helinues:
Hypocrisy stinks more than rotten eggs.

If the top candidates in the last election all promised to remove subsidy, what exactly is this question about when almost all the supporters of the candidates agreed on subsidy removal.

It's indeed true that na only Olofo dey binu Ologo

helinues:
Hypocrisy stinks more than rotten eggs.

If the top candidates in the last election all promised to remove subsidy, what exactly is this question about when almost all the supporters of the candidates agreed on subsidy removal.

It's indeed true that na only Olofo dey binu Ologo

However, what many people fail to appreciate is that the current subsidy regime also fuels current inflation through higher budget deficits that are financed through ways and means and other forms of public debts. Most economists are in agreement that budget deficits financed through ways and means are inflationary. Current data shows that 95 per cent of government revenue is spent on payments of interests on government debts. It follows, therefore, that nearly all non-debt recurrent expenditure is financed by debt, including fuel subsidy. This is inflationary.

Both current fuel subsidies and what will occur after subsidy removal have negative equity effects. Nearly 80 per cent of current subsidies are appropriated by the top 20 per cent of the society. The last 40 per cent of the society benefits less than 10 per cent with poor rural folks even with lesser benefits. In the short term, the poor will not only lose their share of the benefits but also pay some share of the inflationary costs. It is this category of society that should be considered in petrol price adjustments. Some forms of cash transfers, or more appropriately channeling more government expenditure to support commodities that the poor consume could be one way of mitigating the economic impacts on the poor. The subsidy recovered from the rich can be used to support the poor.

Another common argument against subsidy removal is that the additional revenue from subsidy removal will be stolen, or misappropriated by the government. This argument does not recognise the essential element of liberalisation.

The current subsidy regime has given so many discretionary powers to government officials that have turned the administration of subsidies over the years into a cesspool of corruption.

The sudden increase in daily petrol consumption from 30 million litres in less than five years to a current estimate of around 100 million litres per day is a testimony of underlying sleaze and perhaps smuggling effects, as fundamental economic drivers do not justify the growth, after controlling for the rise in the price of fuel, downturn in economic activities due to the pandemic, insurgency, decline in transportation activities, among others.

The 2012 House of Representatives report on the downstream petroleum sector shows the network of corruption in the regulated environment, including the foreign exchange sleaze that took place during the period.

With liberalisation, the government’s involvement in the sector will move from direct participation to indirect, as is happening in another network industry, the telecommunication sector. The downstream petroleum sector should be able to attract global players in the sector like MTN, Airtel, Globalcom and others. MTN and Airtel today are among the largest contributors to domestic investment, employment, and tax revenue.

According to the Federal Inland Revenue Service (FIRS), the combined taxes revenue from top 17 companies listed in the Nigerian Exchange Limited (NGX) was N589,6b in 2021. MTN paid N138.03b, second only to Dangote Cement Ltd which paid N173.92b. Total company income tax in 2021 was N1747.99b, while total Petroleum Income Tax was N2006.45b.

In other words, MTN alone pay nearly 8 per cent of total company income tax in 2021

helinues:
Hypocrisy stinks more than rotten eggs.

If the top candidates in the last election all promised to remove subsidy, what exactly is this question about when almost all the supporters of the candidates agreed on subsidy removal.

It's indeed true that na only Olofo dey binu Ologo

Why are oil subsidies bad economics?


Every year, the Nigerian government runs huge budget deficits that could have been avoided if money budgeted for oil subsidies was allocated to other critical projects.

Subsidies should be used to spur investment in activities that raise the productive capacities of an economy (such as education, health, entrepreneurship, and infrastructure). They should be targeted at strategic sectors of the economy. They should not be used to finance non-durable consumption items like petrol.

Oil subsidies are inequitable, as they transfer the national wealth to those who own several cars and add little or no value to the national economy.

In lieu of subsidies, the government should invest massively in public transportation and boost the transport allowances of public-sector workers.

Removing fuel subsidies would also be good for the environment and safety on Nigerian roads. When motorists pay the full economic price for petrol, they will drive less, emit less pollution and reduce the incidence of road accidents.

There should be a clear communication to Nigerians that the removal of fuel subsidies favours the poor, and eliminates one of the several perks that the Nigerian elites undeservedly enjoy.

helinues:
Hypocrisy stinks more than rotten eggs.

If the top candidates in the last election all promised to remove subsidy, what exactly is this question about when almost all the supporters of the candidates agreed on subsidy removal.

It's indeed true that na only Olofo dey binu Ologo

nairalanda1:
Okay, I am going to leave this to the experts.





.


From The Guardian: Reflections on Fuel Subsidy regimen (published in August 2022)

SAUCE HERE

Kukutente23:

You ignored my question on the other thread. China paid its refineries $2.2trn subsidy in 2020.
Yet their refineries are working fine. In light of your earlier claim that subsidy killed refineries in Nigeria, and are the reason we can't have new refineries. How come subsidy only kills refineries in Nigeria and not in China?

nairalanda1:


Chinese subsides: implicit subsides...paid to already functioning refineries...which are not selling below the production cost.

Nigerian subsides: explicit subsides...basically, price of fuel is kept cheap by keeping it below the production cost, and paying a subsidy to cover the losses. Because the production cost keeps rising, so does the cost of the subsidy, and eventually the production cost rises beyond a point where the subsidy cannot cover it.

Result...collapse, corruption , sabotage.

Kukutente23:

Can you explain the difference between implicit and explicit subsidies as you term it? Nigeria's refineries were functioning when they were being paid subsidies and they were not being paid so as to sell below production cost. Do you dispute this?

In China, once international price of crude goes above $40, the govt moves in to start paying subsidies to refineries to keep pump price low. How is this different from what obtained with Nigerian refineries such that it killed them according to you?

Secondly, you're now making a claim of production price rising. How come it's only in Nigeria that production costs keep rising?

nairalanda1:


Yes. Subsidy is the amount paid to cover the difference between the cost of supply (which includes the production cost) and the government set subsidsied price.

The thing is , refineries need to make more than the cost of supply, so that they can have enough profit to pay for maintenance and the lot. In Nigeria, due to years of not letting the refineries make a profit, because they were selling under the production cost and cost of supply, refineries ran down and were damaged.

That's the problem with explicit subsides.

Implict subsides are paid to the refineries in teory to help reduce their pridiction cost and by extension fuel prices. They are not meant to make the refineries sell at a loss.




Easy. The money goes to the refineries to help cover some of their costs associated with production (we did something almost similar with Dangote by giving his cement company some tax breaks). It does not mean they would sell fuel at say the equivalent of N150 and below.





It is rising everywhere. Ghana, which has two refineries, and no subsidy has had a rise in price of fuel yesterday to the equivalent of over N800 per liter. (Also there are cost of living issues all over the world...see Kenya and even the UK).

Kukutente23:

You did not explain the difference between implicit and explicit subsidies clearly.
From what you wrote, you seem to think explicit subsidies mean forcing refineries to sell below production cost. If so, did that ever happen in Nigeria and when?
You also claim implicit subsidy is "theory" whatever that means and is meant to help refineries reduce production cost. In other words, do you support "implicit" subsidy as against "explicit"?

Dangote has gotten over $6bn from nnpc to cover the cost of building his refinery. Is that implicit or explicit and what does that do for the market price?

UK just recorded a drop in inflation to below 8% last month.

nairalanda1:



K.

Kukutente23:

Don't just K.
You're trying to claim refineries in Nigeria failed because govt forced them to sell below production price which is totally different from being paid subsidy but which you're trying to muddle up to confuse yourself. That claim of yours is called price control and not subsidy. Subsidy is an interventionist model and not just control by force. That's why I'm waiting for you to make that direct claim that govt forced our refineries to sell below production cost without subsidies and give the period so I can go and check to know when such occurred.
What's obvious though is that you can't prove why subsidy will kill refineries in Nigeria but not the ones in China. That's what I'm waiting for

nairalanda1:


L.

Kukutente23:

Is that all

SalamRushdie:
To make Nigerians support any policy tell them it will affect the rich and they will support your😄

Buhari told them he will jail the rich they supported him .

Peter Obi told them he will block all channels that the rich loot through they supported him

Tinubu told them Fuel Subsidy benefits only the rich and they believed him 😄😄

The poor will always be easy to manipulate
If you want him to support your religion tell him it will be hard fro richman to enter heaven but easy for the poor and infact all the poor will get MANSION in heaven 😄😄😄😄😄😄😄😟😟😄😄

greatiyk4u:
Permit me to gently ask you this question:

Why did you support the removal of subsidy from fuel?

They told you that some people are stealing from it and enriching themselves. Right?

You should have asked them: whose duty is it to ensure there is no stealing? And those stealing, are they invincible?

Then, very importantly. . . Why punish me for your failure? Your job was simple, safeguard the crude oil flowing from my backyard and deliver it to me safe and affordable as my employee.

So, if these same people cannot stop ALL the stealing from subsidy, you now suddenly believe that they will not steal ALL the proceeds that will come out from the removal of fuel subsidy?

Shey you dey whine me ni

With subsidy, they steal...while you also get the oil cheaper. That is 1:1

Without subsidy, they steal, and you get the oil very expensive. That is 2:0 against you.

Even Arsenal fans will prefer 1:1 to 2:0

Copied from
#FacebookTelevision

greatiyk4u:
Permit me to gently ask you this question:

Why did you support the removal of subsidy from fuel?

They told you that some people are stealing from it and enriching themselves. Right?

You should have asked them: whose duty is it to ensure there is no stealing? And those stealing, are they invincible?

Then, very importantly. . . Why punish me for your failure? Your job was simple, safeguard the crude oil flowing from my backyard and deliver it to me safe and affordable as my employee.

So, if these same people cannot stop ALL the stealing from subsidy, you now suddenly believe that they will not steal ALL the proceeds that will come out from the removal of fuel subsidy?

Shey you dey whine me ni

With subsidy, they steal...while you also get the oil cheaper. That is 1:1

Without subsidy, they steal, and you get the oil very expensive. That is 2:0 against you.

Even Arsenal fans will prefer 1:1 to 2:0

Copied from
#FacebookTelevision

Cromagnon:
[b]
Capitalism rocks
Socialism sucks
[/b]
Na
Figured that out myself

No need
Monopolies don't work like that
You can keep speaking grammar or you can stop scarcity with the attendant losses caused by subsidy

Cos you can't do nothing and they will(who will want to be assassinated or impeached for your lazy asss

at least they're will be no more scarcity

Shey you dey whine me ni

With subsidy, they steal...while you also get the oil cheaper. That is 1:1

Is it really cheaper with money being looted and not invested?
No subsidy in America yet their per capita is 60k
Your signature and at 2k dollars
Who lose?


Without subsidy, they steal, and you get the oil very expensive. That is 2:0 against you.

Without subsidy they have to be creative in their stealing(actual projects EFCC can prove, subsidy is just free for all

Even Arsenal fans will prefer 1:1 to 2:0

Copied from
#FacebookTelevision better to lose some games so you forced to get new coach and players than to be managing draw for 63yrs

Zupay:


It is like all the surgeons agreeing that a malignant tumor has to be removed from a patient's body but the surgeon who is doing surgery went in without the anesthesiologist whose role is to help the patient not feel pain during the procedure because the surgeon believes the patient feeling the raw pain during the procedure, is for his own good!

nairalanda1:


The problem is, it is too painful

And the problem also is, your side used subsidy as a political bat in 2012 to hit GEJ with. And as a result, he listened to you and we lost a golden chance to remove subsides AND have some savings.

Right now, we have to remove subsides because as a reuslt of your 'people's revolution' 11 years ago, we kept subsides for 10 more years than we should, and grew a large deficit that could only be fed by loans and more loans.

And even then YOUR party SHOULD have removed subsides in 2015, but you did not...and that is why we are now spending 99% of our revenue servicing debt...and have been using loans to pay for subsides since 2016.

Oga, people are angry with you because politics.

Yeah, GEJ should have been bold. But in 2012, your leaders knew better, but they did not help tell Nigerians they knew better.

So, better stop pretending tinubu did this out of courage...he did this because he has no choice.

Kukutente23:

You ignored my question on the other thread. China paid its refineries $2.2trn subsidy in 2020.
Yet their refineries are working fine. In light of your earlier claim that subsidy killed refineries in Nigeria, and are the reason we can't have new refineries. How come subsidy only kills refineries in Nigeria and not in China?

Kukutente23:

Can you explain the difference between implicit and explicit subsidies as you term it? Nigeria's refineries were functioning when they were being paid subsidies and they were not being paid so as to sell below production cost. Do you dispute this?

In China, once international price of crude goes above $40, the govt moves in to start paying subsidies to refineries to keep pump price low. How is this different from what obtained with Nigerian refineries such that it killed them according to you?

Secondly, you're now making a claim of production price rising. How come it's only in Nigeria that production costs keep rising?

Cromagnon:
so you want us to do another 11yrs of bad policy because it's painful?

Cromagnon:
what if emergency and their is no anesthesia and death is imminent?

nairalanda1:


No I don't.

But with the fact that, at the end poor people do suffer, the idea is tempting

But at the end, we keep subsidy, and in a few years, the suffering would be twenty times worse than our imaginations. So, take the subsidy removal route for now.