studyineu:

Why november, start now. Remove subsidy and start now so that by match it will be perfectly working.

remove which subsidy?. U talk as if u are not conversant with Nigeria politics. And what makes u think they are telling u the truth?. They should repair the refinery before removing the subsidy instead of the other way round. The benin-ore rd madam allison-madueke cried for when she was minister of transport have they repaired it? And now they are showing us on NTA what they will do with the fuel subsidy money including the construction of the same benin-ore rd. Hmmm, for u to have believed them, it shows u don't live in Nigeria.

Makin a way atleast!

Fhemmmy:

I just would like someone to tell us how come the refinery have not been fully functional before, is it money, is it human power or just selfishness and corruption?

This people can't tell even us why N1.3 trillion was spent on subsidy, and you want them to answer this kind question. The "C" word; that should give you a clue.

Bright2:

[B]Obi is a boy ,not every year oo![/b]

Well said! Nigerians are wiser now.

Breaking News: Nigerian Oil refineries working at full capacity. Hallelujah! fantastic news.  

Waking up from my dream: abi na Story story?

monkeyleg
Posts: 2259

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Re: P/harcourt Refineries To Work At Full Capacity By November – Nnpc
« #7 on: Today at 06:02:01 PM »
[size=14pt]Bloody lie[/size]

I am afraid you may have it right on this. Only 3 weeks ago, Jonathan Goodluck and the Minister of Petroleum, both informed the nation that our refineries were already working at over 90%, which in otherwords can be translated to mean near full capacity. However, when queried further, it seemed the statements did not line up with information available on each of the refineries, even at the time of the announcements, as reports still do not account for the suggested increase from 30% to 90% in the same 2011, by our government.

where is team gej (beaf , jmaine, efisher and the motely band of double digit posters ) to come and laud this lofty achievement of the gej administration?

Fhemmmy:

So is there a way forward at all?
I have always known we have a problem, when we are not able to give light to the people 24 hours a day, 7 days a week.

Amigo, the only way forward is to hold this Govt accountable. How? I suggest all Labour Unions (not Just the NLC) negotiate and demand a linkage between fuel subsidy removal and project implementation. Example:

20% reduction in subsidy starting in April 2012 for the next 5yrs. Yearly increment will be tied to tangible implementation of projects in key areas: completion of refineries, building of roads, Improvement in power supply etc. For instance, if by April 2013 an agreed upon project is not completed then Govt cannot increase prices.

Does the Labour Union have the stamina or will to stand up to this Govt? Sadly, I don't think so, but wish I'm wrong

The issue is not about reverting to N65, but ensuring Jonathan is held to his promise to develop our infrastructures.

@Oyb, if you were not blinded by sentiments, you would have seen my reply CONSPICOUSLY positioned just 2 posts away from the OP's. Happy now?

Anyone have access yet to the Video or transcript of the video of the Chat Jonathan had with ChannelsTV hosts on December 23rd? Please, we need that reel so we can play what was said to the nation. The nation needs to re-watch that broadcast.

What about the three new refineries that were promised?

Stu.ipid MO.RUNS

N/ls, pls be optimistic. Govt can do dis thing.

Lujan:

N/ls, pls be optimistic. Govt can do dis thing.

The pessimistic comments on this post reflect the irrevocably broken bond of trust between this government and Nigerians. An announcement that refineries will be fully operational by November has been greeted with so much derision and scoffing.

Can you trust this govt to do the right thing for you? For most people, the resounding answer is No. Even people in support of this move by GEJ, do not believe him in their hearts of hearts.

When GEJ came into power, three new refineries were promised. Where are they?

Thousands of Nigerians wrote the NNPC aptitude test, NONE Were called after the interview stage. Infact, nobody is talking about that uptill now.

People are dieing every day in the North and he has kept a blind eye to that.

I have never seen any president as a weakling a president before. Do you know that in the history of the USA, it is a TABOO to have somebodylike GEJ as a president-- A weakling.

of recent, one of the BEAF post is that all nation refineries but Kaduna are working to their full capacity. so the guy na mouth mouth guy!

don't fall for it , they want us to accept there subsidy removal by trick hoping that we will endure till november

@ Topic
Is this news enough reason for us to start dancing Makossa? Na today we begin hear all dat wan? Let the four refineries work at full capacity first, and let the operation and management of the refineries be taken away from the government. Then and only then would we dance hysterically in the streets.

**********Chukwu who decried the lack of maintenance of the twin Port Harcourt refineries in the last 12 years, commended the Federal Government for engaging the original constructors of the refineries for the TAM.************

That means OBJ govt did not actually do TAM as claimed by the administration that over $700 million dollars was spent for TAM during his administration. Who no chop the money na, this is why Nigerians are starting to look for now, how our resources end up in private pockets and yet they come out and tell us we need to tighten our belts the more.

where were all these before now

Thursday, 05 January 2012 13:08



Central Bank of Nigeria Governor Sanusi Lamido Sanusi (SLS) responds to some Internet Inquiries on fuel subsidy and wrote: If you will patiently read this mail to the end you will understand my position. I won't be able to repeat everything I have said over the past few years on fuel subsidy, but in summary; Fraud like theft thrives not only because of the existence of greed and benefit but of opportunity. Place yourself in the shoes of the average Nigerian "businessman" or "entrepreneur"-polite euphemisms for rent seeking parasites.

You establish an elcee for importing 20,000MT of PMS and the PPPRA says this is at a landed cost of N145 for example per liter. So u know that for every liter in that vessel you will get at least N85 as subsidy. Now you have a number of "possibilities":

1. You can off load 5,000 MT and bribe customs and other officials to sign papers confirming u offloaded 20k MT. Then do the same across the chain with a paper trail showing you delivered 20k MT to a tank farm, and maybe even that u transported it to Maiduguri entitling you to a share of the price equalization fund. Maybe for N20-N30 per liter u bribe all those who sign the papers. The 15k MT you take to Benin or Ghana or Cameroon and sell at market price thus making an additional "profit" of N55/ltr on 15,000MT!

2 you can just forge documents and have them stamped without bringing in anything and collect the subsidy -PPPRA pays based on DOCUMENTS.

3 you can bring in the fuel, load on tankers, sell some at N65N some at 80 some at 100 some across the land borders.

You can do all this and no one can catch it or prove it because somebody was paid to sign off on docs. And with a high enough margin there is too much temptation to be resisted and firepower for bribing officials.

When I spoke to the house of reps I told them why I was suspecting fraud. It starts from PPPRA "allocations" based on "capacity". You will find a company like Mobil with capacity for say 60,000 MT and a relatively unknown name with a capacity of say 90k MT. Red alert number 1.

Although PPPRA is supposed to give license only to marketers with a national distribution network you see names of companies where you have never seen a filling station in their name.

I was a chief risk officer in UBA and in FBN for many years approving loans so I know the name of every big player in every industry that Nigerian banks lend to as these are among the biggest banks in the country. I see names on the list I don't recognize either from portfolios. I looked at or industry studies over the years. Red alert number 2.

I studied the papers presented to PPPRA in a short period in 2010 (I won't tell you how I got them!). And I was surprised that on some days over 10 vessels are said to have discharged cargo in Lagos on the same day-clearly the same officers stamping and "verifying" that the vessels were SEEN. Is it really realistic that on the same day 13-15 vessels can discharge in Lagos? Red alert number 3.

Why was I interested in fuel marketing. Because the two sectors that led to the near collapse of the banking industry were capital markets and oil marketing. I am not giving any confidential info out as AMCON MD has already disclosed publicly that two companies alone -Zenon and AP-owned by the same businessman owed the Nigerian banking industry N220b. And we all saw the amount of subsidy paid to those companies published by Business Day.

So money had been taken, subsidy had been collected but loans were not repaid, and we couldn't see the money either as product in tank farms or in fuel stations or credit sales. So I became obsessed with trying to understand how that industry operated and the more I saw the more I hated it and I started the war against subsidies.

It is actually better to do a direct cash payout or add a line item to salaries called petroleum support or transport allowance capped at say N300b p/a than to keep paying it. It goes to pay middle men, rent-seekers and corrupt officers and there is no amount of preaching that will stop this fraud so long as the policy is so badly defined.

Every time oil price goes up and every time the Naira is devalued and every time the quantity of imports increases the "subsidy" and thus the "rent" increases and there is more gravy to go round. So every year we "import" more and more and deplete our reserves, and the government borrows more and more to pay for subsidy and the beneficiaries are a small group of marketers, govt officials and neighboring countries which get fuel without losing Forex! And while a person who applies intelligence can see what is happening you can't prove it in a court of law. If the man says he sighted the vessel and it was 20kMT you have to accept it. It was a year ago!

So for two years I have been convinced that this thing is a scam and that it cannot be stopped because the entire controls have been compromised. NNPC sells domestic crude, Pays whatever subsidy PPPRA says and then gives the balance after JVC to the federation account. And while Fani Kayode is right to speak up, the truth is that it was Obasanjo who first subverted the process by allowing NNPC to make the deductions before paying into federation account. Because once money goes into that account it is to be shared among 3 tiers of government so strictly speaking the deductions have always been unconstitutional as the FG was paying subsidy on behalf of itself and state and LGs without their approval.

So yes, I am willing to take all the criticism and labels and be unpopular but this has to stop and govt can find other ways of alleviating pain. Iran removed subsidies and started cash transfers directly to the poor. It is up to fiscal authorities to figure out safety nets but from where I sit and what I know this decision is not only correct but necessary and overdue. I also confirm that I have revealed nothing here I haven't spoken about before in public and it is just that Nigerians never listen!

I am not complaining about insults I am used to that. I just believe that an insult is not an argument and when people resort to personal abuse they have run out of logic.

But to then go beyond me and extend it to my dead grandfather and his "descendants" ie my late father his siblings etc I think goes beyond the pale. As a Nigerian-and as an economist- I can take a position on economic matters and this position is one I have had for years even before coming in to the central bank.

I have also explained the position on several occasions and criticized government for not doing this before. In 2010 at a public hearing in the House of Reps on the 25% saga I alerted the nation of what I considered a potential big scam around subsidies and urged for its removal. No one paid attention. The economics is very clear to me. That it is unpopular is also understandable.

The British public is unhappy with Tory budget cuts. The Greeks went on riot over austerity. Italian parliamentarians came to blows before Berlusconi was thrown out of office. The US congress is yet to approve Obama's tax increases.

Economic decisions-by definition-ALWAYS must involve a cost or an opportunity cost since for them to qualify as economic they must involve a choice in resource allocation among competing uses. An enlightened debate is one that weighs the pros and cons of removing subsidy and continuing with it.

Removing it has costs in terms of Nigerians paying more for PMS-which by the way is not the fuel for generators, power plants, production facilities, heavy duty goods transportation trucks and even luxury buses.

It is fuel used by the middle class and car owners to drove around town and from city to city not to employ workers and produce goods and services. Diesel which is critical to manufacturing and employment creation is not subsidized as the subsidy was removed years ago by Obasanjo. Nigerians said nothing then because it was blue collar workers that got retrenched by factories.

Those speaking now on the internet and Facebook and twitter and newspapers are not workers but middle class elite who use PMS in their smart cars so let's stop all the ideological pretense. This is not about elite and masses but an intra-elite discourse.

I will summarize the issues and I write as a Nigerian economist and public intellectual not as a public servant:

1. I am a strong advocate for subsidies if they are for production and not consumption, and if they benefit the poor and not middle men and rent seekers. The US government subsidizes cotton and wheat farmers and Nigeria spends its reserves importing wheat from America and keeping American farmers employed. The OECD countries pay subsidies to cattle farmers. Today Promasidor imports powdered milk from New Zealand and packages in Nigeria using our foreign exchange while we have cattle. WAMCO imports milk from the UK and adds water and tins it and calls it "production" of Peak milk. We use our Forex to import petroleum products and keep refineries and jobs open in Europe. Meanwhile precisely because of market distortions there can be no private sector investment in refineries since no one can make profit selling at the regulated price unless we are going to provide private refineries with crude for next to nothing. Certainly no one can purchase crude at market price, refine it and sell at N65 without huge losses so this explains why there are no private refineries.

2. what I mention above is at the heart of the problem with government economic policy which needs to be changed. The economy since SAP is one that supports imported consumption and not local production, perpetuating dependency, non inclusive growth and insecurity. Why is it that the economy is growing at 7pct annually but the people are getting poorer. Because growth gains are not evenly distributed. Personal income is skewed towards people in the oil industry, telecoms, high finance, stock market, real estate and yes civil servants and politicians who feed on corruption. We produce crude oil but import petroleum products (today the UK's highest exports to Nigeria are petroleum products). We have a large cotton belt but import textiles from china (thus keeping their subsidized factories open and jobs in china). We are the world's number 1 producer of cassava but import cassava starch from Europe. We have a huge tomato belt in kadawa, jigawa and chad basin but are the world's largest importer of tomato paste-from China and Italy. We can produce rice but we import rice from Thailand and India-most of it from grain reserves that have been in stock for over 5 years.

3. If above is clear then it is evident that this trajectory can only lead to disaster. We will continue to spend our resources promoting growth and employment in our trading partners. Terms of trade shift against us, we can only have foreign reserves because by the good grace of God we have Oil which will be exhausted soon and with new discoveries may become so cheap it loses value. We don't create any value added jobs as the only real production is peasant farming. Oil, telecoms, finance and real estate are not employment intensive. So everyone becomes a civil servant as the economy cannot create jobs. Result? In 2012 budget out of a total N1.8tr recurrent expenditure for the executive arm N1.6tr is on personnel costs not overheads. To reduce this you have to cut salaries or pensions or retrench civil servants. This is the classic trajectory of underdevelopment, De-development and De-industrialization.

4. For the above reasons I am a strong proponent of structural reform and this begins from the fiscal framework. The limited resources of government should be allocated to supporting production-especially if we are running a budget deficit. We cannot keep borrowing to support conspicuous consumption. To support a job creating economy we need to fund power, transportation infrastructure, market infrastructure and access, technical and vocational education etc. We need to build rice processing plants, produce starch and cassava flour and ethanol, process our tomato and milk locally, regenerate our textiles firms (which used to employ 600,000 workers but now employ 30,000!), refine our own crude etc. We cannot even begin to do this if 30pct of govt expenditure is on fuel subsidy, if out of the balance 70pct is recurrent spending, 10pct is debt service, 10pct goes to the Niger delta and only 10pct is capital expenditure. So it is about a choice-what do we spend money on and how do we allocate resources?

5. We often compare ourselves to other oil producing countries like Saudi Arabia. What are the facts? With a population of over 160m we produce 2mbpd ie 1 barrel for every 80+ citizens daily. Govt share of revenues if like 50pct of every barrel so it is effectively a barrel for 160 citizens. Saudi Arabia with a 24m population produces over 8mbpd or one barrel for every 3 citizens. In fact in 2010 the nearest OPEC country to Nigeria in production per capita was Algeria with a barrel for 30 and Algeria is more gas than oil.

With one barrel for 3 citizens daily Saudi Arabia is able to provide infrastructure, education, healthcare and social safety nets and have huge savings. It can provide subsidized fuel at a total cost that is a fraction of its savings and even export refined products. It is paying for subsidies our od its fiscal savings and not borrowing to pay. We are like a poor man with a rich neighbor. The neighbor builds a good house, buys several cars, eat expensive food, travel abroad every year and still have huge balances in several current accounts. Then you choose to live that lifestyle and mortgage your house, take an overdraft from the bank to finance it. Next year it is time to repay the bank, u don't have the money so u go to another bank, borrow enough to pay the first bank principal plus interest and also fund the continuation of the lifestyle. It continues till u can't borrow anymore and the bank throws u and your family out of your house and you everything.

A responsible father would have long since faced reality and told his family he doesn't earn as much as his neighbor and expectations need to be moderated if they to keep their roof. Of course the children won't be happy at not going to Hawaii for summer and having to take public transport rather than own cars like their neighbor's children. Maybe they will even abuse the father behind his back and call him a miser. That is the cost of leadership.

Finally: removing subsidy is not a silver bullet that solves our economic problems. And there is a huge trust deficit that government has to address. Government needs to investigate subsidy payments and punish any violations of extant guidelines. It needs to cut on unnecessary and wasteful expenditure. It needs to fight corruption and show seriousness in that. It needs to deliver on capital projects, power and infrastructure including irrigation, farm-level storage and agri-processing. These are all valid issues that are to be taken IN ADDITION to and not in place of subsidy removal.

Since someone has decided to make insinuations about my grandfather I owe it to him to defend his record. it was my grandfather as emir that repealed an obnoxious rule started from the days of Emir Usman that disenfranchised women from inheriting property. It was Sanusi that built the groundnut pyramids to the point where Kano NA was contributing 40pct of the revenues of the northern region. It was emir Sanusi who built the Bompai Industrial Estate, and turned Kano into the industrial nerve center of the north. He was acting governor of the northern region, minister for pilgrim affairs, chief Imam of Friday mosque, judge and leader of the Tijjaniya order. As for his "descendants" my father was one of the very first batch of 12 Nigerians recruited by the British to set up the foreign service in 1957 and he remained in public service and rose to be permanent secretary before retirement. He set up in the 60s the research dept of the ministry- the present NIA so he was the first external intelligence officer in Nigeria. As permanent secretary he was the architect of Murtala Mohammed's policy on decolonization of Africa and oversaw the independence of Mozambique and Angola and the final push to liberate Zimbabwe and South Africa.

So yes Sanusi was not perfect. He was a feudal aristocrat. And my father was not perfect. He was also a prince and privileged to go to Oxford and LSE. But please if you want to abuse my grandfather and father kindly tell us what contributions your own grandfather and father made to the people.

Sanusi Lamido Sanusi is the governor of Nigeria's Central Bank

Na beans?

So here is my question. How much money was spent on refurbishing the refineries? Can they publicly tell us how much was spent to do this? I bet the outcome will surprise everyone. I am pretty confident that what was spent in refurbishing the old ones would be more than building a new refinery. Too bad Nigeria. It is time we started to question excessive spending on public projects