₦airaland Forum

Could it be that NNPC leadership are the culprit frustrating the PIB, therefore not allowing it to scale through the House. They have so much to loose, if the PIB ever get passed by the house. Could it be that they are scared of their dirty secrets being revealed. They will have to be more transparent in their dealings which might crippled their source of money making avenues. For example, if the bill ever passed, and NNPC becomes a public company, I bet they would have been forced to release the audit report that was orchestrated by Aganga last year.

In the past and till date, we're made to believe that the primary reason why the bill is still stalling is because of foreign interest.

Imagine this loan scaling through; the interest rate, terms and tenor will be so ridiculous all on the basis of no accountability, transparency, economic risk and political risk. Damn, this is just so frustrating thinking about it.

This is a great move.

Why are all these political pen robbers in the North not amputated? I thought they have Sharia system in place

"The greatest punishment to the wise who refuse to rule, is to suffer the ruling of idiots"

if government can educate, develop its middle class; Nigeria and Nigerians will be a force to be reckoned with just like China and India

what happened to this project?

Anybody

This is a good move by the CBN. I think the Yuan has only one way to go, and that is up. This is predicated on the continuous pressure mounted on the Chinese by the world super power to appreciate their currency. Based on the believe that their currency lacks fundamental, and needs not to be manipulated. The value of the Yuan should reflect their continuous current account surplus, and growth.

I totally support deregulation.

As long as the government continue to subsidies petroleum products, there will never be any form of progress in that sector. Progress in the form of foreign and local investment, innovation, research and development will continue to take back seat. Nobody will invest sizable amount of borrowed money in that sector considering the risk of government involvement and monopoly. Even if they did invest, it will always based on short term thinking.

For example; in the past 15-25 (not sure how long) years that we've been practicing this model, what is our growth rate or should i say deceleration rate? What are the economic benefits of practicing this model. What are the returns of these subsidies to our economy? We have to be pragmatic enough to look at the facts, and make radical decision for the progress of our economy. People should not judge and condemn decisions based on its demerits alone. Lets look at the facts objectively based on our current problems and how to salvage those problems.

So, why not remove it completely so that;

1 Investors (both foreign and local) can have a good economic template as a basis for their investment.
2 The industry can contribute its own employment quota to the system in comparison to what it currently generates.
3 The industry can generate effective revenue as taxes to the government for further development
4 This deregulation will also contribute to our export operation, which will help strengthen our currency and boost our GDP tremendously.


Yes, I understand that it will bring pain and suffering on the poor citizens, but for how long? it will come with a lot of sacrifice, but a necessary one indeed if we want to progress.

Krucifax:
Any one here clamouring for a removal of fuel subsidies has it dangerously wrong!!!! Why? Simple.

1. A removal of fuel subsidy will throw millions of Nigerians into poverty overnight.

2. A removal of fuel subsidy will throw many businesses into administration overnight.

3. A removal of fuel subsidy will make millions unemployed overnight.

Elaboration: Fuel subsidy ensures the average Nigerian is able to access goods and services at reasonably(ish) affordable prices.

                   Fuel subsidies are important to help neutralise wealth inequality with bigger economies because imported fuel is traded at international
                   bench mark prices. I bought fuel in South London a couple of weeks ago @ £1.70 a litre that same litre i bought in Abuja @ N65 a litre.  
                   Incase  you are wondering the black market exchange rate is N272 to a £1.
                   So if your fuel is not subsidised and you purchase at the international retail rate you'll be paying upwards of N400 a litre.

Significance: An absence of subsidies means a significant increase of prices from a loaf of bread,to a bus ride. In simple terms life will get real hard!!!

I disagree with your conclusion and i think your analysis is overly exaggerated.

Removal of subsidies will not throw millions of Nigeria into poverty, it will not mess up people's business as being speculated and it definitely will not render millions unemployed.

First of all; if fuel was deregulated today, the price will come down to about approximately N144.70. This is based on expected landing cost (per platts), and 10% profit margin for those marketing the product. So based your calculation, basis of N400/litre is way too much.

I agree that pump price will increase in the short term, which might also spike up inflation. But, that's just it. Transportation cost from point A to B will increase because of this effect, which might ripple down to food, labor, and other economic factors. I don't think people will quit their job because transportation cost increased from N120 to N150. I don't think they're going to starve to death because of this reason as well, it'll just make people better planner. If people are not losing their job because of high cost of Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO), then they're not going to loose their job over high cost of PMS. Therefore, the speculative fore of throwing people into massive poverty will not happen.     

Majority of the manufacturers that operates in Nigeria utilizes AGO, HHK, LPFO not PMS for their daily operations. These products are not being subsidies in any way. These companies are still operating; they're not laying people off, they are still hiring, expanding, in face of high cost of operation. Our speculation of deregulation forcing massive layoffs is grossly over-hyped and overstated.

I am optimistic that deregulating downstream will not kill our economy, it can only rejuvenate it. I believe that if we deregulate the sector, below are some of the results that can materialize from such speculation.

1. We can save all these subsidies, and channel them into other productive area of the economy which will give higher ROI in comparison to what we currently get under status quo.
2. Under deregulation, companies will have economics and other incentives to justify downstream investment which will create massive jobs for the people.
3. With downstream investment in place; it will afford us the opportunity to refine our own crude oil for local consumption, export and contribute greatly to our GDP.
4. With downstream investments, this will contribute to both state and national tax revenue.
5. With downstream investment in place, we can produce other products that can spike up other industry which will boost jobs, tax revenue, and boost our economy.

Let us not be myopic in our thinking and continue to allow instant gratification to cloud our judgment. There is no growth without pain, and we have to be ready to make that sacrifice to enable us tease out those benefits. Deregulation is a necessary sacrifice we must make, if we want out economy to get out of its slump. Our leaders must have the discipline to see this deregulation from an objective stand point, and educate people on its benefit so that our economy can progress rather than playing with our collective intelligence.

You first, what are your expectations?

Congrats to Ghana.

Come to think of it; when your GDP is about $32 Billion, how difficult is it to improve that by 20%? Again, this is not to belittle Ghana's achievement in any way. It takes a lot of hard word, dedication to achieve this.

I just hate it when people try to put Nigeria and Ghana on the same pedestal in terms of growth and achievements.