₦airaland Forum

@ DALOVER!!

i thought you chained that bingo called beaf! i must probe you on how he got loose.

you look at Africa from an utopic glass,

@Jp Phillips,
what has worked in libya under autocratic rule with a population of delta state and roughly the same oil as nigeria will not work in Nigeria, your insistance on a government tring to run a distored economy is what is the issue here,
Trying to use examples of such countries like Kuwait, saudi and UAE will not work with nigeria, their conditions are really exceptions ot the rule and are truely not sustainable on the long run,

you give me the impression that read your post alone and fail to read mine, let me be clear, libya refines 300,000bbls of locally produced crude below intl price daily, refine and export at which ever price they deem competitive.

however it was achieved and which political structure guarantees that is not the bone of contention. if you want the history of Libya Encarta will help you, right now, focus on what needs to be done to salvage the energy quagmire of this republic. obviously, you heard libya and voila!!! you shunned the rest of the article, the message of course you didn't grasp,
the comparison was mostly technical than political, libya is quintessence of the Nigeria's oil model because both countries enjoy highly self producing oil wells which slashes the cost of production to a reasonable extent.

the sweetness of both crude is a function of sulfuric content and refining is less expensive, the SG of both crude are equally lighter making logistic maintenance cheaper due to less deposit formation.
stop running through the window whenever you hear Libya vs Nigeria because the Cbn mickey has told you, its all about population and barrels of oils per head.

here i am talking about cost of flowing the oil, is very cheap compared to the intl crude price.

I hope you know that the international black market does not follow opec quotas, otherwise it wont be called a black market, allocating crude at $25 far below the international oil price is a reciepe for disaster, the profit difference is just toooo much. too irresistable, common, it like transfering the subsidy situation from the downstream sector to the upstream sector.

I wonder who makes economic policies with "black market" as a yard stick what is Nigeria doing in the black market? did i mention black market? are you suggesting that a competent Navy cannot stop illegal smuggling?
are we talking about security of our waters or are we discussing the way forward on cheaper energy? bros, stay on course abeg.
countries who patronize black markets are countries under heavy sanctions which Nigeria is not a member.
if the Nigerian waters is porous, you don't blame the policy but the cohesive apparatchik of the Govt whose job is to secure the waters.

please stay on point the argument.

How can you say that if I could have sold a product for $106 but decide to give it to somebody for $25, then it is not subsidy? Your argument is that everything beyound opec quota should be given away at a cheap price still doesnt work because there is no absolute law that says we must respect opec quotas, some oli producing countries are not even members of opec and sell their oil without opec hindrances,

you sound a bit shallow on the above but coming from an ally of beaf i understand completely.
$106 comes with a criteria which Nigeria must meet, if only you paid attention to the part of my post where the legally was in parenthesis, we may not have the need for this whole paragraph.

I am not making cases for non OPEC oil nations am talking about Nigeria, don't type before you read. my argument is that once Nigeria exceed its OPEC limit, you lose the privilege of earning that $106 legally.

if you say there are no laws that decide that for OPEC countries, then you lack the academic competence to argue on the point i raised.
what you are presenting as my argument is a misconception, i am not saying you should burn your oil and your selves because you exceeded your OPEC limit, i am only saying that at that verge, Nigeria needs an alternative revenue generation base because they have a surplus reserve.

one of them is buying it cheap internally, refine and export as petroleum products not crude, it is called "diversifying" not "subsidy"
when you say your oil is worth $106, yes, you are right today what about then?

except you are planning for Nigeria to become a major oil smuggler once they exceed their OPEC limit, then your argument is valid, else we should be looking at sustainability through diversification.

you seriously think that the biggest IOC is divesting to gas by accident? continue sleeping, when reality wakes you up, we may have this discussion again.




I would like you to stop calling nigeria crude cheap, I think that an insult on the average nigerdelta man you has been denied the opportunity to explore his resources and sell at a price he deems fit or is contrained to sell due to competition.



Now, you are sounding like a Niger delta youth representative in the creek, sorry to burst your bubble, i don't argue with them, i buy them "shekpe"

below was the context which i used the word "cheap" perhaps you Nigerdelta Millitant tutor skipped that part

2.  charging little: charging low prices but offering good value
Microsoft® Encarta® 2009. © 1993-2008 Microsoft Corporation. All rights reserved.

Instead of looking at the unrealistic situation that have created lazy citizens in Kuwait, Saudi UAE etc, look towards countries like USA, UK, that have more oil than nigeria, yet it is not dashed freely or cheaply in the name of subsidizing comsumption, free enterprise and hardwork drives the economy, not blanket subsidy as you are preaching.
You stated earlier that if local refineries were to but the crude at international prices that pms would cost =N=300 to =N=500 per liter in nigeria, does that mean that countries that buy at international prices sell at that rate? =N=300 is $2 per liter or $8 per galon for those living in the USA, as you can see this is not even close to the truth,

you seriously wish we should jettison the status of a developing oil nation that we are and live like the Americans and Britons? o yea!! with 75% of our populace wallowing in mass illiteracy and poverty, o yea!! with 115% corruption rate? o yea!! with nepotism, tribalism and ethnicity as national honors, you didn't write that quote above did you?

if you seriously think that the companies in the states and europe are making it big with high crude prices, this: will shock you

please check the status of the following refineries online and ask yourself if this is the business model you want your beloved Nigeria to Adopt.

in America alone;

Sunoco in philadelphia
ConocoPhillips in Pennsylvania,
Hovensa in the Virgin Islands
Sunoco's Philadelphia refinery.
carson

in Europe

St croix refinery
coryton oil refinery Essex
petroplus Reichstett france
BP
unipetrol paramo  pardubice Czech republic
shell Hamburg Germany
OMV Arpechim romania
Tamoil cremona italy
Conoco Weilhemshaven germany
conoco Humber UK
Lyondell basell  berre france
PKN orlean  lietuva lithuania
murphy oil milford heaven wales
Total  lindsey uk
total  dunkirk france
chevron penbroke UK
valeron

etc


you now understand what happens to refineries that utilize crude at intl price.

Jp Phillips, you and other nigerians, both inside and outside of government should stop trying to run a distored economy, stop trying to artifically fix prices to impress poor people,
what needs to be done? to allow for total refining of local product at a competitive price (this is international price - cost of freighting), (not giveaway price system you are advocating), allow private enterprises set up here (international and local), not to compete against govt owned refineries, if we eventually have 20 refineries operating in nigeria exporting only refined products, imagin the amount of jobs created.

at what price will they buy their oil sir?

i believe that with these few revelations, you should be apologizing for that quote.

what you don't realize is that we have an edge over those Europeans and Ameriacans on Oil and Gas, until a responsible administration seizes power, then you will understand how deep this mighty nation has fallen.

@ da lover

please running a country is not same as running your home or private buisnesses.
some decisions need to be made, please i must correct that misconception of yours that selling crude below intl crude price is " robbing" the Niger deltans of their oil.

once we meet our Opec quota, say bye bye to crude at intl crude price so there is nothing else you can do except to refine it and sell as refined products either locally or abroad.

it is much disheartening as it is for you that Nigeria is a monogamous income earner, there is nothing either of us can do about it,
we can only make plans on the Niger delta oil as the only viable source of revenue at the moment.
the decision to sell crude below intl crude price has a poethora of long term economic implications,

1 it is only cheap crude that attract refinery investors, if you dont have it, forget refineries not even God can help you.


2 refineries create jobs for the populace including the Nigerdeltans whose oil are sold below intl rate, refineries from what we are seeing at eleme create a chain reaction of employment opportunities from petrochemicals, to manufacturing support, logistics etc, that is what the Nigerian economy desperately needs at the moment.

3 a low energy cost in a country like Nigeria will drive inflation to an ebb, imagine the price of goods and services where petrol,diesel and kerosene are very cheap.
once we secure cheap energy sources forget it, this economy must bounce back to what it used to be.

you can not as a national policy maker sacrifice these points above on the alter of Nigerdelta patronage.

@ dalover

i enjoy ur enthusiasm to learn, the model i put forward is exactly how the libyan govt account for 300,000bbl of their crude daily, now you know it has worked elsewhere, lets come back home.
Nigeria is operating at an opec limit of 2.5mbbls of crude daily, once reached, we cannot legally bring forth crude to the international market.

As at last year , Nigeria was doing 2.42mbbl/d and counting.
by the second quarter or this year, Nigeria will achieve its peak and then what?.

not even oando or anyone can divert that crude "legally" from the shores of this country once our opec limit is reached.

i dont overule sharp practices but u must understand that the fundamentals of my proposal is on a "citeris paribus" basis.

secondly,

let me correct another misnomer of yours, the 25usd crude to be given to oando is not a subsidy but an ideal buisness model where cost of production ratiocinate with profit, you seriously think Nigeria's light crude is expensive here, loool
brother ask the ioc's to open their books then you will appreciate the chasm they enjoy as profit margin.

bear the following in mind when next you respond,

1 Nigeria's crude is cheap to extract after making that major investment of drilling it, most Nigerian oil wells are self producing for years which contribute to the cheaper cost of production.

2 which ever company that purchases the cheap crude cannot divert it once Nigeria meets its Opec quota, good news is; we are very close to it.

3 should the govt have a sincerity of purpose, diversion will not be an issue afterall, nobody thought that shagari will go to prison till the govt of buhari made it happen.

4 the cheap crude i advocate for Oando or any other will be refinery is not a subsidy but a ratiocination between cost of producion and marginal profit.
Oando will buy it from the producer (NPDC) at 25usd/bbl and Npdc will still make profit, not any subsidy but everyday buisness.
the choice of selling crude at 106 usd will be over as soon as the Opec limit is reached.

5 every country in the world prioritize the energy need of its citizens, if America can spend billions to fund offshore conflicts just to secure their energy interest, i dont see the reason Nigeria cannot sell crude at 25usd/bbl if it attracts a profit margin.
remember that this cheap crude is void of the jv agreement which Nigeria is still selling its 2.5mbbls/d at international crude price (once Opec limit is reached) and the cheap one at 25usd/bbl.
its double earning not a subsidy.

if you think that Nigeria doesnt prioritize its energy needs ask yourself why we had DSO (domestic supply obligation) of about 250,000bbls/d selling below int. crude rate before 2008.

@ Dalover

since you have taken it upon yourself to salvage the image of a group of incompetent petit bouazizi imperialist tabularazers in the name of economic team.

more shameful is the fact that a special adviser on new media is not only mor0nically incompetent and stup!dly deranged that he talks so empty that i wonder why we shouldnt contract the presidency to grade two pupils.

perhaps you didnt understand the question, the first paragraph of your post compares market viability of two scenarios (1) a potential refinery and (2) an importation regime with subsidy attached but i asked that presidential halleluya boy (beaf)
how does subsidy ruin an existing refinery in an oil producing nation? you can rescue the bingo feeding fat on my tax if you wish.

before you start talking like iweala, the prices you quoted above (150,130) are not phanthomed from the moon rather they are ratiocinations between cost of production/import and profit,
start telling us how exactly subsidizing for importers will ruin existing refineries and the same time, you may wish to tell us why the subsidy regime cannot be extended to locally refined products
for starters,i am most interested in knowing how subsidy ruins "existing" refineries like beaf claimed.

@ imbeci1ic beaf

stop decieving people that are not your mates, spare your lies for that cbn mickey mouse.

shell refused to stop flarring because an order came from abuja in 2008 asking them to continue production at the expiry of their flarring deadline.

you will remember that at the time the gas gathering facilities were just comming upsteam and ur useless govt did not provide their 55% so shell did the gas gathering project with their money.

ur govt opted to pay them with oil, so you cant promise to pay with oil while they invest billions and ask them to shut production, that was the reason abuja asked them to continue.

remember again that another agreement of 10usd per cubic feet was reached, in other words ur govt should foot 55% of that sum, they refused to pay what do you want shell to do?

i ask you again;

how does subsidy ruin refineries like you claimed, explain to your audience in loud and clear terms how it happens, as special adviser to the president on new media, your Nigerian audience are waiting,

please dont chicken out on us pls explain

@ beaf

before i take a final decision on your mental state ,please state categorically in loud and clear terms how subsidy ruins refineries especially one in an oil prducing country.

respond asap. im waiting

@ mor0nic beaf

how are the mighty falling, i can rem vividly how you accuse the hausa/fulani of begging for your resources, with 60% you are BEGGING a 40% partner to build refineries for you.

mr beaf for the love of christ, burry your face in shame, bow to the incompetence of the administration you serve.

first you said they are cabals we fought the cabals to a public enquiry, even when we knw your govt has all the apparatchick to bring them to justice, now they are absolved, your shameless govt has taken plates to spdc like an almajiri begging for refinery.

where is that CBN mickey mouse on bow tie always parading his m0ronic economic solutions?

where are madueke and iweala, beaf admit it now you have the chance, jonathan's bouazizi imperialist economists are a buch of thieves bereft of common sense.

the fisherman with bola hat nko? dead failures.

@ mor0nic beaf

how are the mighty falling, i can rem vividly how you accuse the hausa/fulani of begging for your resources, with 60% you are BEGGING a 40% partner to build refineries for you.

mr beaf for the love of christ, burry your face in shame, bow to the incompetence of the administration you serve.

first you said they are cabals we fought the cabals to a public enquiry, even when we knw your govt has all the apparatchick to bring them to justice, now they are absolved, your shameless govt has taken plates to spdc like an almajiri begging for refinery.

where is that CBN mickey mouse on bow tie always parading his m0ronic economic solutions?

where is madueke and iweala, beaf admit it now you have the chance, jonathan's bouazizi imperialist economists are a buch of thieves bereft of common sense.

the fisherman with bola hat nko? dead failures.

@ all 4naija

i think i have to end this arguement because it is becoming an insult,
who told you shell fed me the information im giving you?
make no mistakes, most shell employees dont have this info unless you wk with the CRO's, production or legal depts,
i speak as a man whose feet is kiss1ng the nigerdelta soil and you say shell told me?


i have been to the affected communities, inverviewed the victims and they told me the truth in favour of shell.

the guy that posted the nembe spill on page 4, may be there at this moment but it might interest you to note that i left there july last year beside nembe 2 flow station spread to nembe 1 and i saw it my self and the people responsible are not shell but " kpo fire" cum jtf. that sh1t has been there since last year, you can imagine how many times shell might have blocked it but the guys wont rest.

tomorrow, they will come to shell for compensation and clean up. shell is operating in your backyard in Nigeria not the moon, the least you can do is shut ur system, dust ur ar5e and go see things for your self, the communities are not as hostile as the media present them, interact and get your facts.

i hate it when you talk about shell and mention the interest of the Nigerian people, they are quite contradictory, shell is not responsible for The interest of the Nigerian people but your govt who has a higher stake in the jv agreement that brought them in the first place.

beaf want you to blame shell for the incompetence of the clueless administration he is working for.

did buhari ask shell to help him build the omes odechukwu cannot maintain? was shell not there then?.

beat comes here with mouth odour to foul the forum with lies upon lies and when the reality faces him, he buries his head in the sand,

didnt you read what ekt_bear wrote? is it not what is facing us?

jonathan's economic team is a disaster, they are more clueless than jona himmself,

madueke said five refineries are on the way, i looked at some factors and said it is not possible, beaf came and basking like an irritated mosquito, we didnt know that their mission was to BEG shell to build the refineries.

why was the mad rush to remove pet. subsidy when neither the palliatives nor the investment plan could be achieved.
beaf deserves to be stonned to death for decieving gullible Nigerians from April till date.

@all4naija

is shell claiming or you are claiming for shell? where in the article did shell relate their plans with your subsidy bullsh1t? you are begining to sound like jonathan.

shell doesnt want to invest in refineries for reasons i have explained to beaf and co not only in Nigeria but equally countries without subsidy, na by force?

they said they will harness gas whose market is not targeted for export this time but power generation, neither you nor your commander presido can tell them what to do with their money.

shell is fuelling so much guts because your mofos in power dont honour their jv agreement, if you want a refinery, keep your 60% funding cost on ground first before sending beaf to shine his teeth on nairaland.

about your 15yr old spill, which part of the world do you clean a 15yr old spill? do you live in the moon? where do you start the cleaning? where is the oil to clean? sounding like oil in the river stays stagnant waiting for you to come anytime to clean it?

the communities are in court to get money not that their community is still threatened by 15yr old spill

im not saying the residual effects doesnt linger but not even shell or anyother person can do sh1t about it, the fishes are dead, the trees are gone what can shell do? bring them back? you now understand why they are asking for money.

did you see the evidence shell presented to court last time on this same issue? shell had an MOU with the host communities, one of the terms of agreement was that shell will use community appointed contractors to do clean up in time of spill, on several occasions when shell alert them, they come to IA to collect money and share with the community while the spill cleans itself.

shell at a point was forced to award fresh contracts for those clean ups while the community gladly collect money.

go to ibeno, that is the same mess exxon is into the communities collect money and refuse the spill contractor to work, Exxon will give them cash till the oil disappear, it happens everywhere not only shell.

yes, i agree the communities are poor, shell should give them something, whichever judge that makes that rulling is acting on emotions and magnanimity not necessarily facts.

please take your time to study most of these FTOs and MOU before you jump into beafs kinda conclusions.

@ kukutempa

your arguement is only valid if shell registered as a subsidiary of red cross or a consulting company geared to run your presidency for you.

you dont need shell to tell you that the energy imbroglio Nigeria finds itself has nothing to do with asking someone to build a refinery for you, nevertheless, a disgruntled madueke and a confused sanusi will always jump to insanity as a solution.

@ all4naija.

i love your ambition but i can authoritatively tell you that shell is not directly responsible for the spill in the delta, if you dont understand, you ask people in pipeline operations to tell you exactly who is culpable.

the last time a shell pipeline exploded on its own causing spill was more than 5yrs ago, we recorded cases of leaking well heads which is inconsequential to the Bp example you gave above.

shell runs an integrated pipeline integrity assesment every month with one of the best contractors in the world, these contractors have the most advanced intelligent tools that scans those pipelines on 5 yr basis while cleaning and cathodic protection contractors work on monthly basis runing pigging tools, chemical injection and cathodic protection.

shell uses Rosen and TDW for pipeline intelligent inspection while they employ Nalco chemicals for corrosion control, these contractors are very reputable in europe and america and they do a very good job for shell.

what else do you want?

when mend blows up a 24" pipeline transporting 40,000bbls of crude daily, what do you expect? rhe crude will disappear?

sail through, ekulama 1 to odioma, awoba, krakamar, bile and belema and see what "kpo fire" boys are doing in connivance with jtf, tomorrow, you expect shell to clean it for you?

nonsense!!!!!

i have been waiting for beaf to return with another magic wand, this info has proven that acclaimed sons of Niger delta aka beaf have no understanding of the realities on ground in their region.

beaf was in a hurry to rush to nairaland to tell his fellow mofos that his oga has given order for refineries to be built by iocs, i told you only a stupid shell will do that and you threatened to sack them if they dont, i await you to carry out your threat.

i have a big problem with you Niger delta guys, you guys dont understand how things work in reality, you guys soak yourselves in a booter of ignorance fuelled by the rhetorics of that fulani cbn heard man,

i equally feel sorry for your oga who think that pronouncemens rule a nation, i have given order for cement price to crash, i have given orde for iocs to build refineries, always giving order without understanding the realities facing him how do you guys think?

i told you refineries will not solve the problem, you said i talk nonsense, i told you shell will not be stupid to build refineries and you said you will sack them, let us see how it goes,
nevertheless you and your oga can combine your urethra to suck oil from your beloved land once shell is gone, ignorant bingos in the corridors of power.

anyways, beaf i need you to tell your oga to withdraw the present jtf commander in the swamp, he is killing and destroying the "kpo fire" camps, because the boys refuse to yield to his unreasonable demand.

two days ago two shell guys were murdered in cold blood during a shoot out btw the jtf and "kpo fire" guys.
the new commander should be reasonable and collect what his predecessor is collecting so that peace will reign.

SANUSI THE ECONOMIC MAGICIAN



One big problem of Nigerians is our inability to scrutinize people’s pedigree.
Look at president Jonathan for instance, this is a man with zero success story as both deputy and Gov. of bayelsa state, zero success story as both vice and acting president yet Nigerians delude themselves he is the messiah even when it was clear that unscrupulous people were donating to his campaign, we still believed he will take us to the promised land on luck.


Let us talk about this mystic economic team Jonathan put together, who are these people?
I for one have no bias against any public official in which ever capacity but I have zero tolerance for incompetence.
Has sanusi’s economic model ever worked in this country? Which economic school of thought does he belong to and what is his mission in this country?


I asked this because I am an ardent follower of events in our economic sphere and have never been shy to put Sanusi’s parlance and pragmatism of economic solutions to a test, but as I speak, sanusi’s economic agenda eludes me.


This is a man who inherited a banking sector which according to Business day 2006 edition averred that “for every five Nigerians with a good job, three are bankers”.
Today, we have a Sanusi who in his usual voodoo economic jingoism has created more unemployment and inefficiency in the banking sector than the military junta.


Who is this man Sanusi?


In the words of his predecessor who consolidated these banks, “the banks were more financially robust” and doing bigger business but along the line something happened.
There was partial deregulation and the cost of diesel went all time high and very scarce, some of those companies who took loans from the banks were running high over head cost and couldn’t survive the tsunami of events that followed,
Job cuts, and eventual closure was the case. During the last days of chukwuma soludo, the businesses were already down so no way to repay the bank loans.


The banks were stranded but soludo applied wisdom, in his words ‘’ decision making in the banking system must carry the instrument of perception along’’ and that was exactly what he did, he quickly created an EDW whereby the near distressed banks could quietly access Govt. loans to revive their institutions hoping to keep people’s confidence in tact while the banks gradually recover.


Here comes our Sanusi with his usual economic parlance and political jingoism.
Destroyed the first instrument of perception which soludo fought so hard to preserve by coming on National television to announce that those banks are not healthy. Till date, we lost one of the most viable sectors of this economy; we lost meaningful employments and international confidence in our banking institutions in its entity, thanks to Sanusi’s voodoo economic theories and mystic economic solutions.


I ask again; who is this Man Sanusi and his mission in this country?


I leave you to be the judge of preceding events from Sanusi’s actions. After consulting his economic oracle, he boldly told Nigerians that the way forward is to bail out the banks (which he destroyed) and SME’s (small and medium scale enterprise) hoping that they will bounce back in business to repay the bank loans.


Till date, Sanusi has not given Nigerians the progress report of those bailed out banks and SME’s especially those in the textile business.
Today, by throwing his weight behind full deregulation in the downstream sector simply tells me that Sanusi’s witch doctor did not tell him exactly which economic formula destroyed his banks. Perhaps he thought that his SME ‘’palliative’’ was good enough for miserable Nigerians who don’t mind trading a permanent position job for a contract job which was what his SME’s were offering or rather, our employments for underemployment.


This is a man that ignores the basic on ground economic theories that work in the country for some mystic economic solutions.


That begs the question; should you deregulate fully the downstream sector, what becomes of those SME’s and how do they repay the loans you gave to them considering that energy cost and inflation will triple their over head cost? Or has his voodoo economic solution already categorized them as mere collateral damage in his economic reform agenda?


Let us analyze some of sanusi’s Hennessey inspired economic formulae.


First he said that by withdrawing subsidy they have destroyed corruption and broken the financial bones of the ‘’cabal’’ benefitting from this subsidy regime, is this really true?
If the landing cost of PMS is about 110naira and government’s inefficiency bloats it to 141naira (ofcourse, storage,transportation,deumurrage etc as enshrined into the subsidy are all Govts ineptitude).
“Citeris paribus” under the subsidy program, a marketer earns 110-65 (ie if ideally Govt clean their mess)
And without subsidy, a marketer makes 220,180,165-110 who exactly did this economic magician break their finances? Because what I see in my economics kwashiorkor is Govt transferring the burden of import deficit to the people not the marketers losing money like sanusi claims.


Secondly, his liquor economics made him believe that he will save money in the face of spiral inflation, and went ahead to justify the inflation saying it is by a little fraction not more than 4% increase, lol. What indices did this

acclaimed “pundit” use in measuring this?
In an economy without a functional price regulatory agency and a comatose standard organization with shabby police officers? In an economy where everybody is his own LGA and can fix rates with impunity? What drives this man’s economic sagacity? Witch craft?

Thirdly,


Sanusi is consistently lying to Nigerians that an increase in pump price will attract investors to build refineries; this is the verge where I think sanusi should go back to school.
SLS is not enlightened enough to understand why there was an exodus of indigenous American companies between 1998 to 2008 to Asia and Africa, reason; COST OF DOING BUISNESS or better put, UNFAVOURABLE BUISNESS CLIMATE.


With unfavorable tax laws, incessant labor wage reviews and land acquisition challenges, most companies couldn’t survive and they left US en masse conversely, land grab in Africa and cheap labor in Asia became viable alternatives.


Today, a drunk CBN governor in his usual rhetoric, capitalizing on the chasm of academic deficiency of average Nigerians is proposing that increase in pump price which will directly translate to high energy cost (in a generator driven economy), spiral inflation and high cost of labor will attract foreign investors to build refineries. Is it not ridiculous?


What kind of voodoo economic theory is that?
sanusi quickly forgot to tell Nigerians that their existing refineries even at a disappointing output is subsidized.


Mr Sanusi should have asked himself, when we deregulated diesel, did we attract heavy duty companies, diesel refineries and why?
According to his business model, I was expecting that after the deregulation of diesel, we would have had companies like CAT,Ingersollrand,Volvo,Ebara,bosh,Groove,Capco etc even refineries enhanced to produce more of Diesel with limited petroleum by products relocating their plants to Nigeria to benefit from our diesel profitable market. But in reality, that wasn’t the case and i will explain why;
Take shell for example, the presence of SPDC in portharcourt has given rise to a plethora of servicing companies rendering one or two services to shell and that is how it works. These servicing companies are equally employers of labor.
Does sanusi think that the refining companies will be servicing themselves? Is that possible? When you destroy the business environment for these smaller servicing companies to thrive, how exactly do you want the refining companies to thrive? For the few that will survive, at what cost will they render their services? Shouldn’t the investors consider these in their feasibility studies?
How will they cope? If at all it works, most components and services are definitely going to be outsourced to neighboring countries creating jobs for Ghanaians and Nigerians than Nigeria.
Some servicing companies will rather relocate to nearby countries and leave skeletal operations here in Nigeria just to stay in business; sanusi will end up exporting services elsewhere.
I am deeply ashamed and embarrassed at the caliber of people that take decisions for this nation.
I say it for the umpteenth time; we don’t need to create problems to solve problems, what we need is to ensure that Nigeria has cheaper oil on ground, that will attract investors as against sanusi’s high pump price economic theory which will breed inflation and closure of smaller companies.
The IOC’s (international oil companies) operating in Nigeria has told us that it takes less than 12 usd to extract 1bbl of our crude oil.
Why is sanusi not thinking of creating a solution from that angle? if NPDC can guarantee us just 150,000bbl/d of this cheap crude at less than 12usd, the market will be attractive, add refining cost and other cost to push it to about 22usd/bbl a pms of 30naira per litre will be achievable from these refineries and inflation will reduce by over 40%.leaving us with a plethora of servicing companies which will translate to more jobs.
Is this too much for Madueke and Sanusi to sit and figure out? Other than their inflation marred solution.


Lastly


Sanusi lied that the subsidy reinjection fund will be used to build refineries; I can’t help but pity his unrealistic mystic economic solutions.
How much is the FG’s cut in the SURE fund? Less than 600billion, what kind of refinery will that build? I hope sanusi is not confusing refineries for fuel dispensing stations or are we heading for another IMF/world bank debt burden? I don’t just get it.
Where will this SURE funding appear from? I didn’t see it in the 2012 budget proposal, is it right to increase the suffering of the Nigerian people and go back and implement your constitutional annual budget?
Where is sanusi going to get the crude oil to supply these refineries? From the little we make from our JV? I hope this man is not taking us for a ride?
This same crude we use to implement our budget? Which sells at international price? This man is cynical.
How did we end up with two monsters sanusi lamido sanusi and Allison Madueke at the same time?
I can see a pattern in Sanusi’s line of thought;
if a bank is performing poorly, CLOSE IT DOWN
If the subsidy regime is performing poorly; SCRAP IT.
Can Nigerians please help me ask Sanusi if it is a crime to proffer real economic solutions to economic challenges other than throwing away the child with the bath water?
Should we fold our hands and watch our Economic magician Sanusi scrap the economic foundation of our survival?
Sanusi and Allison madueke are doing a great disservice to this nation though I don’t expect Mr. President to fire them because he is too incompetent to read the hand writings on the wall.

someone shared this view;





The moment an
Islamic fanatic start pointing out your
errors then you know you're in even
deeper trouble than you would ever admit.
You can't make these stuffs up.
Malam Sanusi might be a Sharia scholar,
but give it to him, he sure knows how to
thump our mediocre legislators.
This narcissist seems to think he's the only
living economist out there.
From cashless banking, in an illiteracy-
ladden topography, to unwarranted ban on
ATMs at public locations, all sorts of
egregious policies he'd put in place, if not
swiftly abrogated, is a slippery slope to a
forlorn economic situation we'll soon find
ourselves in.
This is a man who placed a N10,000 tariff
on every N1M transaction in this country
and still complains about cost of handling
and logistics hurdles of securing cash.
This is a man who single handledly
implemented segregated Sharia banking
system in a secular Nigeria and handed the
first licence to his former boss who
happens to be the father of the first
known Al Qaeda operative in Nigerian
history.
The fact that Mr. Jonathan is still oblivious
to the systematic pain Lamido is inflicting
on our economy tells us more about the
President's lack of cojones than it does
about the Islamic zealot he's using to
torment the citizenry.

@ george d

you are better off ignoring brain pulse, on his 25th birthday he will thank me for giving him a first hand insider information.

@ privy

you sound like an HRO, lol exactly what my HRO used to tell new employees gosh!! she reads the damn thing like a script.

@ poster, it simply means the company has an health insurance policy or medical policy though the HRO will tell you exactly what privy said.

In Nigeria realistically speaking, the company secreately does a whole lot of tests without your knowledge simply put, any life threatening or condition that needs to be managed for a period of time will disqualify you instanta but nobody will tell you.

just recently, my former company removed ashtma from its list, still wondering how it affects office job. no employer will want to inherit a medical condition that will strain their health budget.

have they told you to go to a particular clinic at no cost? those climics are called retainership clinic where the doctor has a standing order on what to look out for and the result flies straight to either, HSE or HRO depending on the structure they run.

no matter how qualified you are, no company is generous enough to manage your HIV,diabetes and any liver situation for you in Nigeria though they deny it. it is a different ball game if you got it on duty but as a newbie, hell no!!!!!!

if your job entails flying to offshore locations, be rest assured the company will do a TB test for you, if you are an expert or you came from abroad, they must do malaria test.

if you fail TB, kiss the job good bye but if you fail malaria or typhoid you will get the job just that 3days on, HRO or HSE will book an appointment for you to see the doctor.

if your job involves manual handling of equipments," hynea" test is inevitable.

what you do is this; run the tests on your own, if you find anything that has to be managed, life threatening or not, approach the medical director of the retainership clinic, tell him the truth and beg him seriously, dont forget to use the line that you searched for that job for 8yrs,lool

if he feels the company can afrord it ,he will esponge it at first test and return it the next 6months, depending on the company's health policy, by then, you are already a staff and the company will gladly manage it for you.

the niger delta has all it takes to be a mega region save for their crimminal minded leaders.

at least outside portharcourt, almost all neighbouring towns in rivers state have constant electricity.


Amechi made a difference no doubt first of his kind, development is relative though the mentality of the people and topography makes it near impossible to develop some areas.


community wowowo is their biggest bane but overall if they had an okorocha or fashola, they would be better than this

These "political halleluya boys" are back again, dont even think of another protest because if you send those union members to my office this time, i will personally remove subsidy from your teeth with a machette.

mother of all strikes indeed can you imagine?

chei aboki wan chop oil money lool,
dey don tire for nama?

@ al ahamad

save ur breath df2006 and oiseworld are two ignoramus small boys that managed to meet their popsi's laptop unlocked.

they will only realise how s1lly their hopes are on their 25th birthday,

dullards

@ ekwynwa


good for you but he is not mine.

for the ff reasons

ojukwu's finger prints are all over kaduna nzeogwu's coup, you seriously dont think it is a coincidence that such hit pulled by his kinsmen could be largely successful without the blessing of an influential one of them highly placed in the army that was functioning like a cult?

you could remember that the progrom started in the army where some people thought it was a mere rival military cult skirmish.

it is commonsensical to assume that ojukwu a historian from oxford is aware of the UN resolution on genocide enacted in 1950 shortly after the second world war. a tool that could bring gowon to justice if he really cared about the ibos

ojukwu's father was one of the few Africans that enjoyed royalties from british oil companies in the late 50's a feature people like me thought he could have explored to use the british influence to put gowon on a tight leach a move that could have saved countless igbo lives,
it is no news that he pulled the same strings during the hunger era of the war.

ojukwu's agenda at the aburi conference has no single ibo interest. by bamboozling gowon to ratify confederation is an act of WAR an oxford graduate should know better.
how it saves the progrom is what eludes albert einstein.

if the hit in the army had succeeded, the ojukwu boys could have been in total control of the army, since his father has the biggest economic interest in the country, oil and gas not excluded, the smart historian could take a political stage. does the picture fit? army plus economy equals,

oh!! i forgot to add that he wasnt a member of the supreme military council which robs him the right to decide for them who should be the next head of state.

lastly

my heroes dont run, i will chose a hitler anyday over a gallant soldier who forgot his purse on the last plane from Uli enroute ivory coast,
lest i forget, my heroes die in the struggle for what they believe in, for one that has wasted as much lives and took to his heels? hell no!!! he doesnt qualify, i believe he will learn a lot from real heroes in the great beyond.

adieu!!!! Emeka
can u pass the coffee please.

@ ekwynwa


good for you but he is not mine.

for the ff reasons

ojukwu's finger prints are all over kaduna nzeogwu's coup, you seriously dont think it is a coincidence that such hit pulled by his kinsmen could be largely successful without the blessing of an influential one of them highly placed in the army that was functioning like a cult?

you could remember that the progrom started in the army where some people thought it was a mere rival military cult skirmish.

it is commonsensical to assume that ojukwu a historian from oxford is aware of the UN resolution on genocide enacted in 1950 shortly after the second world war. a tool that could bring gowon to justice if he really cared about the ibos

ojukwu's father was one of the few Africans that enjoyed royalties from british oil companies in the late 50's a feature people like me thought he could have explored to use the british influence to put gowon on a tight leach a move that could have saved countless igbo lives,
it is no news that he pulled the same strings during the hunger era of the war.

ojukwu's agenda at the aburi conference has no single ibo interest. by bamboozling gowon to ratify confederation is an act of WAR an oxford graduate should know better.
how it saves the progrom is what eludes albert einstein.

if the hit in the army had succeeded, the ojukwu boys could have been in total control of the army, since his father has the biggest economic interest in the country, oil and gas not excluded, the smart historian could take a political stage. does the picture fit? army plus economy equals,

oh!! i forgot to add that he wasnt a member of the supreme military council which robs him the right to decide for them who should be the next head of state.

lastly

my heroes dont run, i will chose a hitler anyday over a gallant soldier who forgot his purse on the last plane from Uli enroute ivory coast,
lest i forget, my heroes die in the struggle for what they believe in, for one that has wasted as much lives and took to his heels? hell no!!! he doesnt qualify, i believe he will learn a lot from real heroes in the great beyond.

adieu!!!! Emeka
can u pass the coffee please.

enough of this ojukwu n0nsense, he was just smart not a hero, most of the people blowing today's ojukwu trumpet dont even know him.

@ hardbody

forgive me to ask, are you a mouse?

lets talk about this present day subsidy regime,

the Cbn gov has already confessed he has evidence of round tipping , he said he paid subsidy on 15 fake vessels approved by customs.
what did madueke do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude but the biggest reason is corruption
how?

licences were given to companies without the financial muscle to build refineries also part b of the license clearly states that these armed robbers have oil lifting license embedded in their refining license,
tell me who will choose refining over lifting where he makes instant profit and inflated subsidy?
what did madueke do? nothing as usual


do you know that NNPC does not have storage facilities for all those millions of products they are quoting and importing. how exactly does Nnpc wish to store 30million litres of pms? do you know that these fg goons went ahead to licence importers without storage facilities leading to the govt paying extra
for storage on a product they are paying over 70 naira as subsidy can u beat this
stup1dity and incompetence?

what did iweala and madueke do? nothing,

do you know that these leppers in Nnpc have no grading structure for imported pms low grade,mid grade and high grade all are pms same subsidy, same price even ethanol blends have subsidy paid on them,
can you beat that?
even abroad where the products come from have different prices. some are far cheaper than others which ordinarily should attract low subsidy

what did madueke do? nothing.

do you know that these bingos at Nnpc dont maintain their pipeline networkswhich ordinarily should link one depot to the other, they have to pay extra for tankerstransporting these products all are
subsidies.even though their foreign jv partners are maintaining over 1000 pipeline networks in
Nigeria.
what did madueke do? nothing.

do you know that under madueke's watch demurrage is paid as subsidy to these importers .how cant they be reponsible for their import schedule? is it not commonsensical for madueke to prioritize the discharge of those vessels quickly in tank farms as not to attract demurrage for a product you are subsidizing?

and they want us to tighten for a better future? which future ? can iweala,Sls and madueke plan for a sustainable future if given the task? dead failures.


for every extra kobo you pay on pms you paid for madueke's incompetence.now they can see high expenditure but cant see how their incompetence is inflating the subsidy regime. Do u seriously think iweala will see it
coming if truly the economy will crash?


Let us analyze the genere and politics of these issues There are more misnomers than facts surrounding this subsidy brouhaha.

First,

the Govt said the economy will collapse, ridiculous indeed

secondly,

the Govt said oil importers are a 'cabal', nearly fell off my seat. Comrades, there are no cabals, in 2009 the
scarcity of petroleum products became intense and the Govt admitted that Nnpc through its subsidiary PPMC has failed Nigerians by their inability to meet up with
the supply of pet. Products and that phenomenon gave rise to licensing of some people to 'assist' the Nnpc in doing their job for which they are paid for. Please don't forget that hitherto, Nnpc has been doing the importation and refining themselves before corruption eroded their common sense.
These importers went abroad and came back with a price Nnpc is already aware of comprising of logistics, storage and administrative costs, these were quantified before they arrived at a price.The FG now fixed a price tag of 65naira on Pms and agreed to be reimbursing the importers the balance not oblivious of the fact that the landing cost is higher than the stipulated price
To my greatest chagrin, the Jonathan’s administration woke up and termed them
'cabals' who are fleecing the nation.


We are not docile, If Nnpc lived up to their responsibility, we won’t have need for the importers in the first place.There is no doubt that the subsidy regime is met with corrupt practices, is it not the responsibility of the govt to clamp down on those malfeasance?

the Governor of central bank confessed during the town hall meeting that he paid subsidy to 15 fake vessels who connived with customs to falsify their papers. is this not fierce corruption? And we have a shameless commander in chief? by the way, how many naval officers patrol our waters on tax payers account? efcc,icpc etc The only solution that came to the minds of this disgruntled PDP administration is to remove subsidy into-to not minding its inflationary consequences.

This is the si1liest approach any human being with brain if they have one can summon.

Thirdly,

Jonathan insulted the intelligence of Nigerians telling us that we don't benefit from this subsidy except for the importers and he had the unbridled temerity to be advertising it on NTA saying the rich are getting richer. This people are demons.

I feel sorry for people that think that competition will crash the deregulated price erroneously juxtaposing it with GSM.

Do you know that the price of crude being the raw material for refined pet. Products are sold at the same price world over? If you agree to this, then, even if you deregulate and license 5million importers the product will still be expensive because crude itself is expensive.You will still need to subsidize it to 65naira, exactly why deregulation of diesel in part did not work.The only reason you have not bought diesel @ 200naira is because there are so many illegal refineries who bunker crude, settle JTF and refine diesel at a lower price.This people still pose a great threat to the importers who buy at a higher price that is why you get diesel @ 140naira elsewhere but in the delta i buy as low as 70naira. At this verge, you will not over rule the fact that these unscrupulous elements contribute to the availability of diesel.

I still feel sorry for those who think the Govt should build more refineries, that will not solve the problem either because there is no cheap crude to supply these refineries. Do you know that even the petroleum products from our present refineries at a disappointing capacity attract subsidy? that is what Sanusi is not telling Nigerians. This Sanusi's buisness model of increasing local price to attract investors is misleading.

He should ask himself why so many buisnesses left the USA for Asia and Africa between 1998 till 2008.The reason was because cost of doing buisness in America was high so there was need to tap into Africa's cheap land and asia's cheap labour. If you increase the pump price the spiral inflation will discourage investors, you pay high for land,labour, enegy etc.

A brief insight in Nigeria's oil and gas model gives us a better outlook The oil production of Nigeria stands at 2.37 million barrels of crude daily. Nigeria get this crude in a JV (joint venture) with IOC's (international oil companies) and the Nigeria's cut stand btw 55% to 60% of thelot, if we go by 60% then, that gives a total of 1.4m barrels daily.If we average the crude price from 2009 till date, the price falls close to 100usd/bbl.In that case, Nigeria makes 140,000,000usd daily from this JV. Nigeria has a policy called DSO (domestic supply obligation) which mandates 250,000bbl/d of this crude to be refined and consumed locally,In monetary terms, the Nigerian govt is giving us 25,000,000usd worth of crude to refine.

Our three refineries at optimum capacity utilizes about 450,000bbl/d which gives 45,000,000usd in monetary terms in other words, the price of raw material in this case, crude, accrued to our refineries comes at 45m usd per day, if you add refining cost and profit of 6usd per bbl,The total cost becomes 270,000,000usd per day.There is no way you can refine that crude at that price and sell it 65naira/ l and make profit. Meanwhile, once we mark out that 45m usd worth of crude for our refineries (assuming they are working at optimum capacity), the govt has already lost 45m usd from their 140m usd daily earnings (which will affect budget implementation) and after refining will still spend more money to subsidize it to 65naira/ l (you now understand why NNPC subsidizes the products from our refineries) With this analogy, you will agree with me that if all our refineries are working optimally, the govt will spend 3times our present day subsidy to bring the pump price down to 65naira/l .
So, for those of you clamoring for refineries should be careful what you wish for because there is no cheap crude for you to refine.

I have argued abinitio that the sales of other derivatives of crude will bring down the cost of most sort PMS,DPK etc but after doing some feasibility studies, I realized i was dead wrong. I further argued that to make cheaper crude available for our refineries, the Govt should reduce the price at which it is supplied unfortunately, the senate mandated the then GMD of Nnpc that the DSO must be sold at international crude price. This i believe was proposed for the

following reasons:


1 the refineries are working below capacity so what the heck does Nnpc use the crude for?


2, there is a benchmark on crude price for budget implementation.With these reasons, any existing or yet to exist refinery in Nigeria will get crude at a international price and must need subsidy to sell at 65naira/ l, at this cross road, the then GMD of Nnpc decided that all crude should be exported and subsidy be paid on imported products.

At this verge, i must reiterate here that competition amongst importers will only crash the negligible profit margin but not cost price .Even if every Nigerian becomes an importer of pet. Prods, we can never change the fact that crude in the int l market is already expensive before thinking of refined prod. So we must need subsidy to make profit.

Before this issue of subsidizing petroleum products can be addressed,You must have the following at the back of your minds:

1, Nigeria pegs a benchmark on crude prices to enable it implement budget. This stands at 75usd/bbl. And this crude is sort from the JV

.2, if crude price exceed the benchmark above, Nigeria makes excess crude revenue (ECR)
3, conversely, if we make excess crude revenue, the price of subsidy on refined products shoot up.With the above analogy, One can argue that the ECR be used to subsidize imported petroleum products since both are a function of each other unfortunately in Nigeria, it comes with its
own challenges.
By law, the constitution clearly states that all revenue accrued to the FG be shared amongst the three tiers of Govt.This alone makes it illegal for the FG to keep the ECR to itself for whatever reason.This is where the wahala started, during GEJ's campaign, he astronomically increased workers salary without consulting the state Governors,most Governors have refused to pay on the grounds that they cannot afford it. On that grounds Taraba, jigawa and some other states have a genuine case.With the above development, the states started scrambling for funds and remembered the ECR and insisted it must be shared to enable them pay the new wage and develop infrastructures.
(you now understand why all state governors are for subsidy removal
including the literally "one of us" comrade Adams oshiomole, because they know it will be shared just like the ECR)


The way forward:


In the short run:


FG, must
consider these options
1, identify and tackle the corruption and incompetence prevalent in the subsidy regime above. That will push down the cost of the subsidy in the first place.Like i said in April, no matter how sincere GEJ think his administration is, he cannot make any reasonable progress in the face of corruption,

2, the power projects must come upstream before removing subsidy, this will reduce the demand on pet. Products to a very great extent.

3, Nigeria must accommodate Gas export, port duties and other forms of revenue in their budget implementation policies.

4, Govt must never invest an extra kobo in our moribund refineries, by doing otherwise, the cost price of the refineries will rise to an extent that it will no longer be attractive to investors or will prolong their repayment plan Thereby making it very capital intensive.

5, Instead of deceiving Nigerians with their cabal bullshit and deluding them that they don't benefit from this subsidy, the FG should channel that propaganda withintense lobbying to the senate,NLC and civil society organizations to stop the state governors from demanding for the ECR, this can be achieved by the FG asking the state to pay whatever increment they can afford for the workers that way the ECR will be used for subsidizing pet. Products.



In the long run:


Nigeria must seek local production capacity.It is no longer news that Nnpc and its subsidiaries have failed woefully in meeting the needs of the Nigerian people. Nnpc through its subsidiaries Npdc and Ngc are saddled with the responsibility of the above for oil and gas production respectively, but as i write, the current production of NPDC stands at a paltry 90,000bbl/ day which is a huge failure for an agency set up 23yrs ago,

The IOC's has made us believe that it will cost less than 12usd to extract 1bbl of our oil.
The Management of NPDC must be reshuffled and if possible experts brought in on contract basis to improve NPDC's production.These experts must be placed on targets appraised by milestones.

In ogoni land for instance, Anglo dutch has a lot of abandoned production facilities and marginal wells and others scattered all over the country, these can be bought by NPDC with the money FG want to waste on refineries to improve production,


If NPDC can extract oil at 12usd/bbl and make a little profit, with this cheap oil available, Nigeria will have no reason going to the JV.

This cheap crude is what will attract investors to build refineries and create jobs against sanusi's pump price increase to attract investors and create another monster called INFLATION,

A 250,000bbl/d refinery will cost a little above 5b usd, dangote alone can afford two of those only if NPDC can guarantee cheap oil. This is why no investor is coming to build refineries. A crude price of 18usd/bbl from NPDC will guarantee pump price of less than 30naira per litre of pms from these refineries.With this plan,By the end of this Administration, NPDC will have robust production capacity and the refineries will guarantee steady refined products. These refineries shouldn't be operated by the Govt for any reason.

The FG will generate revenue from both ends, export of crude and export refined products and the production of NPDC must be increasing periodically. this is necessary because Nigeria as a member of OPEC has a limit to crude export but we can earn more revenue from petroleum products export.

Once the above takes effect, there won’t be any need to be paying subsidy because pump price will be around 23naira/ l and inflation will reduce by 40‰.

Now, how competent is Allison Madueke and iweala if they can’t figure this out? To think of removing subsidy at this stage where there is no electricity and high corruption rate will be tantamount to economic suicide.

I cant believe iweala and sanusi are using trial and error approach to economic solutions please try the next country or preferably Haiti.

What iweala forgot is that in the face of inflation, the cost of running Govt projects will be high, All Govt contractors will definitely come back for contract variations or Abandon those projects.

As a sound economist, she should tell Nigerians the value of 1.3 trillion naira
( she intends to save on subsidy removal) in the face of 60% inflation and how many projects Nigerians will benefit from the subsidy removal?

If you remove subsidy and the money disappears, then it is a NO NO for Nigerians.

Now, let us analyze possible solutions to
this economic quagmire.

I have a deal for iweala.


fight corruption and inefficiencies in the subsidy regime and bring it down to
300billion for this year.

The management of Npdc must have a
Target of 150,000bbl/d by dec 2012. on january 2013 subsidy will go by 50% and by dec 2013 Npdc should guarantee 200,000bbl/d on


1st january 2014 subsidy must go 100%. with or without the refineries on ground, then if Nigerians are sacrificing, they will know it has a limit pending when refineries that will utilize the cheap oil on ground arrives.
tell me what WE are sacrifising for today? eternal slavery? corruption?

I and my generations cannot and will not sacrifice for Govt's incompetence.

Nigerians should never accept partial deregulation, it is more dangerous than total deregulation because Nigeria hasn't a price regulatory agency who ordinarily should put the markets and commuters on check.

Deregulation in the down stream sector is not same as telecoms, we need structures to support it which Nigeria have not got unlike the later.

@ oiseworld

congrats!!! you just won the m0r0nic poster of the year award. in your interest, when you see a thread you dont understand its contents, kindly ignore it or call an adult to explain.

subsidy means government's contribution to a key sector of the economy to make life bearable for its tax payers citizens.

from your post above i can only deduce you dont pay tax so you think govt has its money void of its citizens efforts, i may be close to the truth cos you yahoo boys dont pay tax.

where did you get that mentality that you deserve less? are you sleeping with beaf?

you pay tax to a govt to provide amenities for you,

first, they couldnt provide electricity hence you resort to generators to power your homes, officies and industries.

a responsible govt says they will refund you a part of your energy cost (subsidy) because their incompetence is killing you slowly.

an irresponsible govt comes and increases the inefficiency in the same govt subsidy, corrupts and overbloats its govt and ask you to bear the energy cost alone without even providing you with jobs and you sit behind your system and type yes sir!!! as a political halleluya boy.

with this mentality of yours, give me two reasons why you are better than a goat?

i tot it was the 3-3 branch, you could just walk down to ogbatulenyi junct, give those housing soldiers 10k and they will gladly dismantle it for you and frog jump the pastor join, but since you are Awada tested,
go to Nurtw office, give them 20k, they will dismantle it for you, God will understand afterall God has disowned most churches but they still operate without God's license.

i think i like it this way, Nigerians need a reason to stand up to incompetence,
if we had people still voting pdp in rerun elections, people who supported the removal of pet. subsidy tells me that we have a long way to go but in the end, pdp has never disappointed us with more suffering.
i feel sorry for the mentality of Nigerians but i like what befalls them in the end.

lets talk about this present day subsidy regime, the Cbn gov has already confessed he has evidence of round tripping , he said he paid subsidy on 15 fake vessels approved by customs.
what did madueke do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude but the biggest reason is corruption
how?

licences were given to companies without the financial muscle to build refineries also part b of the license clearly states that these armed robbers have oil lifting license embedded in their refining license,
tell me who will choose refining over lifting where he makes instant profit and inflated subsidy?
what did madueke do? nothing as usual

do you know that NNPC does not have storage facilities for all those millions of products they are quoting and importing. how exactly does Nnpc wish to store 30million litres of pms? do you know that these fg goons went ahead to licence importers without storage facilities leading to the govt paying extra
for storage on a product they are paying over 70 naira as subsidy can u beat this
stup1dity and incompetence?

what did iweala and madueke do? nothing,

do you know that these leppers in Nnpc have no grading structure for imported pms low grade,mid grade and high grade all are pms same subsidy, same price even ethanol blends have subsidy paid on them,
can you beat that?
even abroad where the products come from have different prices. some are far cheaper than others which ordinarily should attract low subsidy

what did madueke do? nothing.

do you know that these bingos at Nnpc dont maintain their pipeline networkswhich ordinarily should link one depot to the other, they have to pay extra for tankerstransporting these products all are
subsidies.even though their foreign jv partners are maintaining over 1000 pipeline networks in
Nigeria.
what did madueke do? nothing.

do you know that under madueke's watch demurrage is paid as subsidy to these importers .how cant they be reponsible for their import schedule? is it not commonsensical for madueke to prioritize the discharge of those vessels quickly in tank farms as not to attract demurrage for a product you are subsidizing?

and they want us to tighten for a better future? which future ? can iweala,Sls and madueke plan for a sustainable future if given the task? dead failures.


for every extra kobo you pay on pms you paid for madueke's incompetence.now they can see high expenditure but cant see how their incompetence is inflating the subsidy regime. Do u seriously think iweala will see it
coming if truly the economy will crash?


Let us analyze the genere and politics of these issues There are more misnomers than facts surrounding this subsidy brouhaha.

First,

the Govt said the economy will collapse, ridiculous indeed

secondly,

the Govt said oil importers are a 'cabal', nearly fell off my seat. Comrades, there are no cabals, in 2009 the
scarcity of petroleum products became intense and the Govt admitted that Nnpc through its subsidiary PPMC has failed Nigerians by their inability to meet up with
the supply of pet. Products and that phenomenon gave rise to licensing of some people to 'assist' the Nnpc in doing their job for which they are paid for. Please don't forget that hitherto, Nnpc has been doing the importation and refining themselves before corruption eroded their common sense.
These importers went abroad and came back with a price Nnpc is already aware of comprising of logistics, storage and administrative costs, these were quantified before they arrived at a price.The FG now fixed a price tag of 65naira on Pms and agreed to be reimbursing the importers the balance not oblivious of the fact that the landing cost is higher than the stipulated price
To my greatest chagrin, the Jonathan’s administration woke up and termed them
'cabals' who are fleecing the nation.


We are not docile, If Nnpc lived up to their responsibility, we won’t have need for the importers in the first place.There is no doubt that the subsidy regime is met with corrupt practices, is it not the responsibility of the govt to clamp down on those malfeasance?

the Governor of central bank confessed during the town hall meeting that he paid subsidy to 15 fake vessels who connived with customs to falsify their papers. is this not fierce corruption? And we have a shameless commander in chief? by the way, how many naval officers patrol our waters on tax payers account? efcc,icpc etc The only solution that came to the minds of this disgruntled PDP administration is to remove subsidy into-to not minding its inflationary consequences.

This is the si1liest approach any human being with brain if they have one can summon.

Thirdly,

Jonathan insulted the intelligence of Nigerians telling us that we don't benefit from this subsidy except for the importers and he had the unbridled temerity to be advertising it on NTA saying the rich are getting richer. This people are demons.

I feel sorry for people that think that competition will crash the deregulated price erroneously juxtaposing it with GSM.

Do you know that the price of crude being the raw material for refined pet. Products are sold at the same price world over? If you agree to this, then, even if you deregulate and license 5million importers the product will still be expensive because crude itself is expensive.You will still need to subsidize it to 65naira, exactly why deregulation of diesel in part did not work.The only reason you have not bought diesel @ 200naira is because there are so many illegal refineries who bunker crude, settle JTF and refine diesel at a lower price.This people still pose a great threat to the importers who buy at a higher price that is why you get diesel @ 140naira elsewhere but in the delta i buy as low as 70naira. At this verge, you will not over rule the fact that these unscrupulous elements contribute to the availability of diesel.

I still feel sorry for those who think the Govt should build more refineries, that will not solve the problem either because there is no cheap crude to supply these refineries. Do you know that even the petroleum products from our present refineries at a disappointing capacity attract subsidy? that is what Sanusi is not telling Nigerians. This Sanusi's buisness model of increasing local price to attract investors is misleading.

He should ask himself why so many buisnesses left the USA for Asia and Africa between 1998 till 2008.The reason was because cost of doing buisness in America was high so there was need to tap into Africa's cheap land and asia's cheap labour. If you increase the pump price the spiral inflation will discourage investors, you pay high for land,labour, enegy etc.

A brief insight in Nigeria's oil and gas model gives us a better outlook The oil production of Nigeria stands at 2.37 million barrels of crude daily. Nigeria get this crude in a JV (joint venture) with IOC's (international oil companies) and the Nigeria's cut stand btw 55% to 60% of thelot, if we go by 60% then, that gives a total of 1.4m barrels daily.If we average the crude price from 2009 till date, the price falls close to 100usd/bbl.In that case, Nigeria makes 140,000,000usd daily from this JV. Nigeria has a policy called DSO (domestic supply obligation) which mandates 250,000bbl/d of this crude to be refined and consumed locally,In monetary terms, the Nigerian govt is giving us 25,000,000usd worth of crude to refine.

Our three refineries at optimum capacity utilizes about 450,000bbl/d which gives 45,000,000usd in monetary terms in other words, the price of raw material in this case, crude, accrued to our refineries comes at 45m usd per day, if you add refining cost and profit of 6usd per bbl,The total cost becomes 270,000,000usd per day.There is no way you can refine that crude at that price and sell it 65naira/ l and make profit. Meanwhile, once we mark out that 45m usd worth of crude for our refineries (assuming they are working at optimum capacity), the govt has already lost 45m usd from their 140m usd daily earnings (which will affect budget implementation) and after refining will still spend more money to subsidize it to 65naira/ l (you now understand why NNPC subsidizes the products from our refineries) With this analogy, you will agree with me that if all our refineries are working optimally, the govt will spend 3times our present day subsidy to bring the pump price down to 65naira/l .
So, for those of you clamoring for refineries should be careful what you wish for because there is no cheap crude for you to refine.

I have argued abinitio that the sales of other derivatives of crude will bring down the cost of most sort PMS,DPK etc but after doing some feasibility studies, I realized i was dead wrong. I further argued that to make cheaper crude available for our refineries, the Govt should reduce the price at which it is supplied unfortunately, the senate mandated the then GMD of Nnpc that the DSO must be sold at international crude price. This i believe was proposed for the

following reasons:


1 the refineries are working below capacity so what the heck does Nnpc use the crude for?


2, there is a benchmark on crude price for budget implementation.With these reasons, any existing or yet to exist refinery in Nigeria will get crude at a international price and must need subsidy to sell at 65naira/ l, at this cross road, the then GMD of Nnpc decided that all crude should be exported and subsidy be paid on imported products.

At this verge, i must reiterate here that competition amongst importers will only crash the negligible profit margin but not cost price .Even if every Nigerian becomes an importer of pet. Prods, we can never change the fact that crude in the int l market is already expensive before thinking of refined prod. So we must need subsidy to make profit.

Before this issue of subsidizing petroleum products can be addressed,You must have the following at the back of your minds:

1, Nigeria pegs a benchmark on crude prices to enable it implement budget. This stands at 75usd/bbl. And this crude is sort from the JV

.2, if crude price exceed the benchmark above, Nigeria makes excess crude revenue (ECR)
3, conversely, if we make excess crude revenue, the price of subsidy on refined products shoot up.With the above analogy, One can argue that the ECR be used to subsidize imported petroleum products since both are a function of each other unfortunately in Nigeria, it comes with its
own challenges.
By law, the constitution clearly states that all revenue accrued to the FG be shared amongst the three tiers of Govt.This alone makes it illegal for the FG to keep the ECR to itself for whatever reason.This is where the wahala started, during GEJ's campaign, he astronomically increased workers salary without consulting the state Governors,most Governors have refused to pay on the grounds that they cannot afford it. On that grounds Taraba, jigawa and some other states have a genuine case.With the above development, the states started scrambling for funds and remembered the ECR and insisted it must be shared to enable them pay the new wage and develop infrastructures.
(you now understand why all state governors are for subsidy removal
including the literally "one of us" comrade Adams oshiomole, because they know it will be shared just like the ECR)


The way forward:


In the short run:


FG, must
consider these options
1, identify and tackle the corruption and incompetence prevalent in the subsidy regime above. That will push down the cost of the subsidy in the first place.Like i said in April, no matter how sincere GEJ think his administration is, he cannot make any reasonable progress in the face of corruption,

2, the power projects must come upstream before removing subsidy, this will reduce the demand on pet. Products to a very great extent.

3, Nigeria must accommodate Gas export, port duties and other forms of revenue in their budget implementation policies.

4, Govt must never invest an extra kobo in our moribund refineries, by doing otherwise, the cost price of the refineries will rise to an extent that it will no longer be attractive to investors or will prolong their repayment plan Thereby making it very capital intensive.

5, Instead of deceiving Nigerians with their cabal bullshit and deluding them that they don't benefit from this subsidy, the FG should channel that propaganda withintense lobbying to the senate,NLC and civil society organizations to stop the state governors from demanding for the ECR, this can be achieved by the FG asking the state to pay whatever increment they can afford for the workers that way the ECR will be used for subsidizing pet. Products.



In the long run:


Nigeria must seek local production capacity.It is no longer news that Nnpc and its subsidiaries have failed woefully in meeting the needs of the Nigerian people. Nnpc through its subsidiaries Npdc and Ngc are saddled with the responsibility of the above for oil and gas production respectively, but as i write, the current production of NPDC stands at a paltry 90,000bbl/ day which is a huge failure for an agency set up 23yrs ago,

The IOC's has made us believe that it will cost less than 12usd to extract 1bbl of our oil.
The Management of NPDC must be reshuffled and if possible experts brought in on contract basis to improve NPDC's production.These experts must be placed on targets appraised by milestones.

In ogoni land for instance, Anglo dutch has a lot of abandoned production facilities and marginal wells and others scattered all over the country, these can be bought by NPDC with the money FG want to waste on refineries to improve production,

If NPDC can extract oil at 12usd/bbl and make a little profit, with this cheap oil available, Nigeria will have no reason going to the JV.
This cheap crude is what will attract investors to build refineries and create jobs against sanusi's pump price increase to attract investors and create another monster called INFLATION, A 250,000bbl/d refinery will cost a little above 5b usd, dangote alone can afford two of those only if NPDC can guarantee cheap oil. This is why no investor is coming to build refineries. A crude price of 18usd/bbl from NPDC will guarantee pump price of less than 30naira per litre of pms from these refineries.With this plan,By the end of this Administration, NPDC will have robust production capacity and the refineries will guarantee steady refined products. These refineries shouldn't be operated by the Govt for any reason.The FG will generate revenue from both ends, export of crude and export refined products and the production of NPDC must be increasing periodically. this is necessary because Nigeria as a member of OPEC has a limit to crude export but we can earn more revenue from petroleum products export. Once the above takes effect, there won’t be any need to be paying subsidy because pump price will be around 23naira/ l and inflation will reduce by 40‰.

Now, how competent is Allison Madueke and iweala if they can’t figure this out? To think of removing subsidy at this stage where there is no electricity and high corruption rate will be tantamount to economic suicide.

I cant believe iweala and sanusi are using trial and error approach to economic solutions please try the next country or preferably Haiti.

What iweala forgot is that in the face of inflation, the cost of running Govt projects will be high, All Govt contractors will definitely come back for contract variations or Abandon those projects.
As a sound economist, she should tell Nigerians the value of 1.3 trillion naira
( she intends to save on subsidy removal) in the face of 60% inflation and how many projects Nigerians will benefit from the subsidy remova? If you remove subsidy and the money disappears, then it is a NO NO for Nigerians.

Now, let us analyze possible solutions to
this economic quagmire.

I have a deal for iweala.


fight corruption and inefficiencies in the subsidy regime and bring it down to
300billion for this year. The management of Npdc must have a
Target of 150,000bbl/d by dec 2012. on january 2013 subsidy will go by 50% and by dec 2013 Npdc should guarantee 200,000bbl/d on
1st january 2014 subsidy must go 100%. with or without the refineries on ground, then if Nigerians are sacrificing, they will know it has a limit pending when refineries that will utilize the cheap oil on ground arrives.
tell me what WE are sacrifising for today? eternal slavery?

I and my generations cannot and will not sacrifice for Govt's incompetence.

Nigerians should never accept partial deregulation, it is more dangerous than total deregulation because Nigeria hasn't a price regulatory agency who ordinarily should put the markets and commuters on check.

Deregulation in the down stream sector is not same as telecoms, we need structures to support it which Nigeria have not got unlike the later.

ok, the truth, the two guys that posted the backlog issue and banking perspective are the major reasons.
banks dont fund pet import any longer thanks to Sanusi's disgruntled risk managed cbn.
without loans, the marketers are few expect the major marketers that have the financial muscle to make things happen on their own.

where are the m0rons clamouring for market forces? who can compete with the cabal at such a risky venture?
we dont tell ourselves the truth, the whole subsidy brouhaha was a white lie.
i expect you guys to be asking why the subsidy removal is not working? they sold crap to you guys, beaf and co bought that n0nsense.

joboy is busy playimg with paw paw while the nation is run by incompetent bingos.
you guys have not seen anything, read below and understand the truth about the petroleum industry to realise that this imperialist economists in the name of economic team are no where near the answer.
several points in the post below has been unfolded more to come, enjoy your pdp regret

@ noblezone

after smoking that subsidy crack beef is feeding you, you will come back like a prodigal son to embrace reaality.