₦airaland Forum

Fixing the refineries would've caused a reduction in price over time because the government will have better insight on how much petrol Nigerians consume and can properly subsidy the cost of refining if the local refineries are working. You see commodities like petrol is key to the economy because it has a direct impact on Nigeria's manufacturing and production sector, it has to be subsidized to ensure stability in critical sectors of the economy. Fixing the existing refineries or building new ones through PPP (Public Private Partnership) will also encourage competition which will drive the price of petrol down overtime.....

nairalanda1:
Fixing the refineries won't have caused a reduction in price by much. (Some say N70).

The refineries still have to be maintained, and repaired and kept in good working order, and they still have to pay workers at competitive rates. Guess what, we still have to import components for the refineries from abroad, then they have to pay taxes, and pay for community projects.

And all that costs money.

Fuel isn't cheap. Niger, Ghana refine fuel from domestic crude, and fuel costs above N800 in both countries.

In my opinion, no system of government is perfect but what makes the difference is the character of the people running the government. Where injustice prevails there will be no progress.... What Nigerians need is a revolution of the mind, no matter the system of government we practice if we can't purge ourselves of hate, tribalism, nepotism, corruption and religious fanatisim nothing will change....

marlow1962:
Democracy is a scam brought by the west to siphon the natural resources Nigeria has.
When each region in the zoo was being governed by their obis,obas,emirs etc, the zoo was progressing until the white came with their fishy and cunny democracy.

You will surely regret your utterance for supporting evil and injustice..... I am certain you're already..... Except you're buying fuel for N185 per litre..... This is how we continue to destroy our country and future over sentiments and tribalism..... I hope one day we will learn from our mistakes before it is too late....

demmie1:
of course like you, illegitimate child. You better go and die

Yes Nigeria today is a mess there are few people in government are above the low. It is sad....

Web2020:
If the injustice going on in Nigeria is not addressed, what will happen to Nigeria will shock the entire world. Injustice should be condemned by all. Quick examples of injustice are:
1. The head of Igbos was arrested for saying if the government cannot guarantee their protection, they will find a way to protect themselves while the like of Oluomo and Oba of Lagos is still working around free.

2. Nandi Kanu is still in detention illegally because he speaks the truth to the government about why the likes of Asari that openly form a militia group are still working as a free man.
It goes on and on.

It is a matter of time, injustice does not guarantee a good result. You may be thinking that you are successful in it, but o

Those who rigged the last presidential election including Tinubu are the one's benefiting from corruption. Tinubu is only lying to Nigerians on the issue of fighting corruption. No one is fighting back since it is obvious he made a deal with Buhari and his looting cronies not to probe them.

The Fuel subsidy removal policy is a terrible mistake, it will continue to be until it is reversed. Every country's government provides some kind of subsidy to it's citizen. If Tinubu really cared about fixing the economy why not fix or build atleast one refinery before removing subsidy. Also if fuel subsidy must be removed, why didn't his government make provision for palliatives before removing it.

I hope that the presidential election tribunal will do the needful and rewrite the wrong made by INEC's Mahmood. Nigeria's economy can not afford another 4 years of this disastrous APC party and Tinubu as president....

On 28 July 2023, the head of Niger’s presidential guard, General Abdourahamane Tchiani, declared himself head of state after the military seized power. Though Niger has recently enjoyed its longest democratic rule since independence, there has been a constant threat of coups. For example, when ousted president Bazoum was elected in 2021, there was a coup attempt about 48 hours before his inauguration. It failed as presidential guards fought off the coup plotters. ThIs coup attempt exposed deep fissures in the country and showed that the military had not fully embraced democracy. This is why it is not surprising that coup was carried out again by the military in 2023. This time around, the current coup plotters have blamed rising insecurity and a lack of economic growth as the underlying reason for toppling the civilian government. They stated that the intervention was necessary to avoid “the gradual and inevitable demise” of the country (A similar situation Nigerians are facing today). There are no doubts that the rise in insecurity and declining economic prospects contributed immensely to the country's fragility.

Despite the increase in foreign military forces, especially from the US and France military bases in Niger, the leadership has been unable to stop insurgent attacks. There are several insurgent groups, such as Al-Qaeda and Islamic State affiliates, as well as Boko Haram operating in the country.

These attacks have resulted in thousands of deaths and displacements in the last decade so it was not surprising that hundreds of Niger youths in the capital, Niamey, gathered to celebrate the July coup, waving Russian flags and chanting “Wagner”. This suggests that some people in Niger believe the military, supported by Russia and the private military contractor, Wagner group, would do a better job of fighting insurgents and restoring peace in their country.

In addition to insecurity and bad economy, there are other issues that led to the latest coup d’etat. These are: ethnic representation in government; the presence of foreign military forces; and the weakness of regional bodies.

Ethnicity: The debate over the ethnicity and legitimacy of Bazoum (Niger's President) was an issue during the last election campaign. Bazoum is from Niger’s ethnic Arab minority and has always been labelled as having foreign origins. This did not sit well within the military, which is predominantly composed of the larger ethnic groups even though Bazoum got about 56% of the vote and is from the same party as former president Mahamadou Issoufou. There is a lot of emphasis on ethnic military composition in the country; understanding this helped Issoufou complete two terms as president. Appointments in the military are made along ethnic lines.

Foreign Military Forces: The large number of foreign military troops and bases in the country has not been well received by Niger's military. The military chiefs believe this undermines them and their country's sovereignty. Niger is a key ally of western countries in the fight against insurgency in the region. France’s huge investments in Niger’s mining sector are another reason for its interest in the country's security.

In 2019, the US opened a drone base in Niger despite protests from Nigeriens. The drone base could make Niger a target for terrorists and increase instability.

In 2022, France and other European allies withdrew their forces from neighbouring Mali. President Bazoum was quick to invite them to Niger. The Nigerien military leadership and some influential individuals in the country denounced the increase in foreign military forces.

Weak Regional Bodies: The failure of regional organisations such as ECOWAS and the African Union (AU) to take a firm stance against military power seizures in Guinea, Burkina Faso and Mali emboldened the Nigerien military. ECOWAS leaders have now threathened to use force to restore Bazoum if the coup plotters do not reinstate him.

In the last four years, there have been seven coup d’etats in the region. Three were successful. Leaders of ECOWAS and the African Union have threatened sanctions on these three countries, but nothing much has been done to deter other opportunistic military leaders. This creates an impression that there is no deterrence for military takeovers.

Niger Military Coup Implications

The latest coup d’etat has severe consequences for Niger and the entire Sahel region. Efforts to address these issues will be affected. And the new military leaders will want to use these issues as leverage in negotiations and to force acceptance of the new regime.

The new leaders in Niger might also engage with the Wagner group to combat the Islamist insurgency. The leader of the group has already praised them for seizing power. The influence of Russia and Wagner in the region could grow.

Finally, a successful military takeover in Niger would be a major drawback for democracy in the region and Africa as a whole. The military regimes of Guinea, Mali and Burkina Faso already plan to form a “military alliance” with Niger to combat insecurity.

Bottom line, African leaders need to do more to curb corruption and misappropriation of public funds. They must prove that they are working for their people. If nothing is done to address the growing desperation, insecurity, hopelessness and devastating economic situation, Nigeria will be next!

If you still think that NASA and government is not lying to you, feel free to share your opinion….

Watch the video below


https://www.youtube.com/watch?v=lR7XTha3rYQ


https://www.youtube.com/watch?v=CMzZrQc_eXI

This initiative is commendable but in my opinion there is no need to convert vehicles to gas as PMS can be produced locally instead creating these workshops why not start modular refineries. I still wonder how safe is it to drive vehicles powered by CNG....

It is unfortunate to see Nigerians ready to collect bribe and support their evil oppressors! Even as they are about to be crushed by draconian economic policies...

What Nigerians spend their money on doesn't affect the price of fuel as fuel is an imported product which can be produced locally. In my post I advocated for the immediate establishment of modular refineries as a way to combat the current economic situation in the country. Modular refinery is the fastest and easiest option requiring less capital to reduce Nigeria's dependence on importation and combat unemployment. I understand that the point you're trying to make which is that if Nigerians cut down on spending they can afford N600 per litre fuel but Nigerians are not supposed to buy fuel at over N600 per litre in the first place if Buhari's government did the right thing by fixing or building new refineries within the last 8 years. It's unfortunate that APC government succeeded in further destroying Nigeria's economy. I hope that the presidential election tribunal will do the needful and rewrite the wrong made by INEC's Mahmood. Nigeria's economy can not afford another 4 years of this disastrous APC party and Tinubu as president....

helinues:
That's the bitter truth reasonable number of Nigerians don't want to hear.

We work mostly to have money to pay our bills and do projects, do we make that money yes we do, depends on level, but do we have value for what we spend most of the money on?

On average of one church/mosque is erected daily in Nigeria yet the rate of crime is increasing, abeg who have they been preaching to?

What kind of comment is this? Hellinues you are proud that million of litres of petrol was imported and how is it "Free for all marketers..."?

You said "Can Nigerians afford it? Of course yes, that's only if we stop wasting money on parties, religion and unnecessary things." what a pathetic statement.... Wow

helinues:
Now that some millions of litres have arrived to the country, free for all from the marketers would fall the price. It's just a matter of time .

Is the N600 fuel price high? Of course yes it's high

Can Nigerians afford it? Of course yes, that's only if we stop wasting money on parties, religion and unnecessary things.

It is no longer news that Nigeria's downstream petroleum sector has been deregulated and fuel subsidy removed. As a result of this, we have seen the devastating effect on our economy with astronomical rise in prices of food, transport and services. The economy has nose-dived and Nigerians are now at the mercy of "Market Forces" influenced by corrupt oil marketers and their cronies responsible for importing petroleum products into the country. It is also no longer news that more and more Nigerians are giving up and are desperately seeking to relocate to other countries as a means of escape. To them, Nigeria is dead and there is no hope of redemption as the economy continues to take a negative turn.

It is imperative to note that before the 2023 presidential election I was amazed to see many Nigerians trooping out to support APC after Buhari's hellish 8 year rule. I warned these people jubilating and supporting Tinubu and continuation of APC's evil government about the consequences that they will regret. We saw how these evil ruling APC party and it's politicians unleashed a tribal propaganda that engulfed the nation and divided Nigerians against each other (Especially Yoruba Vs Igbo). Instead of seeking to ensure that we elect leaders based on a merit system, we ended up fighting each other over tribal sentiments to the point that even this online forum "Nairaland" was not spared as it has been weaponised to continue the carnage.

With all said and done, Tinubu's APC "won" (Rigged) the presidential election and today live has literally now become unbearable for many Nigerians. Tinubu's draconian approach to governance and his brutal action of removing fuel subsidy was a major turning point and central to the current hardship experienced by many. The fact that maintaining fuel subsidy was costly is one thing but removing it without any palliative measures was callous by Tinubu. This action should be a clear indicator to any reasonable person that Tinubu has no regards for Nigerians. It is important to note that government policies should not always be based on political expediency especially when it comes to delicate issues like fuel subsidy which is central to the economy and seem to be the only thing Nigerians enjoyed from government.

Now that subsidy has been removed, what is the way forward as Nigeria's economy is on a rapid decline on all indices. I believe that now is the time to declare a state of emergency on local refining of petrol! If we must salvage Nigeria's economy then Nigerians must canvass for the immediate setup and activation of modular refineries across the 36 states of the federation. You may ask what is a modular refinary? A modular refinery is a simplified refinery requiring significantly less capital investment than traditional full-scale refinery facilities. These are small capacity refineries that can produce diesel, kerosene and petrol in moderate quantities. Nigeria's economy can not survive on it's current path of importing petroleum products. With subsidy removed, the government has only succeeded in passing the cost of importation to the Nigerian people and this is callous, evil and shows how irresponsible Tinubu's government is. Let the Nigerian people, labour unions and pressure groups as a matter of urgency begin the campaign to pressurise the government to come up with policies and programs that will foster the immediate setup of modular refineries to avert the imminent collapse of Nigeria's economy. If nothing is done to stop the current trend, petrol will sell for N1000 per litre before the end of this year!

Another Bill Gates vaccination project loading..... When it was announced that CEO of GAVI Mohammed Pate was stepping down to take up Health minister under Tinubu government what do you expect.... COVID 19 scam continues everyone should be careful....

Instead of restricting users from accessing their money why not add some kind of 2FA system

yommen:
Unfortunately, your points don't count. The system doesn't even exist in Nigeria yet and if it starts, a lot of people will lose their hard-earned money if the type of restriction the government is putting into place is not introduced. Fraudsters will make easier money and make more people cry.

Before the 2023 presidential election, I warned Nigerians about the consequences of allowing Tinubu and APC's evil government to continue, many in this forum didn't listen but continue to support the evil government. This new policy is not so different from policies under Emefiele that led to the current economic disastrous situation we are facing today. Until Nigerians decide to overlook tribe, religion and fight these evil leaders things may get worse.... As it stands it is not getting better....

This policy just like the naira swap policy will violate people's right to spend and earn. It will further destroy Nigeria's economy....

Now we know why Bill Gates came to Nigeria.... it is glaring that with this announcement, Bill Gates has taken over Nigeria's health ministry..... If only Nigerians know how evil these people in power who we call leaders are.... Tinubu's evil government maybe worse than Buhari..... May the most high, almighty creator of heaven and earth intervene and save Nigeria..... For those who don't know GAVI was at the center of COVID-19 vaccine conspiracy, it is another Bill Gates tool see https://www.gavi.org/investing-gavi/funding/donor-profiles/bill-melinda-gates-foundation

Now we know why Bill Gates came to Nigeria.... If this is true then Bill Gates has taken over Nigeria's health ministry..... If only Nigerians know how evil these people in power who we call leaders are.... Tinubu's evil government maybe worse than Buhari..... May the most high, almighty creator of heaven and earth intervene and save Nigeria..... For those who don't know GAVI was at the center of COVID-19 vaccine conspiracy, it is another Bill Gates tool see https://www.gavi.org/investing-gavi/funding/donor-profiles/bill-melinda-gates-foundation

I agree Nigerians must rise above tribalism and religion....

mokset123:
it would only get better if we kill the division along ethnic, religious lines and greed in us. Nation first before self

You do have a point as critical sectors of the economy like local manufacturers and producers of agricultural exports (Forex inflows) are now adversely affected due to the volatility of FX "market forces"..... this policy will surely affect Nigeria's forex inflows negatively as these businesses that import or export "manufacturing machines and industrial raw materials" may no longer be able to compete in the international market.... It is sad that many Nigerians don't know how bad this policy will affect them....

CodeTemplar:
Free floating of the naira is like tying the excess demand of dollar emanating from toothpick, toothbrush, red oil iPhone and leisurely things importers generally to the demand of dollar for import of machines and industrial raw materials.

You merged the pressure of leisurely and luxurious driven consumption with critical aspects of the economy and say you are inspiring investors confidence. This was how the preceding disaster started justifying actions with abstract yardsticks and guaging people's heart and repentance level before crashing the whole system then blaming a CBN gov.

The govt again has failed in curtailing the corrupt practice of roundtriping of dollar from the lower exchange rate window meant for productive imports into black market meant for leisurely imports and as part of their addiction to buck-passing, have chosen the past CBN gov to blame.

It is glaring to any sane Nigerian that Tinubu is only doing the bidding of his international handlers (US, IMF, France et al). Ask yourself why is the US hypocritical government not pushing for democratic principles to be respected over the outcome of 2023 fraudulent presidential election that we all know Tinubu didn't win....Tinubu certainly will be a puppet to the western powers who have been pushing for Nigeria government to implement fuel subsidy removal and some other policies you seeing today.... APC was not the popular party before the election and still not the party sane progressive Nigerians want to see manage the affairs of the nation.... There is no doubt that these policies already is affecting Nigerians and the economy negatively....

mokset123:
Another price increase on fuel due to this devaluation is beckoning as we import our fuel, imagine people who source dollars at 461 to import fuel now source for dollar at 600 and above. Then it's effect on other goods and services hmm

It was revealed today that CBN directed Deposit Money Banks to remove the rate cap on the naira at the Investors and Exporters’ (I&E) Window of the foreign exchange market, to allow for a free float of the national currency against the dollar and other global currencies. The development came barely two weeks after Tinubu promised to unify the nation’s multiple exchange rates. Following the CBN announcement, the naira depreciated to over N700/dollar during trading on the I&E window today.

It is no longer news that Nigeria today is an import-dependent populous country with limited sources of foreign exchange. Since Nigeria economy majorly is import driven, the implication is that the demand for foreign exchange will always be higher than the supply. Under such circumstances, it is certain that allowing a free-float of the naira will have a negative impact on the currency, leading to poor exchange rate and inflation. While the inflation will impoverish the masses and lead to low demand for goods and services, the low Naira value will not lead to higher inflow of foreign currencies due to other factors such as security challenges, corruption, lack of electricity and other infrastructure deficits will limit the readiness of foreign investors to rush to Nigeria with euros and dollars. Above all, the country will pay more to service her dollar and euro-domiciled foreign loans.

It is important to note that many developed countries don't allow a free-float of their currencies, rather, they use a combination of fiscal and monetary polices to control the exchange rate. For example, EU raises interest rates to combat inflation as against euro currency. After the EU central bank increased interest rates, the euro strengthened. Nigeria has no access to such instruments. This move by CBN and Tinubu's APC government to free-float the naira will be another economic disaster (Post-Buhari era) if not properly managed.

The bottom line is that with the ill-advised free-float of the naira, inflation will increase, the people will be poorer and jobs will be lost. The government should have put in place moderate control mechanism before adopting a free-float of the currency, unfortunately this is Tinubu's style of dishing out sensitive policies without proper planning as we all witnessed how he removed fuel subsidy during the presidential swearing-in ceremony. As I said in previous post, the illegitimate Tinubu's APC government can not be trusted to offer any meaningful economic progress to Nigeria. This APC government definitely will continue the economic woes that plagued Buhari's era. Nigerians who think that Tinubu will be different from Buhari are only been sentimental and naive to their own detriment. The person occupying the office of the president may be different but this is still the same APC government that brought Nigeria to it's current economic sad state. Even Tinubu told Nigerians that "he will continue from where Buhari stopped", it is foolish to expect anything different from his government. Nigerians must reject these ANTI-PEOPLE policies!

Yes that is why we can't trust another APC government regarding how fund recovered from subsidy will be used. Nigerians must reject sudden fuel subsidy removal by Tinubu....

Standing5:
There has been no major improvement on areas affected by petrol prices like power, transport or agriculture.

As I said there have been several fuel subsidy litigations that exposed massive graft by both government officials and private actors in the petroleum industry. If truly we don't have money to fund subsidy the government if sincere can go after these cases and start to recover looted funds siphoned as subsidy payouts to "Oil Marketers" through NNPC and other government agencies in the petroleum sector.... As I said in previous post the government is only deceiving Nigerians and don't want to do the hard work.... we simply can't trust APC government.....

nairalanda1:
Yes, I think the government lacks integ myself.

But the truth is, we have reached a point of no return.

If we keep the subsidy, we would run out of money. Literally run out of money.

Good afternoon.

You said "....EVEN if there is a TRANSPARENT SUBSIDY REGIME....the more the difference between the cost of production and the subsidzed price of petrol grows" I disagree because a transparent subsidy regime will expose the monumental corruption that has plagued the sector for years. As long as we can not establish with fact the actual amount of fuel Nigerians consume on a daily or monthly basis we are only borrowing to fund a corrupt system. Since the government of the day doesn't want to do the hard work of regulating the sector or establishing the truth as regards fuel consumption and cost (Oil Marketers Subsidy Payouts) if the subsidy is removed it won't be surprising that we may still borrow to fund the Subsidy Reinvestment and Empowerment Programme (SURE-P) once it is removed (The same mismanagement and corruption that plagued the fuel subsidy payment regime will also affect SURE-P).... Tinubu's APC government lacks the integrity to handle such a delicate policy like removal of subsidy... Nigerians must reject the sudden removal of fuel subsidy by Tinubu....

nairalanda1:
Oga, the issue is, I am not answering your question because EVEN if there is a TRANSPARENT SUBSIDY REGIME....the more the difference bettwen the cost of production and the subsidzed price of petrol grows, the more the cost of the subsidy.

And the more our consumption grows...because of our growing populaiton and growing needs for power , the more the cost of the subsidy.

The corruption and lack of transparency makes a bad matter worse.


And as subsidy grows, we would take money from other parts of the budget.....until we reach a point where our entire revenue and budget would be going for subsidy.

And here is the harsh truth...we have long since reached that point.

And we were, as someone has said here, already BORROWING to pay for the subsidy directly.

You see the problem.

You still have not answered the question why can't government run a transparent subsidy payment regime? How much does Nigerians consume as fuel on a monthly basis? Do marketers inflate subsidy claims? Are they overpaid by Nigerian government? These questions must be answered before we can boldly say that subsidy should be removed or not.... Whatever that is eating our revenue will continue to do so even if subsidy is removed.... We must analyse underlying issues of corruption in the petroleum sector just as the OP said "...you have to understand that these oil cabals would get their money anyway either from the subsidy or from 700 per litre petrol prices, the oil cabals would get their money." removing fuel subsidy remains a cosmetic approach to the issue and it won't benefit Nigerians....

nairalanda1:
Whereas if we kept the subsidy, the deficit in the budget from keeping it would have grown and eaten our revenue...and then made us borrow more and more.

The subsidy had to go. If we kept it, we would have been in more and more debt.

Removing subsidy without removing the fraudsters is akin to throwing the baby out with the bathwater. As long as the fraudsters in government are still in charge, fund realised from subsidy removal will be mismanaged and stolen! The problem is not subsidy but our corrupt government officials.... Nothing will change until we purge the system.....

motayoayinde:
YOU DO HAVE A POINT.
HOWEVER, THE TERRIBLE FRAUD THAT THE OIL SUBSIDY HAS BECOME IN NIGERIA IS ABOUT TO KILL US.

IT HAS TO GO

Can NNPC or oil marketers defend the figures purported to be the cost of fuel subsidy and amount of fuel consumed by Nigerians? Of course they can't justify the astronomical rise in subsidy payments if probed by a serious government.... Again, why must Nigerians pay for the mismanagement, looting, corruption and wrong decisions of our leaders? If the APC government was serious about fuel subsidy payments why didn't they build a new refinery within the last 8 years? Also there have been several petroleum subsidy litigations during this period that exposed massive graft by both government officials and private participants in the petroleum industry, why did our anti-graft agencies and committees fail to conclude investigations and prosecute these litigations? The truth is that removing subsidy which to me is a cosmetic approach to solving the underlying issues will only make our current economic situation worse as you can already see what is happening today..... You said that "....So, unless you want us to pay tax rates of 20-40% as they do in the UK....we cannot afford subsidy. And even if we cut cost of governance, at best it would bring in 1-2 trillion naira. At best. Subsidy costs this year have passed 3 trillion naira. And the year is not over." UK has a strong system of checks and balances to curtail stealing and abuse of public funds so you can't compare that to Nigeria. The main reason for the huge increases in subsidy payouts is simply corruption and greed by NNPC, politicians and marketers.... I believe that a serious government that is willing to establish a transparent fuel subsidy payment regime can address these issues without removing subsidy. Above all a serious government must as a matter of urgency build modular refineries and create innovative empowerment programs that will help key players in the Nigerian upstream petroleum sector to reduce cost and encourage local refining....

nairalanda1:
To the OP

First the welfare package the UK citizens get is paid for from heavy taxation. If we imposed UK tax rates on Nigerians, you and your pals will shout that government is oppressing us.

Second the problem with fuel subsidy is that its cost has been increasing year in and year out. As a result, the money to pay for subsidy ....which comes from oil revenue, not from tax, is running out. Last year, we were borrowing to pay for subsidy directly. This year, subsidy costs were set to surpass what we paid last year.

At some point, if we continued with the subsidy, Nigeria would have run out of money completely. Meaning no money to pay for salaries, no money for projects, nothing.

Plus, we lose billions to smuggling of fuel, and millions again to false subsidy claims, stealing and corruption. On top of the losses from subsidy.

The truth is, we should have removed this subsidy since 1993, if not earlier. We did not, and here we are. We have no money to give for subsidy anymore.

So, unless you want us to pay tax rates of 20-40% as they do in the UK....we cannot afford subsidy. And even if we cut cost of governance, at best it would bring in 1-2 trillion naira. At best. Subsidy costs this year have passed 3 trillion naira. And the year is not over.

So, oga, e get why.

Yes Sowore is right, Osinbajo did nothing to make Nigeria better. In 2019, when Buhari subverted the constitution and removed Onnoghen the Chief Justice of Nigeria see https://www.premiumtimesng.com/news/headlines/307973-what-the-law-says-on-removal-of-chief-justice-of-nigeria.html, what did Osinbajo (Professor of law ) do? He did nothing and kept quiet! Osinbajo was purported to be a man of God and a pastor before he joined APC and became Nigeria's vice president. After 8 years of overseeing one of the worst government in the history of Nigeria I wonder why Nigerians will defend him on social media.... Many Nigerians are naive....

Yes Fuel subsidy seem to be the only government policy that Nigerians enjoyed economically over the years. Removing it without building modular refineries or supplementary programs will exacerbate the economic situation of the country.... It is indeed sad that there are many people on Nairaland applauding Tinubu's illegitimate APC government for removing it. By this time next week if nothing is done I wonder how much a mudu of rice or garri will be in the market.... I am of the opinion that the failure of EFCC, ICPC and other anti graft agencies/committees to conclude investigations and prosecute litigations of crimes committed through NNPC is a major reason why fuel subsidy payments spiralled out of control see https://www.nairaland.com/7712067/nigerias-fuel-subsidy-nnpc-crime

The fuel subsidy scheme is not the problem, the issue here is mismanagement, corruption and looting by NNPC officials, politicians and oil marketers!

Fuel subsidy seem to be the only government policy that Nigerians enjoyed economically over the years. Removing it without building modular refineries or supplementary programs will exacerbate the economic situation of the country..... NNPC/NNPCL must be probed and held accountable for it's crimes under the fuel subsidy payment regime....

IGBOGENE27:
Nigeria my country.

What is government subsidy? Government Subsidy is simply the transfer of economic resources by government to consumers or producers of a good or service. The resultant incentive is to reduce cost of production and boost consumption of the commodity.

The Nigerian government introduced an oil subsidy to cushion the effect of rising global oil prices in the 1970s. The Obasanjo military regime formalised the subsidy in 1977 when it introduced the Price Control Act which regulated prices of items including fuel. Since the introduction of fuel subsidy, there have been deliberate sabotage of Nigeria's refineries by successive governments. Today, government public officials and their cronies (Oil Marketers) have turned the fuel subsidy scheme into a conduit pipe for looting our common wealth.

Many economic experts are of the opinion that subsidies distort markets and discourage investments. Some have argued that subsidies exist where government fails to implement programs to internalise uncontrolled costs in energy markets. Others argue that government regulation creates a subsidy when it fails to set fuel prices equal to the marginal cost of production.

When it comes to fuel pricing in Nigeria, politics and corruption trumps economics. According to the Natural Resource Institute, an independent, non-profit organisation, Domestic Crude Allocation, DCA, has become the engine of waste and revenue loss to Nigeria. The Nigerian Government allocates about 445,000 barrel of crude per day to the NNPC, which it in turn sells to derive revenue.

The DCA allocation spent by NNPC delivers poor value for money. A large portion of NNPC’s withholding is spent on fuel subsidy payments, which are vulnerable to misappropriation and excessive looting by government officials. KPMG, the global audit firm, for example, found that in three years, NNPC paid itself roughly $6.6 billion to fund the subsidy on 15.6 billion litres of products that “apparently were not available to the Nigerian market”.

It is instructive to note that previous investigations by government and several petroleum subsidy litigations before our courts have further exposed massive graft by both government officials and private participants in the petroleum industry. Take for example, the Mallam Ribadu’s Petroleum Revenue Special Task Force Report indicated that NNPC withheld N1.983 trillion subsidies between 2006 and 2011. This amount represents almost 40 percent of the 2016 national budget.

Also, the Farouk Lawal led House of Representatives Ad hoc Committee on Subsidy Verification concluded that the subsidy regime, as operated between 2009 and 2011, was laden with colossal corruption and entrenched inefficiency. Simply put, the subsidy claims made were not for consumed fuel!

The committee went on to state that contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant General of the Federation put forward a figure of N1.6 trillion, the Central Bank of Nigeria (CBN) stated N1.7 trillion, while the committee established subsidy payment of N2,587.087 trillion as at December 31, 2011, amounting to more than 900 percent over the appropriated sum of N245 billion.

Also, a subsequent report by the Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments, led by Mr. Aigboje Aig-Imoukhuede, revealed that in 2011, 197 subsidy transactions worth N232 billion were illegitimate. Previously released Forensic Audit of NNPC by Price Waterhouse Coopers showed that fuel subsidy cost Nigeria almost $10 billion between January 2012 and July 2013.

It is incredible that over the years, fuel subsidy has been two and five times the size of the federal education budget and up to seven times the health budget. In February 2014, the CBN informed the Senate Finance Committee that NNPC needed to account for $20 billion, as CBN could only confirm receipt of $47 billion out of the $67 billion revenue between 2012 and July 2013. NNPC in it's defence to the Senate Committee on Finance made a vague submission that almost half of this non-remittance funds were used for subsidy claims on imports of Premium Motor Spirit, PMS, and Dual Purpose Kerosine, DPK.

The Nigeria Extractive Industries Transparency Initiative, NEITI, independent audit report stated that, over N13.697 trillion ($74.3862 million) has been paid as subsidy to marketers from 2005-2012. The breakdown of the subsidy shows that N2.197 billion was paid as subsidy in 2006. This rose to N236.64 billion in 2007 and N360.1 billion in 2008. In 2009 the country paid N198.1 billion as subsidy for petroleum products and in 2010 the subsidy payment rose to N416.45 billion.

The payments ballooned to N1.9 trillion in 2011. Payments of oil subsidies for 2022 ballooned again to $10 billion. Recent figure released by NNPC stated that it is owed N2.8 trillion ($6.1 billion) in outstanding subsidies payment by government. And that it is spending N400 billion ($867 million) monthly on subsidising petrol prices.

Again, the amount paid out on subsidies from 2005 to 2021 is equivalent to the entire budget for health, education, agriculture, and defense in the last five years. The sum also equals the capital expenditure for 10 years between 2011 and 2020. Subsidy payment reached its peak in 2011 ($ 13.52 billion or N2.11 trillion). It is true that removal of subsidy will free allocations which can be channelled to the provision of infrastructure like roads, education, health service, power, security, creation of jobs, development of the downstream sector, improve our GDP growth, foreign exchange shortages and provision of basic benefits for the “poor in the society” but since fuel subsidy payments skyrocketed mainly as a result of monumental corruption and greed of NNPC officials, politicians and marketers, removing subsidy will only create a new looting channel for these rogues and won't achieve any economic benefits. I am of the opinion that the failure of EFCC, ICPC and other anti graft agencies/committees to conclude investigations and prosecute litigations of crimes committed through NNPC is a major reason why fuel subsidy payments spiralled out of control. It is obvious, NNPC can not defend the huge daily / monthly fuel subsidy payouts it receives from government.

It is imperative to note that the fuel subsidy scheme failed to help Nigerians buy refined products at much lower than the prevailing market price because of monumental corruption by NNPC officials, politicians and oil marketers. The fuel subsidy scheme is not the problem, the issue here is corruption and looting supervised by our politicians. Even if subsidy is removed today, it still doesn't solve the underlying problem as funds realised will still be embezzled and mismanaged. To make any meaningful progress, NNPC/NNPC Limited must be held to account for it's crimes under the subsidy payment regime. Removing subsidy without resolving the underlying issues why it failed is a futile effort that will yield no meaningful fundamental economic benefit. If fuel subsidy must be removed, a serious government must confront mismanagement, invest in modular refineries and strengthen the independence of our anti-graft agencies. With the recent price hike of petrol from N185 to N700 per litre over alleged sudden removal of fuel subsidy, I fear that Tinubu's illegitimate APC government will do more harm than good to the Nigerian economy.