The problem with the world is not having enough,the problem is that the rich wants more and more at expense of the masses,just maintain the status quo.

Foreign multi-nationals makes more than two third profit on barrel of crude oil than the undeveloped country like nigeria that owns it natural

Heh. He makes sense. . . it is pretty intuitive stuff. There is no way that spending $4.2 billion/year on fuel subsidies is the most efficient way to spent that money. But I think that he is talking a bit too ambitiously. . . no way it could be phased out in one year alone.

I would suggest phasing out the subsidy over time, say over a 8 year period or so. And this has to be coupled with increased electricity in Nigeria as well. Otherwise, the shock will be too much.


Regarding this:

zstranger:

Nigeria, Africa’s biggest oil producer, imports more than 80 percent of its domestic fuel due to a lack of refining capacity, according to the country’s Petroleum Ministry. The government, through the Nigerian National Petroleum Corp., guarantees regulated fuel prices by paying importers the difference with market prices.

Jesu Kristi! I can think of at least a few ways to game that system out of millions of dollars. And no doubt very bright fraudsters and corrupt politicians are already doing so, lol.

Nice article here on fuel subsidies for developing countries btw: http://www.economist.com/blogs/newsbook/2010/11/fossil-fuel_subsidies

An attractive cut
One of the striking aspects of the IEA’s $312 billion figure is that more than a fifth of it comes from a single country: Iran. To get fuel prices as low as ten American cents a liter for gasoline (two cents for diesel) cost the government some $66 billion in 2009, according to the IEA: that’s $895 per person, or 20% of GDP. Saudi Arabia’s subsidy is actually higher per capita, but lower overall and under 10% of GDP; Uzbekistan’s is a remarkable 32% of GDP, but only $11 billion in total.

Pretty wild, no?

Contrast with some other countries:

Elsewhere there has already been some progress. The fall back of oil prices from their 2008 peak gave nations the possibility of reducing subsidies, which some, including China, took advantage of. Indeed while China’s subsidy is still quite large in absolute terms ($18 billion) consumers are paying 96% of market prices. Russian subsidies are falling; Indonesia hopes to get rid of its altogether by 2014.

ekt_bear:

Hrm, see this graphic: http://tonto.eia.doe.gov/energyexplained/images/charts/breakdown_regular_gasoline-large.gif

(from here: http://tonto.eia.doe.gov/energyexplained/index.cfm?page=gasoline_factors_affecting_prices)

And this article too:
http://www.americanthinker.com/2011/05/about_those_oil_subsidies.html

So I think we've pretty thoroughly debunked the notion that petrol is subsidized in the US, yes? State and federal taxes on the consumer seem to vastly outweigh whatever subsidies the oil companies get.
Bolded is 100% incorrect.

I don't really get the point about state and federal taxes. The consumer is only concerned about the price at the pumps and not the level of taxation. If govt reduces taxation by 30% but the price remains the same because the supplier increases its own price, then the tax reduction would have made no sense. The key factor is the price.

Secondly, the price of crude is global. US Nymex is currently trading at $98 while brent crude is trading at $113. If you compare the price at the pumps in the US with the price in other developed european countries, then you will realise that there is a subsidy. Tax breaks, oil subsidies, etc, its all the same. The oil companies get a cash reduction in money going to the govt.

Katsumoto:

I don't really get the point about state and federal taxes. The consumer is only concerned about the price at the pumps and not the level of taxation. If govt reduces taxation by 30% but the price remains the same because the supplier increases its own price, then the tax reduction would have made no sense. The key factor is the price.

Right. But the tax is a transfer from the consumer and oil companies to the government. The subsidy on the oil companies is a transfer in the other direction (government to oil cos). In aggregate, more money flows to the government than to the oil companies.

Again, see the graphic I linked to and compare to that calculation I made for the subsidy per barrel of $0.68.

Secondly, the price of crude is global. US Nymex is currently trading at $98 while brent crude is trading at $113.

Are you saying this difference in price between the two sources of oil represents a subsidy? Or not a difference in say quality of oil, etc, etc? If you are claiming that the difference in price represents a subsidy, justify this statement.

If you compare the price at the pumps in the US with the price in other developed european countries, then you will realise that there is a subsidy.

Price at the pumps in "developed european countries" is because they heavily tax on top of whatever the price would be w/o taxes. That there is a difference in price between the US and developed European countries does not mean that the US is subsidizing oil at all. As I showed, in aggregate oil is not being subsidized.

Tax breaks, oil subsidies, etc, its all the same. The oil companies get a cash reduction in money going to the govt.

Addressed above.

One other quote from that same article on The Economist

Better to eschew comparisons and concentrate on the straightforward case against the fossil-fuel subsidies, which is overwhelming. They encourage inefficient energy use, and they represent a lot of foregone export revenue in countries that produce oil and gas and at the same time subsidise their home markets (a common arrangement; Iran, Saudi Arabia and Russia are the three countries most invested in subsidising). Though they are often justified in terms of helping the poor, the lion’s share of the benefits—85% to 90%—typically accrue to those on middle incomes and the wealthy; the poor are typically not big energy users, and rarely drive. Money that could be invested in services the poor do need and use is spent on subsidising energy for the rest. And as Mr Koplow and his colleague Steve Kretzmann point out, subsidised fossil fuels for the rural poor can tip the balance away from renewable energy sources, such as solar, in the off-grid applications to which they are particularly well suited, and where they would otherwise be most competitive.

This also makes intuitive sense. The wealthier you are in Nigeria, the more you likely benefit from the fuel subsidy. If I spend $100,000/year on gasoline, I'm basically getting a $100,000 subsidy from the government (buying something for N65 which is worth N130.) But how much does your average/median Nigerian spend on gasoline per year. . . $100 bucks?

So the existing fuel subsidy benefits the rich far more than the poor.

Light, sweet crude for June delivery recently rose as high as $100.49 a barrel before settling 76 cents, or 0.8%, higher at $98.97 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange ended 41 cents higher at $112.98 a barrel.

http://online.wsj.com/article/BT-CO-20110512-716574.html

Googling around a bit, "Light, sweet crude" appears to be a different product from Brent crude. Doesn't look like the price differential represents a subsidy. Just different goods being sold.

@ScotRogers of IMF

He based his argument on the fact that Nigerians are presently paying N65 for a litre of petrol whereas the same product goes for about N130 at the world market.
According to him, if all refineries are made to work as people have been canvassing for, the onus will still be on the owners of these refineries to decide whether to sell at the local price or take it outside the country to make more money.

I dont think Scot Rogers and his IMF goons are MAD, l think they take us (Yes, all Africans!) for FOOLS!

About Time we shove their silly and deceptive advise, up their "Peach-colored A*rse"!

If its not IMF, Its will be World Bank, or UN or ICC or NATO or Coalition or "International" Community or E.U! Wetin Sef?
abegii, leave us alone naah!

ekt_bear:

http://online.wsj.com/article/BT-CO-20110512-716574.html

Googling around a bit, "Light, sweet crude" appears to be a different product from Brent crude. Doesn't look like the price differential represents a subsidy. Just different goods being sold.

Yeah I know; Light crude comes mainly from countries such as Nigeria and Libya. I only mentioned because I wanted to illustrate that there is a global market and that most countries buy/sell at the same price and that different prices at the pumps is a result of different fiscal policies.

ekt_bear:

One other quote from that same article on The Economist
This also makes intuitive sense. The wealthier you are in Nigeria, the more you likely benefit from the fuel subsidy. If I spend $100,000/year on gasoline, I'm basically getting a $100,000 subsidy from the government (buying something for N65 which is worth N130.) But how much does your average/median Nigerian spend on gasoline per year. . . $100 bucks?

So the existing fuel subsidy benefits the rich far more than the poor.

No it does not make sense because the poor are dependent on goods and services that use gas. Taking away subsidy means that transportation companies will charge the poor when they take buses. It also means that the price of food will go up astronomically. The poor spend most of their income on food and transportation. An increase in gas or energy prices affects everyone.

The subsidy will affect the rich in a way that the rich man decides to buy a 3 liter engine car instead of a 4 liter. It affects a poor man in that he has to eat less because he MUST go to work and the only room he has to manoeuvre is his eating habits. You have to be careful when reading papers written by people either to the far right or far left. They don't engage their brains at times when making an argument.

So IMF has not punished us enough by conniving with Babangida to devaluate the Naira and ruin Nigerian economy??

Wake up everybody (especially those kolo-mental running our affairs) and smell coffee!
Very telling that they are saying this nonesense to indoctrinate "our financial economists" with their ruinous ideas to push their agenda for them.

Then they can just relax in the West and make it appear as though it is our local "economists" who are cavassing for end of subsidy.

Now they want to also end just about the only benefit (crumbs from the table of Shell, BP, Total, Chevreon etc) the poor masses get from Niger Delta oil.

Lai lai. They have already failed.
We don't have any appetite to be colonised again in any shape or form, economic or otherwise. QED.

Katsumoto:

Yeah I know; Light crude comes mainly from countries such as Nigeria and Libya. I only mentioned because I wanted to illustrate that there is a global market and that most countries buy/sell at the same price and that different prices at the pumps is a result of different fiscal policies.

OK. But hopefully you see that oil is NOT subsidized in the US.

No it does not make sense because the poor are dependent on goods and services that use gas. Taking away subsidy means that transportation companies will charge the poor when they take buses. It also means that the price of food will go up astronomically. The poor spend most of their income on food and transportation. An increase in gas or energy prices affects everyone.

The subsidy will affect the rich in a way that the rich man decides to buy a 3 liter engine car instead of a 4 liter. It affects a poor man in that he has to eat less because he MUST go to work and the only room he has to manoeuvre is his eating habits. You have to be careful when reading papers written by people either to the far right or far left. They don't engage their brains at times when making an argument.

If the subsidy is removed and just vanished with nothing replacing it, then yes, there would be hardship on the common man.

However. . . there are a # of different ways to look at the actual impact.

Let's be a bit concrete. Assuming that the $350 million/month quoted is representative of a year, Nigeria spends $4.2 billion/year on petrol subsidies. Population of 150 million. If we say that 70%+ of this benefit goes to above-average income earners (probably not unreasonable a guess), your typical poor guy sees $16.80/year in benefit from this subsidy ($28 per person per year averaged over everybody.)

Now, are you very sure that this $4.2 billion cannot be spent in a way that delivers more value to your typical below-average income guy (if that is indeed your goal)? Schools, hospitals, better transportation (e.g., rather than taking 8-10 hours to drive the 330 miles Lagos to Abuja, I'm driving 4-5 hours on a good highway)?

Regarding "far right", I don't think most people consider The Economist to be a far right newspaper. Fiscally conservative, yes. Far right, no.

ekt_bear:



If the subsidy is removed and just vanished with nothing replacing it, then yes, there would be hardship on the common man.

However. . . there are a # of different ways to look at the actual impact.

Let's be a bit concrete. Assuming that the $350 million/month quoted is representative of a year, Nigeria spends $4.2 billion/year on petrol subsidies. Population of 150 million. If we say that 70%+ of this benefit goes to above-average income earners (probably not unreasonable a guess), your typical poor guy sees $16.80/year in benefit from this subsidy ($28 per person per year averaged over everybody.)

Now, are you very sure that this $4.2 billion cannot be spent in a way that delivers more value to your typical below-average income guy (if that is indeed your goal)? Schools, hospitals, better transportation (e.g., rather than taking 8-10 hours to drive the 330 miles Lagos to Abuja, I'm driving 4-5 hours on a good highway)?

Again, you are playing with numbers that can not be substantiated. Who derives the most benefit from the subsidy can only ascertained by studying work and life patterns. Some rich people live and work on the Island and may not have too much of a social life. A poor man (a driver for instance) who lives in iju and works 6 days a week in Ikoyi spends significantly more time on the road than his boss and spends most of his income on transportation, is more dependent on the subsidy than his boss. I dont like playing with numbers that are nothing more than a guess because they don't really tell us anything.

Secondly, you continue to ignore the fact that corruption is unlikely to permit the poor man, who is going to be affected by the subsidy removal the most, from enjoying the services that may be instituted with the funds from the subsidy removal. There have been several oil windfalls in the last 25 years; I can tell you with all confidence that most, if not all, of it has not been declared. I remember a few years ago when the Nigerian budget was based on $60 per barel and oil shot to $100; The revenue derived DID not increase. I believe it was during the Isreali/Lebanon war. Why is it so difficult for you to accept that Nigerian administrators will simply embezzle the funds. In any case, I will stop making this point to you.

ekt_bear:


Regarding "far right", I don't think most people consider The Economist to be a far right newspaper. Fiscally conservative, yes. Far right, no.

No far right journalist would have written that article calling for subsidy to be removed so as to punish the rich. Most likely a far left journalist. I tend to judge articles based on the content of the said article rather than judge the publication itself. Not everyone journalist at the Economist is a centrist, left winger or right winger.

I was initially confused by the original post but the truth is that local refineries will help.

Here's how I see it.  It costs 130 naira per liter to produce and ship petrol to Nigeria.  The government buys at that price and sells at a lower price, say 65 naira.  If we build a local refinery, it will probably cost less than 130 naira per liter due to the reduction in the number of middlemen and transportation.  Let's say it costs 100 naira per liter.  So instead of buying at 130 naira per liter to sell at 65 naira per liter, the government can buy at from the local refinery at just 100 naira per liter.  So the same amount of expenditure by the government will be able to subsidize a larger volume of petrol. 

So the local refineries will probably help the fuel situation by reducing the cost of petrol subsidization.

Katsumoto:

Again, you are playing with numbers that can not be substantiated. Who derives the most benefit from the subsidy can only ascertained by studying work and life patterns. Some rich people live and work on the Island and may not have too much of a social life. A poor man (a driver for instance) who lives in iju and works 6 days a week in Ikoyi spends significantly more time on the road than his boss and spends most of his income on transportation, is more dependent on the subsidy than his boss. I dont like playing with numbers that are nothing more than a guess because they don't really tell us anything.

In the absence of other information (a plot of petrol consumption versus income, for example), there is nothing to do but make educated guesses.

You can pick out some isolated examples of rich folk who somehow spend no money on petrol, but this is going to be an anomaly, not representative.

Anyway, I think even w/o data to back this up immediately, most people will agree that wealthier folk consume more liters of petrol  (either directly or indirectly) per capita than poor folk.

Throw on top of that the claim in that Economist article about most of the benefit going to the wealthy, as well as various other studies one can pull up quickly. . . and it isn't hard to figure out who benefits more in Nigeria from fuel subsidies.

Secondly, you continue to ignore the fact that corruption is unlikely to permit the poor man, who is going to be affected by the subsidy removal the most, from enjoying the services that may be instituted with the funds from the subsidy removal. There have been several oil windfalls in the last 25 years; I can tell you with all confidence that most, if not all, of it has not been declared. I remember a few years ago when the Nigerian budget was based on $60 per barel and oil shot to $100; The revenue derived DID not increase. I believe it was during the Isreali/Lebanon war. Why is it so difficult for you to accept that Nigerian administrators will simply embezzle the funds. In any case, I will stop making this point to you.

If they'll embezzle it regardless, at any level, then there is no reason to comment on Nigerian policy period. After all, everything will be embezzled. . . so what is the point? Why even bother talking about anything Nigeria does policy-wise, if all choices only lead to corruption?

No far right journalist would have written that article calling for subsidy to be removed so as to punish the rich. Most likely a far left journalist. I tend to judge articles based on the content of the said article rather than judge the publication itself. Not everyone journalist at the Economist is a centrist, left winger or right winger.

Right. It doesn't make sense to focus on the inclination of the writer, but instead judge the merit of the arguments in the article itself.

Seun:

It costs 130 naira per liter to produce and ship petrol to Nigeria.  The government buys at that price and sells at a lower price, say 65 naira.  If we build a local refinery, it will probably cost less than 130 naira per liter due to the reduction in the number of middlemen and transportation.  Let's say it costs 100 naira per liter.  So instead of buying at 130 naira per liter to sell at 65 naira per liter, the government can buy at from the local refinery at just 100 naira per liter.  So the same amount of expenditure by the government will be able to subsidize a larger volume of petrol. 

I don't believe the problem is that simple. Our local refineries have been working at about 30% or less capacity for a long while now. What is cost of production? Are our local refineries even able to produce the fuel at a price lower than the Naira 130 we currently purchase? Essentially, is it worth building more refineries at this point, or in th near future? Especially when you consider we still struggle to reach 40% capacity with the one we have.

Kobojunkie:

I don't believe the problem is that simple. Our local refineries have been working at about 30% or less capacity for a long while now. What is cost of production? Are our local refineries even able to produce the fuel at a price lower than the Naira 130 we currently purchase? Essentially, is it worth building more refineries at this point, or in th near future? Especially when you consider we still struggle to reach 40% capacity with the one we have.

Good observation; the answer is in the details we don't know.  I think my main point is that local production worth it as long as the local refineries can produce petrol at cheaper than the prevailing price at which petrol is being imported, even if petrol is still being subsidized by the government.  If the government is currently happy to import at 130, I don't see why they would not rather buy locally at 120 or 110 if that was possible.

Kobojunkie:

I don't believe the problem is that simple. Our local refineries have been working at about 30% or less capacity for a long while now. What is cost of production? Are our local refineries even able to produce the fuel at a price lower than the Naira 130 we currently purchase? Essentially, is it worth building more refineries at this point, or in th near future? Especially when you consider we still struggle to reach 40% capacity with the one we have.

Hopefully private owned refineries will be better managed and the efficiency will be higher than those public owned refineries.

The benefits are much more than producing petrol, think about other value added to local production of these commodities such as job creations, GDP growth etc.

OAM4J:
Hopefully private owned refineries will be better managed and the efficiency will be higher than those public owned refineries.

But will they be more efficient than the foreign privately-owned refineries we're currently importing from?

Seun:

But will they be more efficient than the foreign privately-owned refineries we're currently importing from?

May be not, and I dont expect it to be, but considering other overheads that go into importation of these commodities, it should be cheaper for us producing them locally at the long run.

OAM4J:

Hopefully private owned refineries will be better managed and the efficiency will be higher than those public owned refineries.

The benefits are much more than producing petrol, think about other value added to local production of these commodities such as job creations, GDP growth etc.

Private owned entities like the ones who currently run our telecoms industries and charge people an arm and a leg for service?? . I honestly will say we cannot escape Nigeria's issues by simply privatizing everything. We still need to ensure that the same Government we are trying to run away from, properly ensures the industry is regulated.

I get the sense that the reason we continue to import is majorly because we are unable to refine locally at a lower price. Yes, Government subsidizes cost for the average man, but my fear is, if we decide to invest billions of dollars(private and/or public funds) into building local refineries, we might end up creating for ourselves a situation worse than we current have - Government may need to increase subsidy amounts as a result. This is Nigeria ! We have refineries and they have been struggling to maintain those for like forever.

Kobojunkie:

Private owned entities like the ones who currently run our telecoms industries and charge people an arm and a leg for service?? . I honestly will say we cannot escape Nigeria's issues by simply privatizing everything. We still need to ensure that the same Government we are trying to run away from, properly ensures the industry is regulated.

You are right, that is why am an advocate of Public-Private-Partnership(PPP) Organisations. While not also discouraging wholly private owned refineries under people oriented regulations.

ekt_bear:



Throw on top of that the claim in that Economist article about most of the benefit going to the wealthy, as well as various other studies one can pull up quickly. . . and it isn't hard to figure out who benefits more in Nigeria from fuel subsidies.

First of all, I am surprised that you are unable to see Katz's point clearly.

Secondly, The Economist article you posted was talking about the environmental impact of subsidies removal WRT to how much is consumed on a per leisure/unnecsaary consumption basis, not WRT to how much necessary/unavoidable amount consumed. Their point is that subsidy increases usage, which in turn adds to atmospheric carbondioxide. There was no analysis per se on the impact of subsidy-removal on the survivability of the poor man and its impact on job creation, and stimulation of the economy.

Their point if I am not mistaken is: remove subsidies and people would be forced to use less gas which will in-turn reduce pollution.

Anyway, I think even w/o data to back this up immediately, most people will agree that wealthier folk consume more liters of petrol  (either directly or indirectly) per capita [/b]than poor folk.

Well, like Katz said, this is nothing more than conjecture.

But even if it were true, on a class/social economic status basis, the poor, including lower middle-class,  definitely consume more liters of petrol than the rich, No? And, therefore, they, not the rich, benefit most from fuel subsidies.

Though they are often justified in terms of helping the poor, t[b]he lion’s share of the benefits—85% to 90%—typically accrue to those on middle incomes and the wealthy
http://www.economist.com/blogs/newsbook/2010/11/fossil-fuel_subsidies

First of all, the notion that 85%-90% of the benefits go to the wealthy is not true, at least not in Nigeria's.

Even if that was true, looking at the big picture, it is all good;  I'd rather have an Adenuga who has more money to hire personal drivers, pilots, and tons of college grads than an Adenuga who spends more on petrol,  but hire less.

OAM4J:

You are right, that is why am an advocate of Public-Private-Partnership(PPP) Organisations. While not also discouraging wholly private owned refineries under people oriented regulations.

I am 100% for private entities as well. I just believe that we need Government to take on a serious regulatory role in order to ensure success, else we get nothing better than what we currently have happening in the telecommunications sector -- the rich keep getting richer while the poor keep getting ripped off, and Government will probably continue to subsidize most everything.

zstranger:

First of all, I am surprised that you are unable to see Katz's point clearly.

I see his point, but disagree with it. His point is, "too hard to say who derives the benefit." I'm saying, "Yes, we don't have #s, but we can make educated guesses." Correct me if I'm wrong regarding his point, though.

Secondly, The Economist article you posted was talking about the environmental impact of subsidies removal WRT to how much is consumed on a per leisure/unnecsaary consumption basis, not WRT to how much necessary/unavoidable amount consumed. Their point is that subsidy increases usage, which in turn adds to atmospheric carbondioxide. There was no analysis per se on the impact of subsidy-removal on the survivability of the poor man and its impact on job creation, and stimulation of the economy.

Their point if I am not mistaken is: remove subsidies and people would be forced to use less gas which will in-turn reduce pollution.

Right, the article is primarily about environmental stuff. But what I quoted discusses how some of the reasoning used to justify these subsidies ("this petrol subsidy helps poor market women, etc, etc" don't hold. You can then use that to find other studies/surveys that come to the same conclusion. Same phenomenon (of oil subsidies primarily benefiting the rich rather than the poor) seems to show up in other places (China, Indonesia, India).

Well, like Katz said, this is nothing more than conjecture.

It is what it is. . . on some level all we are doing here is conjecturing. But I don't have access to the data for Nigeria, so all I can do is to make educated guesses. . . using my intuition about how things work and the additional information provided by studies in other countries. Granted, it'd be better to have hard data for Nigeria. But I don't have that. . . none of us do, really.

But even if it were true, on a class/social economic status basis, the poor, including lower middle-class,  definitely consume more liters of petrol than the rich, No?

Cumulatively or per capita? Cumulatively might be true, but is sort of irrelevant. The question is, on a per capita basis, does your poor man consume more or less in petrol per year than a wealthy man? (I hope you see why cumulative is irrelevant btw. If we have $1000 to share, 100 poor people and 1 rich man, give the poor people $600 to share, and the rich man $400, then that more money has gone to the poor (100 poor people getting $600) than the rich (one rich man getting $400) doesn't capture how this is probably a bad policy for helping the poor.)

First of all, the notion that 85%-90% of the benefits go to the wealthy is not true, at least not in Nigeria's.

See above.

Even if that was true, looking at the big picture, it is all good;  I'd rather have an Adenuga who has more money to hire personal drivers, pilots, and tons of college grads than an Adenuga who spends more on petrol,  but hire less.

Nope, I strongly disagree. If it true that 85% of the benefit goes to the wealthy, then you seriously must question the policy. It isn't as if the secondary benefits you bring up ("hire personal drivers, pilots", etc) are unique to this particular way of spending $4.2 billion. If I spend $4.2 billion on some combination of education, healthcare, transportation, I'll think I'll generate secondary benefits just as high as that of a petrol subsidy. This quote of yours from Aganga supports this, btw.

Having fully functional and efficient refineries would solve a lot issues in the downstream sector and the whole country in general.
Refineries do not refine only gasoline; asphalt base, kerosene, diesel fuel, LPG et al are also petroleum products that are to be refined. I do acknowledge their insistence that power is pivotal(everybody does), but the industrial benefits of having fully functional refineries are obvious and enormous.

1. I'm not sure that the subsidies are really working. Subsidized electricity in Nigeria has essentially killed most of the manufacturing in Nigeria, due to scarcity. So perversely, the electricity subsidy has done more harm than good in Nigeria since the 1980s. I don't know enough about the oil business to say that the same is true in Nigeria, but it very well might be.
2. Subsidies breed corruption.
3. I'm not advocating removing these subsidies instantaneously. You can do it slowly over a 10 year period or something.
4. Which wastages would you tackle first? Anyway, I'm not against keeping the subsidy. . . . just don't complain about fuel shortages, corruption in NNPC, oil profiteers, and lack of functional refineries. After all, it isn't as if these bad things happen in a bubble

Get your facts straight! Electricity is supplied by ESKOM in S/Africa, yet, it generates about 40,000 MGW while Nigeria generates about 3800 MGW. Electricity is generated by French government-one of the biggest financiers of IMF/World Bank.
In the USA, farmers are subsidized to 50 cents on a dollar.  Scottie Pippen, who played professional basketball for 17 years gets subsidies, Paul Allen, Microsoft Billionaire founder gets farm subsidies.  The big oil companies get big subsidies about $21 billion in 10 years. Wall Street got over $900 billion in bailout funds. Amtrak in the US is subsidized by the government.
Why are prices of petroleum cheaper in Libya that borders Egypt , Chad, Niger and Sudan where prices are higher? Why are prices cheaper in UAE, Saudi Arabia and Kuwait if not because of subsidies. Why does the state of Alaska give oil money to  every Alaskan from their oil wealth fund? Is that not subsidy?
Finally, there is a quota of pbd that has been assigned to NNPC for domestic consumption, so if it had been functioning at its near production capacity, it would be refining the assigned quota. Using NYMEX oil price as a benchmark is really flawed because the cost of Caterpillar Machines -made in the USA is not the same with similar machines shipped to Nigeria for oil exploration. It costs about 50-100% more in Nigeria, so why should Nigerians pay the same price with Americans when it comes oil that is produced in our back yard?

Besides, Nigeria's crude is light, hence refining it doesn't and wouldn't cost much.

GUYS, SIMPLY PUT, THE IMF GUY IS ANGRY THAT WE ARE PAYING LESS 4 ACOMMODITY THEY ARE PAYING DOUBLE FOR. HE FORGETS THAT WE DONT HAVE REGULAR SUPPLY OF ELECTRICITY AS THEY HAVE IN THEIR OWN NATION. BESIDES THAT ITS HI TIME OUR GOVT GIVE THIS MONEY TO STAE GOVT TO INVEST IN LOCAL REFINERY INSTEAS OF INSISTING ON IMPORTING WHAT WE HAVE LOCALLY AS A RAW MATERIAL AND PAYING SO CALLED SUBSISIES. IT IS OBVIOUS OUR GEJ LED GOVT IS VERY INSINCERE.

does fuel really cost 65 naira a litre in 9ja?

Direct and indirect subsidy exist in the US.

http://oneworldgroup.org/imagelib/posts/20100804/us_fuel_subsidies.jpg   source: http://oneworldgroup.org/2010/08/04/fuel-subsidies-by-us-government-exposed

http://www.progress.org/2003/energy22.htm

He based his argument on the fact that Nigerians are presently paying N65 for a litre of petrol whereas the same product goes for about N130 at the world market

what about standard of living in other parts of the world like us?

----^

Plus earning power of Nigerians.

Nigerians are still fighting to get N18,000/month minimum wage, that is approximately $120 per month.

Minimum pay UK is £5.89 per hour, I guess same goes for the USA. Plus and minus tax, what a person in UK earns in 2 days = what a Nigeria is still fighting to earn in 1 month.