karl max:


So the jamboree that your constitution is running as democracy with useless ministries that receive salaries aπϑ fund used for the epileptic services of the police and PHCN where did the money come from? GOD

blacksta:

This can't be right. This figures are made up from hell. So far from all the available government data-. Subsidy payments is a combination of interest payments, demurrages, inflated figures, actual imported fuel. The figures supplied by the op is based on so called consumption only.

When I find the document. I will post the link.

Why the change of subsidy value from previous years, the average crude price for last year was largely above $100/bl, coupled with exchange rate differentials and  increase in energy demand  due to population growth, GDP growth & increase in smuggled products across Nigerian borders.

Deep Sight:

The Opening Post is a staggeringly shallow, false and fraudulent argumentation which misses the pith of the question regarding the 1.3 Trillion issue.

The issue is pretty simple but I am being forced to repeat it all over this board: There are various factors which determine the aggregate cost spent on the fuel subsidy - the critical point is that as long as the subsidy regime has existed - ALL of these factors have existed. The question therefore arises as to what exactly within these factors accounts for a five-fold increase within ONE YEAR ONLY - notwithstanding that the same factors were present in all previous years, but NEVER had such a staggering impact.

In the eight years preceding 2011, the subsidy has ALWAYS been financed well below 300 billion naira. Indeed to be exact, the amount budgeted for the subsidy in 2011 was 240 billion naira only.

Having operated the subsidy regime for several years already, the government of course had a clear idea as to the cost of the subsidy and such information would have been the basis for arriving at a budget of 240 billion for the subsidy within the 2011 budget. The question thus is; what factors could have been so overwhelmingly different in 2011 - which factors did not operate in prior years - as to cause an increase from 240 billion to 1.3 trillion? ? ?

Those factors CANNOT be any of the factors listed by the OP because ALL the factors listed by the OP operated in all prior years and only increase or decrease marginally year on year. For example, the OP says -

In the foregoing the OP mentions average price of crude, foreign exchange differentials, increase in energy demand due to population growth, and increase in smuggled products across Nigerian borders as factors.

Let us look at these factors one at a time and see whether either any one of them or a combination of all of them could be responsible for the ridiculous rise in the cost of the subsidy in 2011. What we find is that these are out rightly st.upid excuses for the OP to proffer as responsible for the 2011 increase.

He mentioned the following factors -

1. Average price of Crude: The average price of Crude Oil in 2010 and 2011 were not different to such a degree as to justify the assertions of the OP. The differentials observable can by no means account for any tangible increase across the year - much less an increase of over 1 trillion naira. In reality Oil has sold at over a 100 USD per barrel a different points within the last five years and at no time has it had anything even remotely close to this effect on the cost of the subsidy. To be more precise, the differential between 2010 and 2011 taken as an annual average does not exceed 12 – 15 per cent. Thus if this were actually true, it would at best increase the subsidy from 240 billion to a little less than 270 billion.

2. Foreign Exchange differentials: between 2010 and 2011, the naira did not fluctuate beyond 12 percent points of its value against the US Dollar. If we are to place this fluctuation against the value of the subsidy, it would have at best meant an increase in the cost by about 30 billion naira - thus a total cost of about 270 billion - still well below the 300 billion naira mark, and without the slightest hope of approaching anything even remotely resembling 1 trillion, not to speak of 1.3 TRILLION. Now even if we add the supposed crude oil price fluctuation, that would take us to about 310 billion naira only!

Thus even a combination of these excuses falls FAR short of any hope of a justification of the 1.3 trillion figure!

3. Increase in energy demand due to population growth: This is actually the most foolish factor advanced by the OP for many reasons.

- First and foremost, population growth did not commence in 2011. It has always been there. If any population growth affects the consumption, it occurs every year and represents a slight marginal increase at best. It can never account for a sudden increase of five fold because the population grows by a fraction only annually. So that is beyond preposterous.

- But in reality, the sheer foolishness of this statement is understood better when one realizes that population growth is represented by new babies. Gentlemen, babies don’t drive cars. And even if they did, why have the new babies who were driving cars every year prior to 2011 suddenly increased a thousand-million fold in 2011. This is ignorance, thoughtlessness and pure hilarity of reasoning at its height. It is so profoundly st.upid that it makes me understand why Nigerians regard Sanusi Lamido as a bright guy. Because Nigerians are very easily fooled by grammar and figures. This OP here is has advanced a hilariously da.ft argument and it is being applauded!

[b]4. Increased in Smuggled Products: - [/b]Again, the mention of this factor just shows me the general poverty of intellect that many Nigerians suffer from. Indeed I heard several people congratulation the CBN Governor for his “brilliance” when he mentioned this. I was so aghast that my jaw dropped open. Anywhere else in the world government officials would be loathe to give such a brazen admission of utter incompetence. Not so here.

At all events, for the purposes of the arguments advanced by the OP, the simple reason that this factor fails as a reason is because petrol has a marketing chain which ends in petrol stations and therefore it is possible by backward tracing to determine the volume which reaches Nigerian Petrol stations. Given that each Operator has records of the marketers it purchases from, it is also possible to easily determine what quantities are sold in Nigeria as against quantities that take flight as smuggled petrol. Thus any serious government will only have to pay that which ends in the Nigerian Market. A government that cannot do this, Is not fit to run a nursery school.

It is thus obvious that the reasons proffered by the OP are as ludicrous as they spurious and laughable. There is none of these factors which has not always existed: and there is none, taken either by itself or together with others - that could justify a rise from 240 billion to 1.3 trillion. And that is a cast iron fact.

The question thus is; what factors could have been so overwhelmingly different in 2011 - which factors did not operate in prior years - as to cause an increase from 240 billion to 1.3 trillion? ? ?

karl max:

So Ʊ want tell me that the naira to dollar rate has not increased since 2008?

Answer this primary school questions

What is the exchange rate of the dollar to the naira in 2008 and 2011?