PoliticalWitch:


And the beauty of democracy is that you are meant to hold your leaders accountable.

The thing is, most Nigerians (me inclusiive) won't do the hard work of democracy...ie accountability. They just think that it is all about voting X or Y and then go home.

post=83089903:
okay

PoliticalWitch:


And the beauty of democracy is that you are meant to hold your leaders accountable.

The thing is, most Nigerians (me inclusiive) won't do the hard work of democracy...ie accountability. They just think that it is all about voting X or Y and then go home.

PoliticalWitch:
Well, one solution is to remove fuel subsidies...

Here is the thing. Fuel is being smuggled to neighbouring countries...because

1.In Benin, fuel is N298. In Niger, it is N370, and in Cameroon it is at least N300 per liter.

2.Subsidy works this way. Importers buy fuel at N200 per liter, and sell it to depot at N137. Government pays the difference (N63) between the cost of importation and sale...meaning many importers cannot make a profit.

3.So importers import fuel, smuggle some across the border....and make a cool profit.

4.Also, a lot of fuel marketers make a lot of profit by smuggling fuel across the border too. Buy fuel at N137...sell across the broder at N300 and above....that 's a tidy sum made.

5.Deregulation, while being hard on Nigerians (before you shout at ,me, I am fully aware that removing subsides is going to be harsh, and God knows I wish it was not so), would end this smuggling.

6. We could save over N500billion annually or more from removing subsidy...which could eventually lead to making improvements in trasport, education health, etc.

7.Investors in our oil and gas sector would be attracted, which means more refinereis, and crucially more jobs.

executive12:


And you believe that Nigeria is a democracy?

tspun:

Stop saying rubbish, are u sure u leave in Nigeria? What have they done with the once in their reach? Or u want to give them more money to steal.

executive12:


You are on point. I don't expect the clueless bigot Buhari to do that though.

Olalan:
As much as it has become necessary to act against the increasing smuggling in the country, I wonder what really is the need for us as a nation to have custom officers who can't do their jobs at the borders

PoliticalWitch:


The truth is,. no Nigerian poltican would do it.

Right now in oil producer Ecuador, President Lenin Moreno has removed subsides. As a result, there are riots on the street, the capital is basically in the hands of protesters, and people are angry.

Here in Nigeria, we have known since 1993 that oil subsidy has to go completely. But because no one wants to be removed from power, what we do is partial removal when the current subsidy becomes unsustainable. (which is what Buhari did in 2016).

To be honest, Buahri should be bold and remove subsidy. It 's good for our economy. But he would be removed because Nigerians don't do long term economics.

(PDP too is of the same idea...which is why Atiku was proposing an extension of the subsidy...by making sure we pay N90 per liter of fuel. With the poor returns from oil, eh).

ornicus:


The funny thing is Buhari did remove the subsidy, in 2015 when the price of oil dropped and our economy took a hit. The price of oil was low enough for the price of petrol to be bearable. As the price of oil rose, our economy recovered, and nnpc started wayo accounting to disguise the fact that petrol is subsidised. Today, only nnpc is bringing in pms. No one else.

You are right though. Pms pricing is a lightning rod. Sadly kachikwus attempts to reform nnpc into a profit making venture were sabotaged by nnpc itself. NNPC is probably the only company in the world where management and the unions are chummy.

PoliticalWitch:
Well, one solution is to remove fuel subsidies...

Here is the thing. Fuel is being smuggled to neighbouring countries...because

1.In Benin, fuel is N298. In Niger, it is N370, and in Cameroon it is at least N300 per liter.

2.Subsidy works this way. Importers buy fuel at N200 per liter, and sell it to depot at N137. Government pays the difference (N63) between the cost of importation and sale...meaning many importers cannot make a profit.

3.So importers import fuel, smuggle some across the border....and make a cool profit.

4.Also, a lot of fuel marketers make a lot of profit by smuggling fuel across the border too. Buy fuel at N137...sell across the broder at N300 and above....that 's a tidy sum made.

5.Deregulation, while being hard on Nigerians (before you shout at ,me, I am fully aware that removing subsides is going to be harsh, and God knows I wish it was not so), would end this smuggling.

6. We could save over N500billion annually or more from removing subsidy...which could eventually lead to making improvements in trasport, education health, etc.

7.Investors in our oil and gas sector would be attracted, which means more refinereis, and crucially more jobs.

90five:




You made valid points but did not talk about the crucial part of it.

Nigeria has 3 refineries, if those refineries were utilised who would talk about importers.


Revatalising the refineries was one reason subsidy was removed in the first place, but it is over 9 years now, nothing to show for it.


Kaduna refinery has not produced a single drop of fuel since last year, salaries are being paid while crude is being taken outside and brought back to Nigeria. Ain't that pathetic.


We all know that the govt knows what to do, but has chosen to either feign ignorance while looting the nation dry or pretend as if they are working while still looting the nation dry. Even borrow more to loot.



The most pathetic thing is that we dont know the implications of All the loans they borrow from China. China is not Santa Claus and has never been. Check out Dept Trap Diplomacy to understand what I mean.

90five:




You made valid points but did not talk about the crucial part of it.

Nigeria has 3 refineries, if those refineries were utilised who would talk about importers.


Revatalising the refineries was one reason subsidy was removed in the first place, but it is over 9 years now, nothing to show for it.


Kaduna refinery has not produced a single drop of fuel since last year, salaries are being paid while crude is being taken outside and brought back to Nigeria. Ain't that pathetic.


We all know that the govt knows what to do, but has chosen to either feign ignorance while looting the nation dry or pretend as if they are working while still looting the nation dry. Even borrow more to loot.



The most pathetic thing is that we dont know the implications of All the loans they borrow from China. China is not Santa Claus and has never been. Check out Dept Trap Diplomacy to understand what I mean.

naijapower:
Good job by the Buhari lead administration

ornicus:


The refineries are a black hole. I am not sure they can ever be truly revitalised. They are running 70s technology. I have heard stories of expats coming and being amazed that some equipment is still somehow operational. (it is not to be celebrated - a 1978 corolla being used today is not a good thing)

Obj is at fault here. The refineries were sold in his tenure but he reversed the sale. Those refineries may never run optimally.

PoliticalWitch:
Well, one solution is to remove fuel subsidies...

Here is the thing. Fuel is being smuggled to neighbouring countries...because

1.In Benin, fuel is N298. In Niger, it is N370, and in Cameroon it is at least N300 per liter.

2.Subsidy works this way. Importers buy fuel at N200 per liter, and sell it to depot at N137. Government pays the difference (N63) between the cost of importation and sale...meaning many importers cannot make a profit.

3.So importers import fuel, smuggle some across the border....and make a cool profit.

4.Also, a lot of fuel marketers make a lot of profit by smuggling fuel across the border too. Buy fuel at N137...sell across the broder at N300 and above....that 's a tidy sum made.

5.Deregulation, while being hard on Nigerians (before you shout at ,me, I am fully aware that removing subsides is going to be harsh, and God knows I wish it was not so), would end this smuggling.

6. We could save over N500billion annually or more from removing subsidy...which could eventually lead to making improvements in trasport, education health, etc.

7.Investors in our oil and gas sector would be attracted, which means more refinereis, and crucially more jobs.

loswhite:
The most important thing to a place ban on is fuel importation not rice. How can a country like Nigeria be ok with importation of fuel and yet scream when it comes to rice importation? In news you hear of billions of foreign exchange on rice, please hay you heard the one for daily fuel importation? Can Nigeria rice production presently meet the demand of over 200 million ppl? In as much as we need to promote local production there must be a systematic way of making it attractive to the citizens...

90five:



Okay, but are you trying to say that Nigeria doesn't have the capacity to build two or more refineries and maintain them too? Cause Nigerians and maintenance are like the North pole and the South Pole, they can never meet.


We know our problems, we know how to solve them, but we are driven by inertia.

PoliticalWitch:


1. The last refinery in Kaduna was built in 1988. That's 31 years ago. Since then, the number of cars and generators, and other vehicles has gone up . Even at full capacity, we would still have to import fuel massively.

2.And because NNPC isn't earningm much of a profit from fuel due to subsidy, there isn't much money to fix refinereis.

3.Subsidy has not gone. What Buhari did in 2016 was raise prices from N87 TO N145 when cost of importing fuel was N132. Now, the cost of imprting fuel is N200 per liter. See the issue.NNPC is now spending a lot of money mantaining the subsidy...which also privides avenues for corruption.

4.Because of serious price controls, ie subsidy...that's why no one is going to come and build refineries (dangote's refienry is funded heavily by government secured loans. Dangote did contribute $3billion of his cash though). Manking one liter of fuel in Nigeria costs N165 . Anyone building a refneirey would he forced to sell below N140, AND subsidy payments would be N25. No profit made.

5.We take loans because the oil price is low. We need oil at $139 per barrel to stop borrowing. Oil is at $58 right now. Was at $75 in 2015, and $30 in 2016. Nigeria has no choice.

PoliticalWitch:
Well, one solution is to remove fuel subsidies...

Here is the thing. Fuel is being smuggled to neighbouring countries...because

1.In Benin, fuel is N298. In Niger, it is N370, and in Cameroon it is at least N300 per liter.

2.Subsidy works this way. Importers buy fuel at N200 per liter, and sell it to depot at N137. Government pays the difference (N63) between the cost of importation and sale...meaning many importers cannot make a profit.

3.So importers import fuel, smuggle some across the border....and make a cool profit.

4.Also, a lot of fuel marketers make a lot of profit by smuggling fuel across the border too. Buy fuel at N137...sell across the broder at N300 and above....that 's a tidy sum made.

5.Deregulation, while being hard on Nigerians (before you shout at ,me, I am fully aware that removing subsides is going to be harsh, and God knows I wish it was not so), would end this smuggling.

6. We could save over N500billion annually or more from removing subsidy...which could eventually lead to making improvements in trasport, education health, etc.

7.Investors in our oil and gas sector would be attracted, which means more refinereis, and crucially more jobs.

PoliticalWitch:
Well, one solution is to remove fuel subsidies...

Here is the thing. Fuel is being smuggled to neighbouring countries...because

1.In Benin, fuel is N298. In Niger, it is N370, and in Cameroon it is at least N300 per liter.

2.Subsidy works this way. Importers buy fuel at N200 per liter, and sell it to depot at N137. Government pays the difference (N63) between the cost of importation and sale...meaning many importers cannot make a profit.

3.So importers import fuel, smuggle some across the border....and make a cool profit.

4.Also, a lot of fuel marketers make a lot of profit by smuggling fuel across the border too. Buy fuel at N137...sell across the broder at N300 and above....that 's a tidy sum made.

5.Deregulation, while being hard on Nigerians (before you shout at ,me, I am fully aware that removing subsides is going to be harsh, and God knows I wish it was not so), would end this smuggling.

6. We could save over N500billion annually or more from removing subsidy...which could eventually lead to making improvements in trasport, education health, etc.

7.Investors in our oil and gas sector would be attracted, which means more refinereis, and crucially more jobs.

ornicus:



That is why the best option was privatization. Nepa, Nitel, NNPC were/are run like civil service.

Kaduna refinery does not work. Any private business would have shut it down. Kachikwu tried to commercialize nnpc by initiating partnerships and JVs but ultimately he was frustrated.

Our government has tried and failed at running viable businesses. Most of NNPC is not a viable entity. It is crude carrying all of them

90five:



Okay, all these don't make any sense to me. For how long are we going to continue funding the importation of fuel, will it be when Nigerians pay more than half of their monthly income, for those that even have the work. It was under their watch that all these excalated. There is no logic there at all, cause all the funds meant for all these have always been diverted. With all the monies pumped into the fight against insecurity, a recent report shows that NA still use ammunition from Shehu Shagari's era. If all these are being put in place, if everyone obeyed and respected the rule of law, we would be better off.


That's their reason for borrowing, so they say, but last year Bubari claimed to have shared the returned Abacha loot to the poor but went to China the next month to borrow the same amount, what logic is this reasoning.



When anyone is making a plan, they try to eliminate every problem possible, but we blacks are very ignorant.


Look at how they handled the issue with those British duo, now we are in court trying not to pay 9.6b dollar. That's pathetic.

PoliticalWitch:


At the moment we cannot ban fuel imports for these reasons

1.Our refinereis, the last one which was built some 31 years ago, cannot meet local demand even at full capacity.

2.Because of subsidy, anyone building new refienreis would be selling fuel from these refinereis at a loss (Kerosene, gas et al have been deregulated).

Basically, under subsidy, a domestic refiner would refine fuel at N165 or more per liter...and then sell the same fuel at N137 or less. Losing as much as N30 per liter sold. (That's why of the 60 licences given for refinereis in this country, less than 10 are building something//have something on ground)

2extremes:
Please, i need someone to borrow me 10k to take to the hospital. My inner right ear aches badly. The pain is really unbearable. I promise to return it by month end. 0808.1. 473.5.39

loswhite:
has government stopped paying the subsidy?

The ppl that imported same fuel and sold at the stipulated government price did they make losses? So if as you claim domestic refiner would loose as as much as 30 naira for refining in Nigeria why is it not applicable to those importing? Or are you saying they are loosing?

The average Nigerian business man wants immediate profit so those license were giving with an option to lift which means an option to import fuel. If u were giving a license to build refinery and option to import fuel and a guarantee of no loss since the government will be paying the difference (subsidy) what would you do?

Understanding that the reason for high consumption of fuel is simply because of lack of electricity... The country you mentioned that do not subsidize fuel consumption consume far less petroleum products... Zero improvement on the power sector after 4 years and no signs of improvement so it also means the fuel consumption will also be high and ultimately high Forex spent on the importation of fuel

Please can you compare the amount of Forex spent on fuel importation to that of rice? Why is that we hear of billions of Forex spent on rice and we don't hear of that on fuel importation? Fuel importation is sabotage to Nigerian economy but yet you see successive governments pretend as if it is not

PoliticalWitch:


You don't understand because you think I am excusing the government

Read my post again.

Also read this article hereBREAKEVEN NIGERIA

Nigeria needs an oil price of $139 a barrel to balance its budget this
year, Fitch Ratings Ltd said on Thursday.

Fitch, an international rating agency, in an April 5 report, said
Nigeria has the worst situation among 14 major oil exporting nations in the
Middle East, Africa and emerging Europe.

Bloomberg reports that the agency said Kuwait is in the best position
of major oil exporting nations to have a balanced government budget
this year with oil forecast to average $52.50 a barrel.

The report noted that even after cuts in government subsidies and currency devaluations, 11 of them won’t have balanced government budgets this year, including Saudi Arabia.

“Fiscal reforms and exchange rate adjustments are generally supporting
improved fiscal positions compared to 2015, but have not prevented erosion of sovereign creditworthiness,” the rating agency said.

It explained further that only Kuwait, Qatar and the Republic of Congo have estimated break-evens that are below Fitch’s oil price forecast
for this year.

Kuwait at $45 a barrel traditionally has a low break-even because of its high per-capita hydrocarbon production and more recently its “large estimated investment income” from its sovereign wealth fund, Fitch added.

Earlier, Brent crude, a global benchmark, averaged about $55 a barrel for 2017.

The rating agency said it “substantially” raised the fiscal break-even prices for Nigeria, Angola and Gabon from 2015 levels because of
rising government spending.
‎
A breakdown of the Fitch forecast 2017 break-even oil prices per
barrel shows that Nigeria was pegged at $139, Bahrain at $84, Angola
at $82, and Oman at $75.

Others are Saudi Arabia at $74, Russia at $72, Kazakhstan at $71, and
Gabon at $66; as well as Azerbaijan at $66, Iraq at $61, Abu Dhabi,
United Arab Emirates, at $60, Republic of Congo at $52, Qatar at $51 and Kuwait at $45.

Note that oil has been below $120 since 2009....which is why we are borrowing. Even now, for every barrel of oil we sell, we are losing $80 because the oil price is not at the breakeven.

Even having the loot returned cannot meet all our needs, and the corruption is making things worse.

I