know that the two challenges that escalated looting in Jonathan's administration was imposed on him? I mean fuel subsidy and Bokoharam. Both anti-deregulation and Bokoharam were sponsored to bring down Jonathan's administration and there they succeeded.

Let's for once appreciate some of the great policies of past administration.

As I said, he would have been right and successful if he had not proved to be corrupt and ineffectual. End of story.

When I first heard the word PSYCHOLOGY, I spelt it as SYCOLOGY. I didn't know there was a silent P
When APC promised us N45 as pms pump price, I didn't also know there was a silent 'hundred'
*Copied*




Btw op doesn't live in Nigeria and he won't be the one to feel the heat of this removal. For example he won't be the one buying tomatoe for N5000 just to make a pot of stew but zombies already supporting him as expected.
Even the zombies are looking for any visa at all to jet out of Nigeria cos of hardship but they have to come here to defend shit just to save face.

One year in office and Nigeria has bn taken 10 years backward. Yet they're still promising u change on top of cancelled promises
By d time those guys finish with this economy, $1 will be N1000
You don't trust GEJ but you trust the faces of change. Yeye de smell

DesChyko:
The plain reality is that Jonathan was right. Unfurling layers after layers of semantics doesn't coat your double-standards.

Meanwhile, in one breath, you ridicule him for not saving during the days of boom. In another breath, you post this:

Make up your mind

The plan was right but he didn't have the trust of Nigeria not to waste the ploughed back subsidy.

If the scenario occurs again with GEJ at the helms, we will resist him. There lies the difference.

Fuel subsidy is gone for good

Next........

Obviously the subsidy is no longer sustainable, but the kind of hardship it will trigger will be life threatening. The minimum wage ought to have been amended long long ago to accommodate this kind of increase.

Be back in a jiffy. Gotta clear up my desk.
But in the mean time, Lalasticlala, consider this thread for a moment. Thanks.

DropShot:

The plan was right but he didn't have the trust of Nigeria not to waste the ploughed back subsidy.

If the scenario occurs again with GEJ at the helms, we will resist him. There lies the difference.

You will resist. I wouldn't. I never will. Not then. Not now. I took my time to understand fully the implications of deregulation of the petroleum sector, citing the telecommunications companies and its advantage to Nigerians. This was critical to my mindset over the fuel subsidy issue.

The fact is that whether or not people had misgivings about the deals behind the telecommunications sector, it didn't stop Nigerians as a whole from enjoying the benefits. The same thing is applicable to the fuel subsidy.

Hiding behind an excuse of corruption charges fools no one who has a concrete idea of how the machinery of deregulation works. It is obvious that on this issue, we just went four years and four months backwards. Better late than never. The only problem is that there is a poor enabling environment for this to work to perfection at the moment.

good

DropShot:

As I said, he would have been right and successful if he had not proved to be corrupt and ineffectual. End of story.

Tell me more, 7 months into his inauguration?

You are wrong, nobody questioned or came up with Jonathan's integrity after 7 months into his administration until your fake, sponsored and bigoted anti-deregulation protest.

His approval rating was at all time high of 70+ on December, 2011

Speaking about TRUST based issue,We need to go a little back and capture the spirit of the times pre election and critically examine and understand the relationship/disconnect between buhari words and actions.

Using buhari Eldorado Champaign campaign promises to judge current realities,You would appreciate that Buhari should be in jail for murdering trust! Buhari is a closet rogue like every other politician. That sainthood and trust only flies with zombies.

LadyExcellency:


Tell me more, 7 months into his inauguration?

You are wrong, nobody questioned or came up with Jonathan's integrity after 7 months into his administration until your fake, sponsored and bigoted anti-deregulation protest.

His approval rating was at all time high of 70+ on December, 2011

With the way and manner Buhari has handled our economic affairs through command and control medieval approach in the last 10months, it's not surprising were the nation found itself today.He couldn't even face and address the nation on live tv but chose to delegate the responsibility to his vice who would be the fall guy once it backfires.

Integrity my foot.Buhari should have been fantastic as Efcc chairman.

LadyExcellency:


Tell me more, 7 months into his inauguration?

You are wrong, nobody questioned or came up with Jonathan's integrity after 7 months into his administration until your fake, sponsored and bigoted anti-deregulation protest.

His approval rating was at all time high of 70+ on December, 2011

No sir. He had already proved to be Ineffectual since his days as acting president and later president in 2010.

...

989900:
While removing subsidy is not a bad thing in this context, bar the wrong timing (we still import refined fuel which is a shame), I'm not going to make excuses for the Buhari administration as regards refineries (both existing ones and the promised modular ones), nor am I going to excuse it from not dealing decisively with vandalization either peacefully or forcefully . . . throw in our 'little' problem of cross-border smuggling which accounts for about 30% of our Forex and oil.

OBJ and GEJ got us in this mess (16 years and over 20 refinery licences issued without a functioning refinery)!

PMB is 1 year old, and we still can't place a handle on a certain dependable amount of refined products locally -- that's a shame!

The promises are far from the reality.

Honestly speaking....

Fuel subsidy is nothing but fraud.

But this present government is unserious one.

...

juman:
But this present government is unserious one.

How?

Esseite:
The op has a good source of income and can afford to cut cost.... now imagine those managing from the very start and cutting down is death?...

How do you know anything about me?

DropShot:

How?

It's attitude. Times are harder for majority of Nigerians, cost of most goods and services will increase in days. Since more money would now be available to the FG, I thought I'd hear of plans to increase the minimum wage of the Nigerian worker cause their purchasing power has now been reduced by this increase. You can't just tell the people to endure the pain if you can actually do something to lighten their yoke.

DropShot:

How?

They have got nothing right since they came on board.

juman:


They have got nothing right since they came on board.

That's because you've chosen to be blind to it.