What is Tinubu's government doing with savings from petrol, kerosene and diesel subsidy removal?

https://www.nairaland.com/7744333/world-bank-okays-fresh-500m

Subsidy from electricity, education and professional bodies have also been removed. What will the poor masses benefit from all these?

Newton2024:


What is Tinubu's government doing with savings from petrol, kerosene and diesel subsidy removal?

Two reasons

1.Oil prices are not where we want them to be

Oil is around 76 dollars per barrel. Our economy needs it above 100 dollars per barrel before we can even talk about having enough money.
Previously oil has been as low as 30 dollars, even as low as 20 dollars per barrel.(Our fiscal breakeven is between 103-130 dollars per barrel as at 2021).

When oil prices are below the fiscal breakeven for Nigeria...we have to borrow ..

2. Debt servicing is taking about 60% of our budget.

When that happens, we still have to spend more and more money covering the hole in the budget...and that comes from more loans, worsening our debt.


Subsidies worsened the debt over time, because annual rising subsidy costs meant that the defcit in the budget rose and rose and rose...meaning we had to take loans to cover the debt. And the fun part...we still owe NNPC money in subsidy claims in trillions of naira.

And here we are still taking loans.

If y'all had allowed GEJ removed this subsidy then ... But no we must do tribalism

obonujoker:
If y'all had allowed GEJ removed this subsidy then ... But no we must do tribalism

GEJ should have been bold enough to tell tinubu, buhari and company to go and rest, and removed the subsidy completely.

He didn't, and in fairness, all his predecessors were the same. Even Abacha did not remove subsidy.

Newton2024:
Subsidy from electricity, education and professional bodies have also been removed. What will the poor masses benefit from all these?

the poor will only benefit more agbero on the road and police extortions from Jos to ph trucks of solid minerals paid, 150k to police and touts on the road, no serious government will permit the nonesense, it’s broad day light robbery

We go borrow tire and world bank go collect interest tire.

Newton2024:
Subsidy from electricity, education and professional bodies have also been removed. What will the poor masses benefit from all these?

Why is he still borrowing?

nairalanda1:


GEJ should have been bold enough to tell tinubu, buhari and company to go and rest, and removed the subsidy completely.

He didn't, and in fairness, all his predecessors were the same. Even Abacha did not remove subsidy.

You people should stop all this boldness statement because it's baseless, senseless and NONSENSICAL.

Buhari is a man who has guts - he didn't give a hoot. Despite that, he still kept the subsidy running. It's called empathy. Buhari didn't speak to Nigérians a lot, but the few times he did, he always mentioned that he was aware that Nigerians were going through hard times.

You cannot make that statement all the time and still remove the subsidy. By the way, let me emphasize that both the rich and poor enjoy PMS subsidy in Nigeria. Government demonized subsidy because they lacked the capacity to tackle the fraud associated with it. There is nothing wrong with an oil-producing country subsidizing PMS for its citizens.

As for why Nigeria is still borrowing, well, I am not surprised. If Lagos State can be this rich and still borrows money up and down, why won't Nigeria borrow after Tinubu has successfully pushed all the financial burden government used to bear to the people? It's the same man and his clique who run Lagos and Nigeria today.

nairalanda1:


Two reasons

1.Oil prices are not where we want them to be

Oil is around 76 dollars per barrel. Our economy needs it above 100 dollars per barrel before we can even talk about having enough money.
Previously oil has been as low as 30 dollars, even as low as 20 dollars per barrel.(Our fiscal breakeven is between 103-130 dollars per barrel as at 2021).

When oil prices are below the fiscal breakeven for Nigeria...we have to borrow ..

2. Debt servicing is taking about 60% of our budget.

When that happens, we still have to spend more and more money covering the hole in the budget...and that comes from more loans, worsening our debt.


Subsidies worsened the debt over time, because annual rising subsidy costs meant that the defcit in the budget rose and rose and rose...meaning we had to take loans to cover the debt. And the fun part...we still owe NNPC money in subsidy claims in trillions of naira.

And here we are still taking loans.

Our economy needs it above 100$ because of increased government expenses, a huge percentage of which is the subsidy.

Now that subsidy has been removed, that expenditure should have fallen drastically from June, 2023.

So, no excuse to borrow

SmartPolician:


You people should stop all this boldness statement because it's baseless, senseless and NONSENSICAL.

Buhari is a man who has guts - he didn't give a hoot. Despite that, he still kept the subsidy running. It's called empathy.

Buhari didn't speak to Nigérians a lot, but the few times he did, he always mentioned that he was aware that Nigerians were going through hard times.

You cannot make that statement all the time and still remove the subsidy. By the way, let me emphasize that both the rich and poor enjoy PMS subsidy in Nigeria. Government demonized subsidy because they lacked the capacity to tackle the fraud associated with it. There is nothing wrong with an oil-producing country subsidizing PMS for its citizens.

As for why Nigeria is still borrowing, well, I am not surprised. If Lagos State can be this rich and still borrows money up and down, why won't Nigeria borrow after Tinubu has successfully pushed all the financial burden government used to bear to the people? It's the same man and his clique who run Lagos and Nigeria today.

Empathy is also why we don't have running refineries since price controls brought about by subsides, plus the fact that subsides could not cover the resulting losses adequately, led, over time , to us losing donestic refining.(And fuelling corruption and sabotage which brought the refineries even down further).

Before you start, most African countries with working refineries DO NOT HAVE SUBSIDIES. The ones that have have smaller populations than we do, and as such can afford it.

Also, subsidy costs rise year in and out due to rising cost of producton and transport costs...which lead to government spending more and more of our cash on subsidies..leading to a deficit that in the abscence of low income from other sources is filled by...you guessed it...loans.

(Ever wonder why GEJ wanted to take the crazy decision to remove subsidy in the first place? Our subsidy costs in 2011, was three times our subsidy costs in 2010. Buhari in 2019 did partial removal because subsidy costs in 2019 were four times higher than they were in 2018. It's the nature of the beast and it is not due to corruption.).


There's empathy and there's reality.

Empathy led to us becoming a net importer of fuel because not one of the guys who got licences for refineries wanted to start because subsidy would have meant massive losses if they did (Dangote started as did BUA because if they could not meet up their loans, the banks that loaned them money would take the cash from their cememt and other businesses.).

If we refused to give a child sugar all the time, empathy in your definition would mean we just give the child sugar. When the child develops cavities, obesity and so forth as a result of the empathy, where would we be?

GEJ and Buhari were very empathetic. See where that led us. Tinubu would have been emphatetic too...if not that our high debt issue forced him to take a decision to remove subsidies.

You are free to disagree with me, call me names, call me oppressor, etc....but facts is facts....and to be honest, I effing hate it. But at the end, wishes are not horses. If only.

nairalanda1:


GEJ should have been bold enough to tell tinubu, buhari and company to go and rest, and removed the subsidy completely.

He didn't, and in fairness, all his predecessors were the same. Even Abacha did not remove subsidy.

If tinubu,buhari,el rufai,pastor bakare ,and all your musicians and 1/3 of your governor's are against subsidy removal.there is absolutely nothing the head of state can do.he cannot choosee to see his govt go up in flames if the pipu decide to crumble the whole country

nairalanda1:


GEJ should have been bold enough to tell tinubu, buhari and company to go and rest, and removed the subsidy completely.

He didn't, and in fairness, all his predecessors were the same. Even Abacha did not remove subsidy.

Abacha did not remove subsidy because he had one of the best brain as his finance and economy minister then, he didn't increase fuel price during his time and also the exchange rate was stable, he didn't borrow a dime, in fact his govt suffered several economic sanctions from the west, yet you can still point to 2or 3 major infrastructures built by the supposed corrupt man

Subsidy is and will never be our problem, countries pays subsidy and will continue to pay for its citizens

As long as the govt officials are still living expensive lifestyle, we will continue to borrow to pay for their lavish and expensive luxury life in the expense of the poor citizens

But we are not ready as citizens because what they do is to set us up with religion and ethnicity and the rest is history

Imagine borrowing $100m from the world bank, same amount of money is being used to pay for entertainment and newspaper allowances of senators and ministers

Why not do the needful by asking them to also sacrifice

Why borrow!
It is very simple
The fg accounts is summarized as follows

Ex president signed #22 trillion budget for 2023 the highest ever @470 to $1
The revenue in the 2023 budget is #10.5 trillion


The president now needs #11 trillion to borrow to secure that shortfall
This is plus extra #6 trillion for servicing of debt


😂😂😂😂😂😂Buu clean house🚴🚴🚴🚴🚴


Now that is at #470 to a dollar
We now have #750 to a dollar

baralatie:

If tinubu,buhari,el rufai,pastor bakare ,and all your musicians and 1/3 of your governor's are against subsidy removal.there is absolutely nothing the head of state can do.he cannot choosee to see his govt go up in flames if the pipu decide to crumble the whole country

Even then, it had to go.

Look, put aside politics for a moment, and put out any suspicion that one is attacking GEJ.

See the image below

Look at the figures for 2010 and 2011. See what happened there?

And see 2012, that was a result of GEJ partially removing subsidy by raising prices from 65 to 97.

I mean, when faced with the fact that subsidy costs are going to take over your earnings in a few years....do you listen to people who are making decisions based on facts, or people who cannot see the damage being done by subsidy staying?

Same thing with Buhari when he took over.

At some point, leaders have to be strong and decisive. Nigerian leaders, not just GEJ, have not been strong and decisive over subsidy (Tinubu is only taking the decision because the DMO and other experts are telling him that he cannot borrow his way out of the resulting deficit from paying for subsides). And we paid for it with debts, and with a loss of refining capacity.


Look, I know you guys don't like this subsidy removal, and so do I. I wish we could keep it. But we have a low tax to gdp ratio because people are too poor in this country, and we do not earn enough from oil, and that is before we talk about the looting and stealing that so annoys me that I have to restrain myself from losing my temper about it on this site.

But we can't keep subsidy. If that makes me a full, so be it. We can't keep it. Lord knows how much I hate that fact.

nairalanda1:



Empathy is also why we don't have running refineries since price controls brought about by subsides, plus the fact that subsides could not cover the resulting losses adequately, led, over time , to us losing donestic refining.(And fuelling corruption and sabotage which brought the refineries even down further).

Before you start, most African countries with working refineries DO NOT HAVE SUBSIDIES. The ones that have have smaller populations than we do, and as such can afford it.

Also, subsidy costs rise year in and out due to rising cost of producton and transport costs...which lead to government spending more and more of our cash on subsidies..leading to a deficit that in the abscence of low income from other sources is filled by...you guessed it...loans.

(Ever wonder why GEJ wanted to take the crazy decision to remove subsidy in the first place? Our subsidy costs in 2011, was three times our subsidy costs in 2010. Buhari in 2019 did partial removal because subsidy costs in 2019 were four times higher than they were in 2018. It's the nature of the beast and it is not due to corruption.).


There's empathy and there's reality.

Empathy led to us becoming a net importer of fuel because not one of the guys who got licences for refineries wanted to start because subsidy would have meant massive losses if they did (Dangote started as did BUA because if they could not meet up their loans, the banks that loaned them money would take the cash from their cememt and other businesses.).

If we refused to give a child sugar all the time, empathy in your definition would mean we just give the child sugar. When the child develops cavities, obesity and so forth as a result of the empathy, where would we be?

GEJ and Buhari were very empathetic. See where that led us. Tinubu would have been emphatetic too...if not that our high debt issue forced him to take a decision to remove subsidies.

You are free to disagree with me, call me names, call me oppressor, etc....but facts is facts....and to be honest, I effing hate it. But at the end, wishes are not horses. If only.

Sorry I didn't bother to read your long story.

My point is crystal clear - there's nothing bold about removing PMS subsidy.

After all, all the three major candidates stated they were going to remove it.

That's as simple as ABC!

SmartPolician:


Sorry I didn't bother to read your long story.

My point is crystal clear - there's nothing bold about removing PMS subsidy.

After all, all the three major candidates stated they were going to remove it.

That's as simple as ABC!

And it is gone, and it is a good thing.

Next...we want diversificaiton and an end to corruption

TA.

richidinho:

T

U.

baralatie:
Why borrow!
It is very simple
The fg accounts is summarized as follows

Ex president signed #22 trillion budget for 2023 the highest ever @470 to $1
The revenue in the 2023 budget is #10.5 trillion


The president now needs #11 trillion to borrow to secure that shortfall
This is plus extra #6 trillion for servicing of debt


😂😂😂😂😂😂Buu clean house🚴🚴🚴🚴🚴


Now that is at #470 to a dollar
We now have #750 to a dollar

Summary tinubu must have inherited #17 trillion naira in debt at #470($37 billion) and has now ballooned to #27 trillion @ #750



✍️✍️✍️✍️✍️Bubu na juninho.🤷he just throw these give who come after

Secondly
2022 budget was #17.2 trillion revenue #14 trullion(#459 to one dollar)

2021 budget is as #13.6 trillion revenue #103 trillion(#403 to one dollar)

richidinho:


Abacha did not remove subsidy because he had one of the best brain as his finance and economy minister then

Yes, and the refineries continued their steady decline under him.

At the end of the day, the refineries all declined from producing well in 1990 to producing nothing by 2013. Subsidy.

Subsidy is and will never be our problem, countries pays subsidy and will continue to pay for its citizens

1.Most countries do not pay the kind of subsidy we do. They pay subsidy to reduce production costs, but still allow the producer make a profit.

We just sold fuel below the price of production for decades...and that impacted profits.

Once upon a time a lot of Communist countries had subsidies for everything. And it all went to crash in 1990's. At some point they had to start doing capitalism to survive. All of them are now capitalist except the DPRK, which is buffered by China to prevent the US from being at their borders.

As long as the govt officials are still living expensive lifestyle, we will continue to borrow to pay for their lavish and expensive luxury life in the expense of the poor citizens

But we are not ready as citizens because what they do is to set us up with religion and ethnicity and the rest is history

Yes that is bad, but the thing is, cutting lavish spending and lavish government is not going to pay for subsidy costs at all.

Like now, our subsidy costs this year were on average 300 billion naira at least monthly. House of repos and senate had a budget less than 170 billion for the year. If we cut that, plus presidential spending of 14 billion...it won't cover subsidy costs for one month. Just a few weeks and that is that.

See where we are?

And yes, we have to cut lavish spending and end corruption. We have to, we have no choice.

Imagine borrowing $100m from the world bank, same amount of money is being used to pay for entertainment and newspaper allowances of senators and ministers

100 million is a lot of money, but as I have shown above, it won't do much for us . We have spent 4 billion dollars on subsidy till June ending. 100 million is a drop in the ocean

Why not do the needful by asking them to also sacrifice

[/quote]


We should, and God knows I agree with this 100 percent. But it won't do much, as I have shown.

But even then, they should sacrifice.

The real question is how did the last administration end up with a $36 billion dollar debt inserted into the budget.
That is as of now Nigeria owes or is looking for 36 billion dollars @470 or 27 trillion naira at #750

Next year budget never dey o

So you are borrowing because the last administration budget states that you are to borrow $36 billion dollars.
QED

Not about subsidy or no subsidy.it has been passed by the Nass and the executive that Nigeria must borrow 🙆🙆🙆

baralatie:
Secondly
2022 budget was #17.2 trillion revenue #14 trullion(#459 to one dollar)

2021 budget is as #13.6 trillion revenue #103 trillion(#403 to one dollar)

No be small addition dey enter this bubu budget ooh

I suspecting deliberate revenue theft🤔 of at least .......trillions

nairalanda1:


Two reasons

1.Oil prices are not where we want them to be

Oil is around 76 dollars per barrel. Our economy needs it above 100 dollars per barrel before we can even talk about having enough money.
Previously oil has been as low as 30 dollars, even as low as 20 dollars per barrel.(Our fiscal breakeven is between 103-130 dollars per barrel as at 2021).

When oil prices are below the fiscal breakeven for Nigeria...we have to borrow ..

2. Debt servicing is taking about 60% of our budget.

When that happens, we still have to spend more and more money covering the hole in the budget...and that comes from more loans, worsening our debt.


Subsidies worsened the debt over time, because annual rising subsidy costs meant that the defcit in the budget rose and rose and rose...meaning we had to take loans to cover the debt. And the fun part...we still owe NNPC money in subsidy claims in trillions of naira.

And here we are still taking loans.

You again? You have started giving excuses already!

I've already said it that Nigerians will be made to suffer in vain, unfortunately, and I'll remind you hypocritical supporters in 5yrs time.

OP, no money will be saved from subsidy removal


Know this and know peace

.

ChybuzzDD:


You again? You have started giving excuses already!

I've already said it that Nigerians will be made to suffer in vain, unfortunately, and I'll remind you hypocritical supporters in 5yrs time.

Thanks for completely misunderstanding my point, and for telling me I am excusing the government

At the end of the day, the government knows all I have said is true...which is why a sensible government would have found ways to find our country extra sources of money.

They did not, which is why they are bad government

You people should stop being abusive and read what I have said clearly. Because I am not talking like you does not mean I don't agree with you that our government has messed up, where we disagree is the mechanism.

We have been here before, and will always be here, so long as we do not learn our lessons.