₦airaland Forum

@ klas

I think I agree with you, the end of this road is phased removal which Nigerians wont be better off with it.

Nigeria doesnt have an efficient price regulatory agency. this is where another wahala will start, traders will inflate prices at the least increament and it will never come down.

furthermore, a further removal perhaps in a year or so will be tantamount to further increase in prices worse than what we have today.

SAY NO TO PHASED REMOVAL,

65NAIRA OR NOTHING.

either way, we re f.ucked

sanusi is drunk, please where is chukwuma soludo to explain to migraned sanusi that both in micro and macro economics recurrent expenditure of 1.6trln is not inconsequential.

conversely, if it is, then the corruption and incompetence in the subsidy regime should be fought to push subsidy to the inconsequential region of micro and macro expenditure.
the corruption and incompetence I talk of is this:


lets talk about this present 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 jonathan do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude in part 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 jonathan 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? odechukwu's scrotum I guess.

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 u are paying over 70 naira as subsidy can u beat this stup1dity and incompetence?

what did iweala and jonathan 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 na 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 iweala do? nothing.



do you know that these bingos at Nnpc dont maintain their pipeline networks which ordinarily should link one depot to the other,
they have to pay extra for tankers transporting these products all na subsidy.
even their jv partners are maintaining over 1000 pipeline networks in Nigeria.

what did iweala 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.
madueke a toddler is smarter than you.

and you want me toughen 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.

look at their teeth that economy will crash, u seriously think iweala will see it comming if it was true that economy will crash.

incompetent basta.rds.

I have a deal for iweala.

fight corruption and incompetence in the subsidy regime and
bring it down to 300billion for this year.
let the management of Npdc 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 im sacrificing I will know it has a
limit pending when refineries that will
utilize the cheap oil on ground arrives.
tell me what im sacrifising for today?
eternal slavery?


I and my generations cannot and will not
sacrifice for Govt's incompetence.
now, if you dont mind, I have placards to
paint

@ dalover

read this and give me two reasons Nigerians shouldn't be on the streets

How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First,

the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.

Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance?  When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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.
When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?


In a generator driven economy like ours?
It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself. I will post the pictures later.

Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, 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

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 high 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 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:

While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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 will attract investors to build refineries and create jobs, 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 22naira 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.

Please if the both of you want a 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.

@ mamita99

read my initial post and tell me jonathan did not cause this problem 60%.

lets talk about this present 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 jonathan do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude in part 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 jonathan 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? odechukwu's scrotum I guess.

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 u are paying over 70 naira as subsidy can u beat this stup1dity and incompetence?

what did iweala and jonathan 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 na 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 iweala do? nothing.



do you know that these bingos at Nnpc dont maintain their pipeline networks which ordinarily should link one depot to the other,
they have to pay extra for tankers transporting these products all na subsidy.
even their jv partners are maintaining over 1000 pipeline networks in Nigeria.

what did iweala 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.
madueke a toddler is smarter than you.

and you want me toughen 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.

look at their teeth that economy will crash, u seriously think iweala will see it comming if it was true that economy will crash.

incompetent basta.rds.
I have a deal for iweala.

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

let the management of Npdc 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 im sacrificing I will know it has a
limit pending when refineries that will
utilize the cheap oil on ground arrives.
tell me what im sacrifising for today?
eternal slavery?

I and my generations cannot and will not
sacrifice for Govt's incompetence.
now, if you dont mind, I have placards to
paint.

I have a deal for iweala.
fight corruption and incompetence in the subsidy regime and
bring it down to 300billion for this year.

let the management of Npdc 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 im sacrificing, I will know it has a
limit pending when refineries that will
utilize the cheap oil on ground arrives.

tell me what im sacrifising for today?
eternal slavery borne from the incompetence of a corrupt administration.

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

now, if you dont mind, I have placards to
paint.

read this and give me two reasons Nigerians shouldn't be on the streets

How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First,

the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.

Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance?  When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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.
When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?


In a generator driven economy like ours?
It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself. I will post the pictures later.

Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, 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

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 high 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 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:

While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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 will attract investors to build refineries and create jobs, 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 22naira 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.

Please if the both of you want a 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.

@ mamita99

read my initial post and tell me jonathan did not cause this problem 60%.

lets talk about this present 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 jonathan do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude in part
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 jonathan 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? odechukwu's scrotum I guess.

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 u are paying over 70 naira as subsidy can u beat this stup1dity and incompetence?

what did iweala and jonathan 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 na 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 iweala do? nothing.



do you know that these bingos at Nnpc dont maintain their pipeline networks which ordinarily should link one depot to the other,
they have to pay extra for tankers transporting these products all na subsidy.
even their jv partners are maintaining over 1000 pipeline networks in Nigeria.

what did iweala 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.
madueke a toddler is smarter than you.

and you want me toughen 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.

look at their teeth that economy will crash, u seriously think iweala will see it comming if it was true that economy will crash.

incompetent basta.rds.

lets talk about this present 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 jonathan do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude in part though most of them could have relied on stolen 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 jonathan 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? odechukwu's scrotum I guess.

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 u are paying over 70 naira as subsidy can u beat this stup1dity and incompetence?

what did iweala and jonathan 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 na 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 iweala do? nothing.



do you know that these bingos at Nnpc dont maintain their pipeline networks which ordinarily should link one depot to the other,
they have to pay extra for tankers transporting these products all na subsidy.
even their jv partners are maintaining over 1000 pipeline networks in Nigeria.

what did iweala 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.
madueke a toddler is smarter than you.

and you want me toughen 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.

look at their teeth that economy will crash, u seriously think iweala will see it comming if it was true that economy will crash.

incompetent basta.rds.

@ mamita99

read my initial post and tell me jonathan did not cause this problem 60%.

lets talk about this present 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 jonathan do? nothing

the reasons investors did not build refineries over the years was lack of cheap crude in part though most of them could have relied on stolen 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 jonathan 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? odechukwu's scrotum I guess.

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 u are paying over 70 naira as subsidy can u beat this stup1dity and incompetence?

what did iweala and jonathan 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 na 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 iweala do? nothing.



do you know that these bingos at Nnpc dont maintain their pipeline networks which ordinarily should link one depot to the other,
they have to pay extra for tankers transporting these products all na subsidy.
even their jv partners are maintaining over 1000 pipeline networks in Nigeria.

what did iweala 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.
madueke a toddler is smarter than you.

and you want me toughen 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.

look at their teeth that economy will crash, u seriously think iweala will see it comming if it was true that economy will crash.

incompetent basta.rds.

@ dalover

you still dont get it, Nigerians are angry because jonathan has OPTIONS.
people sympathise with you when you have exhausted your limit.

you mentioned the US, yes they are doing all that is necessary and that is why they still get the support of the people who make different forms of sacrifice to tackle the terrorism scourge.

believe me a plethora of US citizens are willing to enrol in the military because their govt is on the right track

yes, the US citizens have made their own sacrifices by embracing the PATRIOT ACT for a civillized people whose democracy is built on equal rights and freedom, that is the biggest sacrifice any Govt can ask for and the govt remained grateful for that sacrifice.

today their Govt has killed bin ladden after so many success stories over the years and that is justice for the 3million citizens that lost loved ones on 9/11.

let me make it clear to you that this govt has not done any single thing whatsoever to demand this atrocity they are meting on us.

I have a deal for iweala.

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

let the management of Npdc 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 im sacrificing I will know it has a limit pending when refineries that will utilize the cheap oil on ground arrives.

tell me what im sacrifising for today? eternal slavery?

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

now, if you dont mind, I have placards to paint

@ dalover

read this and give me two reasons Nigerians shouldn't be on the streets

How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First,

the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.

Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance?  When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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.
When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?


In a generator driven economy like ours?
It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself. I will post the pictures later.

Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, 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

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 high 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 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:

While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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 will attract investors to build refineries and create jobs, 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 22naira 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.

Please if the both of you want a 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.

@ poster,

your post sound like the gibberish dame whispers into jona's ear when they make love,
it remains a win win for the markerters and a more win at subsidy removal.
I dont see how
138-65 is better than 180- cp.
lol reuben Abati has mathematical kwashiokor

@ omo tier
I chose to promote you to cargo because that is the much a mortuary attendant can afford
lol

permission granted

@ omo tier
stop distracting me with your messages, the flight you mentioned is a cargo flight, re u a cargo?
who dash you executive in uk oh!! I see, you are an executive in a waste recycling company lol
uk area champion

area!!!

that baby is still crying change the damn dipers omo tier
now if you dont mind I have a youth meeting to attend in prep to our monday street march.
will update you as we progress, pray for us

that baby is still crying change the damn dipers omo tier
now if you dont mind I have a youth meeting to attend in prep to our monday street march.
will update you as we progress, pray for us

@ omo tier
the post was meant for Nigerians in Nigeria not Nigerians in the Uk working as genitors, cab drivers, security guards, door men and mortuary attendants.

it is a message for Nigerians that wish to make ur motherland a better place so that your likes will come back from exile.

Now quickly go and change that kid' s nappies freaking white man's nanny.
you black disgrace.

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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 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.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, if we go by 60% thenThat 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 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

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 high 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.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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:

1 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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.

Please if the both of you want a 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

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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 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.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In  generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, if we go by 60% thenThat 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 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

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 high 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.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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:

1 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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.

Please if the both of you want a 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

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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 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.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, if we go by 60% thenThat 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 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

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 high 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.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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:

1 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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.

Please if the both of you want a 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

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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 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.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, if we go by 60% thenThat 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 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

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 high 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.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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:

1 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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.

Please if the both of you want a 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

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, 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.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this 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 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.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

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 in the whole world?

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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.

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 the lot, if we go by 60% thenThat 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 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

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 high 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.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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:

1 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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.

Please if the both of you want a 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

How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.Fellow Nigerians, 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 priceTo my greatest chagrin, the Jonathan’s administration woke up and termed them 'cabals' who are fleecing the nation.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance?  When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?Are we this 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 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. When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In  generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.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 in the whole world?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, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignmentIf he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself. I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have 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.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 the lot, if we go by 60% thenThat 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 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/lWith 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 high 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.Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the 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.The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,1,  identify and tackle the corruption prevalent in the subsidy regime. 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 with intense 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 subsidiary 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 productionThese 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 will attract investors to build refineries and create jobs,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 22naira 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.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. Please if the both of you want a 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

this was my response to k brown when the vodoo economist iweala proposed 120naira.

excerpts;

You simply forgot that the same people
who have these license whose subsidy you
want to remove are the same people you
expect to flood the market for competion.
Let me tell you the end of this road
Once subsidy is removed, these existing
importers will unite and create an artificial
scacity, the proposed 120naira will remain
a mirage
Once scarce, the price will skyrocket and
they will make 4times their profit before
subsidy removal, as we speak, they are
praying for the Govt to miss cue.
The new licensed individuals cannever
have the liquidity to saturate the market at
lower cost also bearing in mind that the
existing cartel already have an efficient
structure, all the cabal need is 60percent
control of the market and they will be the
price determinants
By the end of the first quarter of next year
odechukwu will go begging them to crash
prices and you know what will happen,
they will simply refuse or demand for
ridiculos govt soft loans and grants and we
will have another cement situation and
more expensive subsidy
By the end of the above we will have more
professional beggers on the streets of
Lagos.
Make no mistakes, the Govt 120naira
proposed landing cost and little profit will
never interprete as end user pump price
because at that level, the Govt will lose its
local standi on asking for a price crash.
The new players will meet various degree
of obstacles and fustrations from the cabal
and kick backs paid to this stinking PDP
administration
The only reason it is stable at 65 is
because Govt is paying for it once that is
removed, you will buy PMS above
250naira/l
wait till iran carries out its threat then Naija is bleeped,
countries find it diffifult to purchase at international rates let alone Nigerians.
Say 'no' to subsidy removal
Say 'yes' to corruption fight
Say 'yes' to accountability
Say 'yes' to the resignation of iweala
Say 'yes' to peaceful civil disobedience
Say 'yes' to enlightenment of the armed
forces
Say 'no' to anything PDP whether or not he
or she is wearing a hat.
An economy without electricity cannever
develop with high energy cost, iweala is
bamboozling her PDP boyfriends not
Nigerians.
If she she can proove the above, lets
debate on Aljazeera 'frost'
Iweala dont be a coward accept this
challenge and convince Nigerians i am
ready for your Invitation.

@ e nice
quote
I support the removal of fuel subsidy 100%
. The problem we have in this country is
NLC. A country should not only plan for its
present but its future. Can we as a country
continue with fuel subsidy indefinately
giving our meagre resources? No.
Therefore, subsidy would be removed at a
point in time. Now who decides when that
time comes, NLC or Govt.? What NLC
should be doing is monitor the revenue
from subsidy and the implementation of
palliatives so that the money is not looted,
Not going on a protest that would further
improvish the masses and benefit the rich
quote

spare us ur infantile radicalism, who told you your country is on "meagre" resources?
your country earns over 140,000,000usd per day on oil sales alone.wot about forex,gas,port taxes etc
it is corruption that soared subsidy to a trillion plus, the 2011 budget had about 240billion as subsidy which the country can afrord.
why do you think the cabal is feeding fat on subsidy? they are actually feeding fatter now from your account. the govt pays about 76 naira per litre but now they can sell anything they like.
the cabals want the subsidy to be removed if you dont know. it doesnt affect them in any way.
Nlc should monitor which palliative?
where will the money come from? are you a baby? there was no provision for any palliative in the budget so which money should Nlc monitor for you?

they want to use the ecr which doesnt make sense because legally, it will be shared between the 3 arms of govt.
the last quarter ecr stood at over 250million usd and it was shared from that moment, the fund disappeared. if you rem, Nigeria makes ecr (excess crude revenue) while the subsidy should go up a bit.the govt is just using ur salary to do its primary function without providing ordinary electricity,health care and security for you.
I have viewed this subsidy removal from all angles and im yet to see a single benefit.
palliatives my foot. now go home and suck b.reast your mum is waiting

@ noble zone

proove that you are not a student recieving pocket money from your dad

lol @ gendebs
I think it started with Ibb his wife is late too. that Aso rock no easy ooo

lol dats wot im seeing here too, my dutch partner said he thinks like a c.unt and looks like a d.ick.
unfortunately our rev is starting on monday in portharcourt streets re deserted peeps wey go xmas no see transport come back NlC says monday so we wait.
some strong men left yesternite for by to join theirs, the iyc presidol na sylva boy so he is mobilizing seriously over there.
no matter how comfortable you are, you cant watch your neighbour die of hunger,moreso all the big boys re running away cos these street urchings will rob the living day light out of them.
its getting sweeter because the big boys here are the ones doing the mobilization so that the urchings will see them as one of them.
jonathan go see policy run.imagine one small station attendant telling a customer " if you cant afford th
e new rate go get work" come see slap wey the boy give am e sound like briggade band, come see fight.
femi falana for Vp, buhari for president. jonathan for youth president.

@ leomax
you are an inflammed scrotal sac. a regime budgeted for 240 billion developed wings and landed on 1.3trillion. instead of doing the honorable thing, jonathan is feeding them more from my acct.
I dont blame you na d the protesters for lagos wey never burn down your office for VI I dey blame make I know where you will be typing that rubbish from.
imagine
taking a second wife because the former misappropriated feeding money.
bingo.

@leo max
continue whinning from victoria island the ss iyc by chapter to join the fight against subsidy.
their mission statement this morning was succint, since their brother jona cannot fight the cabals but wish Nigerians to buy peak milk @ 350 a tin,
they have resolved to burn down all filling stations belonging to the cabals.
dey dia make ur nyansh catch fire, ur father dia

@ chuxyn
fuel subsidy removal is not deregulation as it stands.
the viable arguement that the govt makes over 140million usd daily in oil
export daily is true.
the 2011 budget had 240bn naira as subsidy till corruption finished the
system.
Nigeria can comfortably afford as much as 500b anually. paying subsidy is
not a soln but local production capacity is. oil and gas and telecoms or
airlines buisness are not the same. things will get worse. in the international
market crude is already expensive so what are you deregulating? perhaps
profit margin but the landing cost will still be high and there is no hope in
sight of oil prices going down in the next 5 yrs.
the US naval war college has realeased a statement that it will take 5
months to neutralise iranian blockade at the strait of hormuz should iran
carry out its threat.
that alone will cut off 60% of world oil supply for a while, what will be the
price of crude with 60% supply cut? and how can Nigeria survive those
5months?
rem. that the prediction is not sacrosanct just like they thought they will
finish iraq in 6months but ended up staying 8yrs.
you cant imagine what jona has done till you buy petrol at 1k/l and trust
buisness guys their price no dey come down.
let me remind you that this stock of pet.products had subsidy paid on them
and people are selling as much as 150,
check oil price as we speak the next consignment will come almost 200bucks.
deregulation will only work in the oil industry if you have the structure that
support it.
jonathan is not smart, if he can guarantee cheap oil in this country, a lot of
investors must come to build refineries.
did you remember when people were saying that Mtn wont survive the
nigerian mkt because of lack of electricity?
what happened ?the natural Nigerian mentality plus corporate patronage
blessed them.
if Nigerians had angolean mentality, mtn wont stand a chance cos the
exploitation was glaring.
dont tell me abt the airline industry,Nigeria till date still has one of the most
expensive air services in the world.
if your idea of degulation is high price then u dont have a point.
competition forced telecom price down, in oil lifting, it is a different ball
game the landing cost must be high since crude is already expensive in the.
intl market.
I feel sorry for Nigerians, we love hearing stories pls lemme remind you that
jonathan has a lot of fair options, this is extreme, a corper I saw today was
begging for transport to make it back to the east.
jona decieved us with saving money. where is best to save money if you are
in his shoes?
run an expensive govt or take food from the poor?
I am yet to see the sagacity behind this subsidy removal if he cant fight
corruption there in. is jonathan saying that should corruption creep into the
subsidy funds implementation regime he will scrap it again?
jonathan sounds like a college boy.
where will he get the money to implement his palliatives? every sector of the
economy has been budgeted for
or are we paying diff for govt functions? I dont just get it. where did
obasanjo get this daft from?