Fuel Subsidy: Understanding The Situation Like A Primary 5 Pupil

Many people do not understand the politics behind fuel subsidy and it's dangers to the development and growth of Nigeria.

The intension of the government to subsidise petrol was simply to make the product affordable for Nigerians and make life easier. So, the average price of petrol in the world can be as high as N590, however, the Nigerian Government will subsidise the product and fix price at N185 bringing total amount of subsidy per litre to N405.

The average consumption of litres of petrol in Nigeria per day is 60 million litres. However, Marketers of the product loads as much as 100 million litres and above per day.

This means the Nigerian Government is expected to pay as much as N405 × 100,000,000 (litres) as subsidy per day to the Marketers of the product to keep prices at N185 for instance. This brings the amounts to N40.5 billion daily and about N1.2 trillion monthly. Kindly take note that this amount can either decrease or increase following prices of petrol at the international market.

So, just try to wrap your head around it and know what Nigeria expends on fuel subsidy alone in a year - obviously some billions of dollars.

Here's the irony of whole arrangement

1. Petroleum Marketers (major petrol dealers with tank farms) usually divert larger quantity of the subsidised petrol to neighbouring countries to resell at the international market price. So, they make same amount of money the Nigerian Government has paid on the subsidised petrol at the neighbouring countries.

2. This makes the product relatively scarce in Nigeria as the left over becomes lower than the daily consumption in the country. The implication is that petrol stations will be selling fairly higher than the fixed price of N185 (some sells N190, N205, N225, N250 and so on depending on the area). And during peak periods of scarcity, which are also engineered by the marketers, Nigerians still buy same subsidised petrol for as high as N400, N500 and even N800 as the case was in first quarter of this year while sleeping in filling stations. Again, marketers make double.

3. Marketers also import above the daily consumption of 60 million litres as seen above and still force the federal government to pay subsidy on the excesses, which are usually part of what they smuggle to neighbouring countries. Again, marketers dupe Nigeria.

4. This entire scenario makes a mess of the good intention of the Nigerian government to make petrol affordable for Nigerians.

5. This scarcity and high cost of the product despite subsidy leads to arbitrar increase in the cost of living. Transportation for instance, goes up crazily.

Moves to Remove Subsidy & Reactions

Therefore, successive federal governments having seen the outright abuse of the subsidy policy have always tried to cancel the policy so that market forces can determine the cost of petrol.

More so, the huge amount of money paid into the pockets of Marketers can be channeled to other meaningful venture such as infrastructural development, agriculture, social security, technology, health, etc.

However, whenever the move to remove subsidy is made, the Marketers are quick to shutdown their filling stations and deprive Nigerians access to the already subsided fuel in their possession. This leads to instant scarcity regime and hardship (like we are already witnessing).

And while the marketers make more money on one hand, they force and instigate Nigerians against the federal government with the hardship created on the other hand.

Then, the innocent Nigerians who do not understand the politics behind subsidy goes on strike, attacks the government and force her to
continue the subsidy regime. We pay more for our ignorance at the long run.


Jamiu Julius Adébáyò
@AlwaysJayjam
..

plaindealer:

plaindealer:

Redoil:
when will you learn to keep quiet
.
Same way when the past regime of President Goodluck Jonathan wanted to remove and rid Nigeria of this economic monster 13 years ago, but all you demons in the APC vehemently opposed him only to perpetuate the same fraudulent fuel subsidy then lied of removing it again and again. Bunch of fucktards and retards.

Hopium:
You are only wailing.

"Wait for 3 months"

Olodo! Where was this tears when Buhari removed subsidy in January?

In case you miss it, Buhari didn't include the fuel subsidy component in the approved budget for 2023 he sent to the National Assembly. FYI, the budget covers June 2023 - June 2024.

Stop piling the blame on Tinubu. It's really sad that the majority of Nigerians know nothing about governance; little wonder they keep electing clown lawmakers. Where was everyone when the lawmakers signed the budget? I mean Buhari cooked a budget without subsidy, no one batted an eye; now that the budget is about kick in after 6 months, una begin wail. Aren't you people stupid? Please answer. Aren't you as citizens clueless?

As a matter of fact, these rants are all because Obi didn't win. If he had won, and he put his money where his mouth is, he would have removed the subsidy *immediately* *like he promised*. The effect would have been same. And FYI again,*there won't have been any subsidy for him to remove* because *Buhari had already removed subsidy in Jan 2023* before *Obi takes power*. Probably these rants would have been coming from Batists and Atiku boys.

All of una hypocrisy stink. You don't care that hardship is in the land because of subsidy removal *which was inevitable and necessary*. The complaints is because the man you desist is handling the affairs. I swear if na Obi, we won't hear pim.

God forbid that we go back to the days of subsidy. Now everyone will sit tight, citizens and leaders. Everyone. The days of laziness is over.*Don't bring that Nigerians are hardworking crap* Going forward, Nigerians will shun mental laziness.

The removal is not biting yet, this is just prelude. When the real pain starts,*like a addict suffering withdrawal symptoms* everyone one will open mouth, protest, pressurized their governors, leaders, president, ministers to do their job. Una see that epileptic power supply, it will fixed and citizens will be ones to jumpstart that process. Una see that #6trn subsidy fund that is now free, na una citizens go monitor am to make sure una leaders use am for the proper projects.

If you're an elected public officer, you better sit tight. The days of nonsense is over. Any leader wey do rubbish next 4 years is going home because the citizens are angry now *they've been pushed to the wall* and they had better see results. Thank God this last election set a precedence that power is indeed in the hands of people.

For citizens, look at the brighter future; the future is bright for the country if Tinubu can implement all his promises. For the first time in like forever, we have a president that knows what he's doing. All we can hope for he that he lands this airplane safely. We are on the right track. But don't sleep, pressurize his government so he won't slack.

Obidients you are doing good as an opposition, keep applying pressure. We pray that PDP wakes up and apply pressure too. Days of laxity is over. Everyone has a part to play.

Like I've said the future is bright. Now is the time prepare yourselves *I'm talking to the hardworking, intelligent, and enterprising*. You will reap the fruit of the land. Just don't get distracted by the noise. Keep your heads down.

Lastly, Buhari before he retired signed some game changing policies. Now states have automy in power generation and distribution. Man-mark your governors to improved power generation. States should look at what Lagos and Ekiti are doing their PPP power projects.

In the new Nigeria, not all states will look the same. We will get to see states with innovative leaders. Men will standout from the boys.

Thanks

JAMO4REAL1:
Correct thats y buhari always borrow borrow he used all our money pay subsidy

plaindealer:
The average Nigerian is clueless about subsidies and the dame it's doing to Nigeria, the economy, and the average Nigerian simply because Nigeria spends over N40 Billion on subsidies per day, I mean every day and over $10 Billion every year, money that could be channeled to fund benefiting economic activities, boost power supply, build credible infrastructures or even to pay off our entire debt.


It beats me why some Nigerians are ok with splitting subsidy money with crooks in the fuel marketing scam, the marketers pocket N10 while the average Nigerian buying cheap fuel only saves 1kobo or even less and the same marketers still make you suffer by hoarding fuel that we've already paid for and subsidized, they also ship our subsidized fuel to neighboring countries to make even 4 times more money.

Where is the sense and wisdom in colluding with the marketers and economic saboteurs to swindle your country, to hold you back just to buy cheap fuel?

Awoof syndrome is killing the greedy average Nigerian, they love to work against their own best interest.

anonymous1759:



Stop talking like a pained kid. As a leader you’ll definitely have adversaries you don’t expect them to romance all your policies even if it’s right or wrong . APC wasn’t in charge then GEJ failed to exercise his will power as the president he’s incompetent. If he’d Made a bold step today Nigerians will be praising him today if his plans worked out . What BAT did is what real leaders DO taking the BOLD step as long as you’re doing it for the “Greater Good “

anonymous1759:



Stop talking like a pained kid. As a leader you’ll definitely have adversaries you don’t expect them to romance all your policies even if it’s right or wrong . APC wasn’t in charge then GEJ failed to exercise his will power as the president he’s incompetent. If he’d Made a bold step today Nigerians will be praising him today if his plans worked out . What BAT did is what real leaders DO taking the BOLD step as long as you’re doing it for the “Greater Good “

Mabizeka:
At the end you didn't profer any solution on how government plans to deal with the marketers. Are you saying it is the poor masses that should be suffering the wickedness of the marketers? Just ranting and ranting like these Ronu people below

anonymous1759:



Stop talking like a pained kid. As a leader you’ll definitely have adversaries you don’t expect them to romance all your policies even if it’s right or wrong . APC wasn’t in charge then GEJ failed to exercise his will power as the president he’s incompetent. If he’d Made a bold step today Nigerians will be praising him today if his plans worked out . What BAT did is what real leaders DO taking the BOLD step as long as you’re doing it for the “Greater Good “

nairalanda1:


The problem is, even IF the government stopped things like smuggling...and note that smuggling is not just done by marketers.....the problem is subsidy costs would rise because ....the cost of producing petrol is never static....and once it keeps rising above the set pump price, the cost of subsidy would rise and rise and rise.

Our revenue would still be burdened heavily by subsidy payments.

donbachi:
What are the remedies?

Mabizeka:
Tinubu once opposed subsidy removal during GEJ administration when cost of living is relatively cheap. His party is in government for the past eight years and they didn't build any refinery. The masses will suffer it the more now his party has removed subsidy in the midst of suffering.

Mabizeka:
Nothing. Just complain, complain.

nairalanda1:



You gave a good explanation, but the problem is, why then did Tinubu oppose subsidy removal in 2012? When GEJ was supporting it and wanted to get rid of it then for the same reasons you outlined?

You APC supporters make things difficult for we Nigerians.....because GEJ listened to you people then, and we ended up with the mess you outlined.

Your party owes Nigerians an apology...as does PDP.

plaindealer:

plaindealer:



People who live in the past and fail to adjust to present realities are doomed to fail. This is 2023, not 2012, our realities financially and economically are not the same, our FX reserve and debt profile are not the same, and our needs and growth projections are not the same.

Change that self-destructive mindset because you sound stagnant and redundant, I won't even trust you to lead anything.