₦airaland Forum

The previous incident was a Catholic church, and most of the names there were Igbo.

It looks like there is a pattern to Boko Haram's targets.

Anyway, very very unfortunate. May the dead RIP.

Groundnut, sugar and milk

interesting read. i don't agree, but interesting all the same

I've never been against slowly reducing it over the course of say 5 years. This is probably the less disruptive way of accomplishing the goal.

sigh

Do the calculation I suggested, then do a bit of thinking

Otherwise there isn't much point in continuing this discussion.

Pain:
Another Thread by Apologists on GEJ Payroll!

lmao

I don't have a track record as a GEJ fan.

That said, every man has his price. . . if GEJ is willing to meet this price I'd happily become his puppet

On a serious note, I just think bad policy is bad policy.

Alright. . . so about 30 seconds of googling produces this: http://energyalmanac.ca.gov/gasoline/margins/index.php

Go ahead and run through the #s yourself, you'll get the obvious answer

I doubt it is possible to even buy a liter of crude for N65 anywhere at market rates, let alone a liter of refined.

It probably would not take too long to debunk this particular assertion of his. . . I guess you should probably just google around a bit for yourself to see that he is wrong.

Then why on earth is the article using language like "netted 1.4 billion"? Emphasis on netted?

It does make more sense for this figure to reference revenue rather than profit, since Oando isn't a large enough company to net that much profit a year. At least judging from a recent quarterly report.

Still, the question remains. How much of the fuel subsidy actually reaches the common man? It doesn't seem likely that a large fraction of this pie goes where it is intended.

I am not one for whom appeal to authority generally works.

Regardless of his previous jobs, titles or positions, he is either wrong or he is right on this issue.

His claim that oil at N65/liter doesn't represent a subsidy is simply wrong.

aletheia:
[size=18pt]By then it is hoped that funds freed up by the deregulation will have subsidized your education so that you will be able to read and understand a simple press release![/size]

daaang

I don't need to read his analysis to know that he is clearly mistaken, if he thinks that N65/liter doesn't represent a subsidy.

Anyway, as I said, marginal price differential is true. . . transporting goods by sea is cheap.

BTW, lest anyone try to tribalize this. . .

There are several other prominent companies (including Capital Oil) who also make money from the fuel subsidy.

Everyone enjoys making money, regardless of tribe. So let's not use this to say that one group is holy and another is not.

One other thing.

Why do we care if smuggling continues or not once the subsidy is removed?

Who cares? It won't be costing Nigeria any money, at that point.

If you are spending 7 billion a year on fuel subsidy and 1.4 billion alone goes to Oando, then how on earth can this be a sensible policy for uplifting the common man?

Damn.

So of this 7 billion, Oando and the rest take their share, Benin, Cameroon, Niger Republic take their cut.

How much does the average guy actually see. 10%? 20%?

Nigeria’s subsidies
End them at once!
The president will be a brave man if he fulfils his promise to end cheap petrol
Dec 31st 2011 | LAGOS | from the print edition
PETROL subsidies are thought to cost Africa’s second-largest economy $7 billion a year—and Nigeria’s president, Goodluck Jonathan, says it is a priority for him to get rid of them in 2012. But most Nigerians think cheap fuel is the only benefit they get from living in an oil-rich country. As the prospect of life without subsidies looms, queues at petrol stations are lengthening, strikes are threatened and tension is rising.

Nigeria churns out 2m barrels a day (b/d) but imports almost its entire refined-fuel needs, owing to decades of mismanagement and corruption that have left its refineries to rot. Subsidies keep the pump price at $0.41 a litre but if Mr Jonathan has his way, this could rise to $0.74, in a country where most people live on less than $2 a day.

Successive governments have tried and failed to deregulate fuel imports. Mr Jonathan may show more backbone. But despite promises of safety nets to protect the poor and the need for new infrastructure and for improvements to the ragged electricity supply, Nigerians fear that the money saved by cutting fuel subsidies will be swallowed up by political fat cats.

The fuel subsidy drains cash from the state. The government has revealed that the chief beneficiaries are the 100-odd companies owned by Nigeria’s richest people, including Oando, the country’s largest indigenous private oil-and-gas firm, which alone netted $1.4 billion. The subsidies also highlight the tortuous ways of the Nigerian National Petroleum Corporation (NNPC), which has deliberately overestimated the cost of importing refined products and then pockets what is left over. The NNPC admitted in parliament that it could not account for 65,000 b/d of crude oil it should be refining, worth $7m a day at today’s price.

The government’s chronic failure to build working refineries has benefited middlemen. Imported petrol is siphoned off by third parties who take advantage of the cheap fuel in Nigeria, then smuggle it over the border to neighbouring countries where unsubsidised fuel costs three times Nigeria’s price. Billions of dollars earmarked for renovating refineries has vanished over the years. The country’s four refineries barely function: fine for those with political connections who make fortunes from imported fuel. If Mr Jonathan stops the scam yet keeps ordinary people calm, it will be a triumph.

http://www.economist.com/node/21542197

logica:
What don't you understand? That transportation is costly?

I don't think transportation is costly, as a percentage of the value of the good. What can it cost to transport say a barrel's worth of crude out of Nigeria. 1 or 2% of the roughly ~$100 per barrel?

These are not small boys doing the transportation, they are huge corporations with tons of money who have refined the logistics down to a science.

If transportation were the dominant cost, then China would not be the factory of the world. . .

Or that importation is costly (import duties)?

Are there import duties on refined fuel?

If you think transportation of oil from Nigeria to the US will only make it marginally costly, can you then explain why cars shipped in from the US usually cost double the price of the same car in the US? Or you think it's just the greedy Nigerian at work again?

Eh. . . mostly duties. If those were eliminated, the cost would be quite a bit less. Then you could fill several containers worth of cars and reduce your cost per car to something fairly negligible.

The first step is to link the building collapses to whatever the relevant Lagos board is.

I'd want to see # of building collapses over time as well as # of construction events.

If this failure rate has shot up significantly, then perhaps one can argue that it is the fault of that Lagos authority.

Then one needs to come up with an argument for why the failure of that Lagos authority is Fashola's specifically and what he should have done instead of what he did.

Otherwise this is just beer parlor, market wife stuff.

I don't understand how a politician is responsible for some private individual's shoddy construction.

If a car breaks down in Lagos, is Fashola also responsible for that?

If you believe that the relevant authorities who hand out construction permits, handle inspections, etc have grown lax, corrupt and need to be sacked, then certainly it isn't unreasonable to say that Fashola should do something about that.

But to directly blame him for a building collapse, w/o first inking it to the authorities, and then linking Fashola to those authorities? That is senseless.

I agree.

But why is its name even involved if it isn't putting up any money?

Basically I want to know to what extent it is creating the environment. . . what specifically is it doing?

Lawan Danjuma Adamu 3 January 2012
Gusau — Residents of Unguwar Samaru quarters in Gusau local government of Zamfara State yesterday morning woke up to the shocking discovery of the remains of a newly born baby by cleaners inside a sewage.

The baby, which umbilical cord was still intact, was found floating inside the sewage system around 6am in the morning, when workers turned up to evacuate its content, residents said, adding that the new born child, which was male, was dead before it was found.

Hundreds of sympathizers thronged the scene to catch glimpse of the abandoned, which was extricated and deposited by the sewage.

Daily Trust was informed that the clearing of the sewage system started a day earlier, but when work was resumed yesterday morning the remains were discovered.

"I was bailing out water from the sewage using a bucket, when I spotted something like a white nylon bag and flushed it out with the bucket. When I realized it was a human being, I got frightened and ran home to invite my parents," said a teenager.

There was however suspicion among members of the neighbourhood about the baby being dumped the previous night, as it appeared to be a fresh birth and was not seen there when work commenced on Sunday.

Speaking to our correspondent, the ward head of the area, Alhaji Abdullahi Musa Dole, said the matter had been reported to the police, who he said have given the go ahead for burial of the corpse.

He however added that they were not pointing any accusing fingers at anybody so far, as he added that the incident was the first to be witnessed in the area.

http://allafrica.com/stories/printable/201201031146.html

Somehow, the voice of these Northerners seems to be more influential with the western world than I'd previously thought.

I don't see how an Islamic terrorist organization with connections to Al Queda is somehow "not the problem."

Alas.

ulonnaya21:
Obada said 70 per cent of the project would be funded by the Chinese government while the remaining 30 per cent would be sourced from other financial institutions including NEXIM Bank, ECOWAS Bank for Investment and Development,Africa Finance Corporation, Fond Gari of Togo and FirstBank of Nigeria Plc.

So what is the federal government actually doing? 70% of the money comes from China, the other 30% from the private sector.

Did they just issue the permit?

In any case, it appears that Aganga is doing well in his new role. Kudos to him.

The attempts by some to tribalize this matter puzzle me.

Well, not quite, I understand why they are doing it.

But obviously it isn't as if average people from some ethnic group will be for the subsidy while folks from another group are against it.

[quote author=Jenifa_ link=topic=836855.msg9883300#msg9883300 date=1325544483]of course price of oil will be naturally cheaper in Nigeria because we are a major oil producing country. subsidy or no subsidy.
there is no reason that the price of oil should be more expensive in Nigeria than in benin or togo. If that is the case then what we have in our hands is an unfair price hike.[/quote]I have never understood this argument. I guess it is marginally cheaper to transport crude oil to a refinery in Nigeria if your target is the Nigerian market.

But taking the crude, shipping it abroad and refining it there probably isn't much more expensive.

Stated differently, one shouldn't expect that the price of producing refined oil will be much cheaper in Nigeria than elsewhere. Marginally yes, but not much.

Assuming that there aren't some subsidies along the way.

it's cheaper and more efficient to monitor the borders. keeping in mind, it's not only oil that's being smuggled from the country.
besides raising fuel price will reduce domestic demand and affect the economy worse than smuggling does.
or is there something i'm not seeing or understanding? I don't get it.

I don't think border security is cheap. And if you are spending $2 billion a year to prevent smuggling out the $7 or 8 billion a year or so you spend on subsidy, somehow that seems wasteful as a policy. . .

Katsumoto:
Demand will not disappear without the presence of a superior product or substitute. In this scenario, other west Africans may be priced out of petroleum products coming from Nigeria but will not stop demanding it. In the economic equilibrium of the demand/supply curve, supply will reduce with demand remaining constant resulting in lower quantity and higher prices in the countries relying on products from Nigeria.

With higher prices in other countries, Nigerian marketers will simply seize on the porous Nigerian borders and divert products to other countries causing shortages in Nigeria. This scenario is all too familiar.

The price of Nigerian refined petrol products has increased substantially. The demand of a Ghanaian or man from Cameroon must diminish from whatever it once was, due to this higher price point.

I am not claiming that it now demand =0, but my point is that demand_new < demand_old.

Alright.

I didn't get a chance to look into Venezuela. But as for the rest:

For one, I would attempt to tackle the HUGE elephant in the room - corruption. You know my views on corruption in Nigeria.

1. Trimming the cost of government e.g No Nigerian senator deserves to earn $1.2million annually. That is the times what the US President earns.
2. Ensuring that revenue is not only accounted for but judiciously spent
3. Promulgating policies that ensure wealth is created
4. Tackling wastage/inflated contracts for government projects
5. Fix the bloody existing refineries; Nigeria should not be importing petroleum products

Wonderful things of course, but would not reduce smuggling in a setting in which the price of refined petroleum had remained the same.

This is very easy. A man put gas in his car on the 31st of December at 65Naira/Litre and the following day, he has to spend 141Naira/Litre. That is a clear and quantifiable benefit. Another example, a woman takes a bus from Ikeja to CMS on the 31st of December paying 110Naira but pays 270Naira the following day. That is the real benefit; having money to spend on other things that the Nigerian government does not provide like health, education, cable TV, recharge cards, a meal at a Bukka. With the removal of the subsidy, he has less to spend on these things.

My point is, how much of the 6 of 7 billion actually reaches the common man? We can all point to individuals who benefited. But if we sum up their total benefit over the course of the year, how much does it actually end up being?

As I said, it may have been as little as 20% of the amount spent.

The Nigerian government has a poor record in terms of judicious spending. You will struggle to justify government spending in the last 25 -35years. What did the Nigerian government spend $60 Billion on last year that benefited the average Nigerian?

If this is to add to your point that the government is untrustworthy, I am not claiming that it is a good government in general. But I believe that the fuel subsidy is sufficiently bad as a policy that it makes sense to at least explore another solution.

djustice:
Fashola the Great, is working, Lagos is collapsing! Around his working ears!

How is a the collapse of a building (presumably owned by some private individual) Fashola's fault?

Is your argument that he isn't spending enough money on inspectors? Or that there is something wrong with existing regulation (latter would not be his fault btw, would be that of the legislature.)

Comments in this thread absolutely hilarious

Affordable labor is so hard to find