so the pms daily consumption figures you provided does not include those sold at NNPC mega stations.

Karl max
You are doing what we call “jomo to the answer“ meaning you rig the figures to arrive at a pre-defined answer.

You provide very dubious statisticsto arrive at N1.3 trillion.

Where did you get the 8million daily consumption of kerosene per day. Do we now use kerosene to drive cars or generators? Even the total daily consumption would not be much higher than that. Most of last year kerosine was not even always available at the filling stations and there were very few stations selling kerosine.

Your average price of crude for 2011 was highly exaggerated to support your figure, the average price of crude has hovered around the $$90 mark for the last 3 yrs. Same for the exchange rate, it has hovered around the N150 per dollar mark under sanusi.

With all these you did not even bother to tell us the grade of petrol you are quoting. We get all sort petrol at the petrol stations, some are pink, some are almost red, while some are white. I suspect that most of the petrol we buy is mixed with ethanol because it burns too fast.

I wonder why you convienently choose to ignore products produced in our refineries, I know people who get kero from warri refinery.

Efisher, of course it is obvious that to refine petroleum locally is infinitely more beneficial than importing. But is self sufficiency a main policy of government?

If the govenment had defined its economic philosophy, then it would be easier to put this subsidy removal into perspective.

For example if its main policy is self sufficiency and not import dependent policy we had been operating for a long time now, the govenment should have been putting the necessary structures and policy in place.

The deregulation of the oil sector is hurriedly and shabbily done with no enabling law backing it, no definable goal except to raise more money for the various governments.

As I explained, deregulating the oil sector in isolation would only lead to inflation, which would further push up the cost of doing business in Nigeria and making more businesses relocate outside the country. Even the US has the problem of companies relocating to south east Asia because of cheaper production cost.

Also, if we continue to import petroleum, toothpicks, matches, rice, cooking oil, sardines, clothes and in facts almost everything else, then the naira will always continue to fall, then we will come back here a couple of years later, we would be talking of subsidy again.

Also please tell me what will happen when Iran and us start the almost inevitable war coming up.

Efisher, the policy holds no benefit at all under the present conditions.
Already cost of production in Nigeria is to high because of lack of basic infrastructure, multiple taxation, very high interest rate, lack of adequate manpower, inadequate and corrupt regulatory agencies, corrupt judiciary, etc. All these are the reason it is cheaper to import toothpicks or candle from China even when we have the raw materials.

These are what the government should have taken care of before deregulation.

even with deregulation it would be more efficient to import than spend $2billion building a refinery unless the price of crude is highly subsidized by legislation.

Efisher,

That is why we feel the rush to remove fuel subsidy is an attempt by Jonathan and his cabals to sweep this fraud under the carpet, so as to get away Scot free with their trillions. The scam has gotten too obvious for them to continue the way it was going and besides, it was beginning to hurt the economy.

I feel they are black mailing us into submission so as not to ask how the so called subsidy made a quantum leap without a corresponding leap in economic growth

Other questions;
How come Okonjo Iweala did not account for local production of oil, even if the refineries are working at 40% capacity.

Can the atlas cove handle the discharge of 30 or is it 40million litres of petrol (not to add kerosine and diesel) per day?

We need accurate data

Efisher, the most practical solution would be to eliminate or at least reduce the corruption first, and then give us the correct figure of the required subsidy. The govt would then be in a better position to negotiate. Removal of subsidy would not eliminate corruption, over-invoicing, substandard products and smuggling as oil will always be cheaper in Nigeria.

The government had decided to work the other way round.

The government should have done lots of things before hand and removal of subsidy should have been the last thing

The minister of petroleum is speaking on the subsidy issue now. Turn to channels and then comment

http://www.channelstv.com/global/live_video.php

My demands
1. Revert the price back to N65 first, since Sanusi said the government can afford to subsidize till 2015, so the economy would not crumble immediately.
2. Carry out a thorough investigation of the oil subsidy scam. Being in international auditors and investigators since we cannot trust the establishment or in the alternative bring in Buhari, falana and rev. kuka to the team.

Prosectute and jail all those found guilty to be in involved in the scam.

4. Rehabilitate the existing refineries and publish the price at which crude would be sold to new private refineries.

5. establish mass transit system, ie railways and water transportation.

6. improve electricity generation, transmission and distribution. Not the usual rhetorics.

After all these is done, the government can then go and remove subsidy.

he fuel subsidy scam is the greatest scam that has ever hit Nigeria, under the GEJ government, it has been elevated to another level. The scam involves NNPC, DPR, PPPRC, customs, CBN and others. First examine evidence of this day light robbery of Nigerians;

1. How come our fuel subsidy jumped over 600% in one year, from about N240billion to over N1.5trillion? Even with adjustments for increased crude prices, inflation and exchange rate fluctuations, the amount is criminally unrealistic.

How did they arrive at the N1.3 trillion for the 3rd quarter of this year? If we use their statistics, it does not add up. Even if we used the highly inflated figure of 40 million litres a day consumption and a N75 subsidy (assuming the price of petrol is static in the international market for the whole year), the total subsidy paid per day would be N75 x 40,000,000litres = N3,000,000,000 per day, which equals N1.095 trillion per year. How then did they arrive at N1.3billion in 9 months?

3. What happens to the oil produced by our Three refineries, which is said to be working at 30% capacity. Is NNPC also paying subsidies on them?

Does the Apapa ports have the capacity to discharge 40million litres of petrol per day? ( not to talk of diesel and kerosine).
Does the NNPC have the capacity to store 40million litres a day. They say they have enough storage for over 2 months, which would require storage of over B2.4billion litres. Where are the storage tanks?

Which grade of petrol is the N75 subsidy being paid for? And what grade is being sold to us now?

Ypzilante
How can men of God condemn the present situation, don't you know that the current hardship in the country is good for church business? There is a straight correlation between poverty and religiousity as men seek divine help to solve simple problem like maleria, fertility issues, and other Poverty related issues. The more hardship there is the more despirate the people, the more they are susceptible to exploitation by men of gods, alfas, Babalawos and all manner of shaman.

There is no savings whatsoever from removal of subsidy. In the last budget government allocated about N220billion but ended up spending close to N1.5trillion, so where did the balance come from? If there is to be any money to be expected from fuel subsidy removal, we would have seen it in the expected revenue projection of the budget.

As for me let them have 100% of their salaries, the problem is the allowances and unnecessary aids. Let the governors cut their security votes. The president's and governor's security votes can take care of the subsidy if corruption is reduced in the NNPC.

^^^
I sincerely feel for you, you are a really brave guy, you took a huge risk by marrying and having unprotected sex with a woman. you really need legal advice, Nigerian lawyer not British lawyer, who understand how the Nigerian system works.

@ OP, the issue of going to a carnival against your orders is a very minor offense, especially if she is socially and emotionally attached to the event, since you said she never misses it. I am married and my wife is sometimes very stobborn, when she goes against my wishes I avoid her for days, then when her head comes down, we sit down and discuss it. She would apologize and we make up, until she becomes irrational again. The good thing is the frequency of her stobborness has greatly reduced. I think you should make some compromises yourself, why not go with her on one occasion to see why she is so attached to the carnival.

You come across as a stiff, boring effico. why is it that it is mainly your wealth that is on your mind. I hope you did not use your wealth to attract your wife to marry you? If you did, then your relationship was not based on love. Have you not wondered why very rich people get lots of sex but no love?

My own take is if you believe your wife truly loves you, I suggest you work things out with her, but if you truly believe she just want your money, then move on.
@ clarmont

You would make a bad judge, you have already found the wife guilty without hearing her side of the story. She might have her own complaints against our brother here too. It is best not to take sides and see what help you can render both parties.

I do not think you should rush things or make hasty decisions. I believe divorce should be a last resort. I do not like the fact that you threaten her with divorce over minor disagreements. Since you must have loved her before you took her to the alter, you must at least give the marriage a chance. I suggest you two should sit down and pour each others heart out. You should tell her your grievances and let her pour out hers. There might be something that makes her behave the way she does, maybe it is distrust or something she was told by another person. If she had not been unfaithful, then she must still respect the marriage.

But if everything fails and you feel divorce is the only option, you should also not rush things, talk to your lawyer. Nigerias divorce laws is not as stringent as those of the UK or US. She is only entitled to get the house she is living now and maybe another one purchased during the marriage. Changing the papers might bring in its own complications as you do not know what plans she has, she might have made copies of them.

Then you have to think about your child, he might be too young to be away from his mother and I am sure with your schedule, you will not be able to provide parental care for him.

My two litres

Beaf,
You are just arguing for the sake of defending Jonathan no matter what. I am also from the niger delta but I see no difference between OBJ, Yar adua, Shagari or even the Military jauntas in between. Jonathan has not brought anything new, we have been hearing of removal of subsidy, privatization, liberalization, generation of so many MW of electricity, etc, since IBB days. So believe me subsidy removal policy is not a masterstroke as you want us to believe.

You are also deaf to the other side's reasoning, what we are saying Is;
1. Stop corruption or at least reduce corruption within the oil industry, then we can actually know what the actual subsidy is and then discuss its removal or not.

2. Have proper laws governing the petroleum industries so we can know who is responsible for what in the oil industry.

3. Put in place necessary structures like alternative transportation means, adequate power and alternative energy sources before you deregulate fully.

On the argument that people should hold their local and state government accountable, you choose to forget that we are operating a unitary system, the federal government control the police, electric power, petroleum and mineral resources, almost everything. The feds determines if and when you will enter University. In fact asking people to hold local governments is a joke, the local governments are just errant boys of the state governments, they get their funds from the state and are appointed and sacked at will by the governors.

Face,
I enjoyed reading your above depositions and I totally agree with your analysis, my only disagreement is with your conclusions.

I agree that china was able to develop her industries because of superior technology and energy efficient systems. But the problem is we are seriously lacking in these two vital ingredients, first our manpower development is very poor as can be seen in our comatose educational system, and the few bright sparks we produce are stolen by the US, UK, Canada,and even the Arab states, so we are seriously lacking in technology.

In terms of energy, today we are struggling to generate 4000MW of electricity, We are importing almost 100% of our fuel requirements, we have not developed our abundant gas for domestic consumption, so we are seriously lacking in terms of energy for industrial take off.
so you see these two items have to be in place before deregulation can have a favorable effect. If they see not in place the cost of production of any good (including fuel) would not be able to compete with foreign imports.

I also agree with you that no country should be foolish enough to allow its currency to float, the same also applies to energy especially petroleum. All countries have mechanisms to control the price of petroleum and most western nations are ready to go to war to have some control on the price of oil.

Your projected price of petrol is wrong, please do google products produced by a barrel of oil. You will see that a barrel of oil will at best give you only 20% petrol and not 100% as given by you. So at $100 per barrel, the price of petrol should be between N140 - N160 assuming all other products and bye products see also sold. If the price of crude jumps to $110, then the price of petrol should be between N160- N180. And even at that the refinery would only be making marginal profit.

Please stop grouping Boko Aram with these other groups. BH is a terrorist group. They bomb innocent people. They have nothing to bring to the table

My brother forget the rhetorics, you cannot defeat Muslim militant organization by military means, ask the Americans, at the end of the day they would negotiate with the Taliban. You can also ask the Egyptians or Algerians who banned Muslim organization over 30 yrs ago, today they have been allowed into the political space.

Boko Haram has perceived grievances, that is why they are ready to die for Their courses, a round table discussion will even afford us the opportunity to know those grievances, and then see if we can negotiate or if they prefer to opt out of Nigeria.

Even when the niger delta militant were bombing, many innocent people were bombed and shot in port harcourt, bayelsa, delta and even Abuja and Lagos, and today they are enjoying amnesty.

This removal of petroleum products raise fundamental issues in Nigeria that can only the resolved by a Sovereign National Conference, lik;
What form of government shall we operate, the present presidential system which is very cumbersome and expensive and distant from the people or a leaner and cheaper paliamentary system, we can then discuss the component parts and how it would be divided.

Then we need to discuss the economic system, wether capitalist, socialist or a mixture. Who controls the state resources and what is their obligations. It is morally wrong for the government to control all state resources and then not give them any obligation and ask private sector to provide services.

What is the extent of autonomy given to constituent parts, ie police, power, taxes, etc.

Until these issues are resolved we will continue the way we have been going no matter who is in Aso Rock.

Face, please explain how the increase in the domestic price of petrol will develop the oil industry.

I hope you keep in mind the argument for SAP and liberalization, that allowing the exchange rate and thus prices of imported goods to market forces will develop local industries.

Today the CBN still control exchange rate and local industries going under.

Mr londoner, please I would like us to get the issues straight and not digress unnecessarily. The issue at hand is the more than doubling the price of fuel overnight and unannounced, that is a shock to any society in the world. Would London remain the same if such thing is done?

The Niger delta crisis was armed rebellion against clear injustice, it was not a protest and they (the militants) did not invite others to join them. Even though wole soyinka was a actively in support.

This is an issue that will further pauperize everybody but the elite who do not pay for services anyway, so we must mobilize and ask for our rights. The purpose of government is not to build roads, houses, bridges, airports, etc, but to ensure the
welfare and happiness of its citizens. If the citizens are unhappy, then whatever you build is useless.

So in conclusion, the demand of everybody is first a reduction (if not complete elimination) of corruption and affordable transportation (persons and goods). Then later we can discuss how we intend to live together under the Nigerian state, by we agreeing of a constitution instead of living under a decree.

Boko haram, niger delta militants, OPC, MOSSOB, etc can bring their grievances to the table.

Dmainboss, what exactly are you saying? You want out of what? I hope you are not talking of succession, because the Niger delta cannot survive as an independent state. There are to many tribes and tribelets. That would be anarchy as I cannot imagine Ijaws and Itsekiris in a single state (alone) not to talk of a single country.

I am sure you that is talking do not have a drop of oil in your land. My own village has 13 oil wells - untapped, so I should want my village to be independent more than you

Beaf, it is unethical playing the ethnic card, it will only create animosity from other tribes.

Do you know the ethnic composition of the protesters in Lagos, Ibadan, Ilorin and Abuja? Or are you saying no body from the Niger Delta is among the protesters?

People are protesting on a personal basis, that is how the fuel increase will affect them, and not on tribal basis or because Jonathan is president

The OP and others are mixing things up. The protesters are protesting against increase in price of petrol and not anything to do with the price of crude. Even in other countries that do not have a drop of crude, there would be mayhem if the price of petrol is doubled unexpectedly overnight. If the UK government tries it the way Jonathan did it, it would be gone by the next day.

The fact that the people of the ND had not protested does not mean they will not, it is probably due to the fact that their leaders (civil rights leaders) are still on holidays and so there is no body to mobilize the people.

Courage99
On the profitable of the refinery business we are in agreement that it it's profitability is long term - and that is in the western nations where you have favourable business climate. In Nigeria, with interest rate running at around 20%, 5% VAT, taxes from local, state and federal agencies, highly corrupt regulators and an alphabet soup of regulatory agencies, labour and union issues, community relations, and most importantly a volatile international price of crude, a private refinery would not be profitable.

The us examples you quoted do not exactly reveal the truth, the us gets crude from multiple sources, from their crude reserves, from OPEC like nigeria at international prices and a lot of under hand dealings with friendly gulf countries like Saudi Arabia and Kuwait (remembers it was the selling of cheap oil to the US that angered Saddam to invade Kuwait). So the US government ensures its private refineries obtain cheap crude.

Finally is it the private refineries that ensures the US has enough crude reserves to last over 20 years? No it is the government. So the private refineries are sure of supplies for the next 20 years, but in Nigeria if there is a major catastrophe like a world war, crude supplies shut down immediately. NNPC cannot even store crude reserve for one year because of corruption, the same corruption that cannot allow government to operate refineries.

I am sure that even the so called private refineries if they are set up at all would be set up by national oil corporations of other countries and not necessarily private individuals or corporations.

Contrary to what the government wants us to believe, there is no where in the world where the price of fuel is left to the vagaries of market forces. The us governments over the years had been actively involved with oil politics in order to regulate the price of fuel. So much so that the government spends billions of dollars if not trillions in wars to ensure they have access to cheap crude for its citizens. Russia is even worse, they arbitrarily determine the price of petrol and gas and sell to other European countries at what ever price they choose. They even inflate prices to countries that is not towing their line.

Refineries is not a profitable business, it is mainly used as a political tool, a form of tax tool or a social security tool, depending on the goals of the government. No private person will invest 200 billion dollars to build a medium sized refinery with the very long pay back time. they would rather invest in stock markets or government bonds.

The Nigeria government cannot and I repeat cannot shy away from directly being involved in refineries. They should earn their huge pay for a change.

Knowall, you are also just hypothesizing like the government instead of supplying us with fact supported with concrete data.

How much oil is actually being smuggled across the border?

What is the total fuel consumption of Benin Republic, Niger, Cameroon and Chad all out together? How many cars are in these counties?

How come Ghaddafi's Libya was able to supply cheap petrol to its citizens without smuggling to neighboring countries?

Then how much oil is actually consumed in Nigeria on a state to state basis?

If we have these figures, it might even be a good international relation policy to supply subsidize oil officially to neighboring countries,as a control mechanism, the way the west use loans via IMF and World Bank as a way to control other nations.

The govenment needs to provide us with accurate data before I can be convinced that we are not being duped. So far the government just reel out figures without any data to support it.

They should tell us who, how much and quantity of petroleum supplied by the marketers.

The should give us data of petrol supplied go distributors on a state by state basis to justify their 35million litres a day daily consumption (or is it 40)

They should tell us the quantities our refineries produce and what happens to the balance of 425,000 barrels for local consumption.

I agree that Lagbaja's assertions and conclusions are at best utopian.

I think the government is using the smuggling argument to dupe us. How many litres of oil do the neighbouring countries consume. I am sure that the total consumption of all neighbouring countries is not up to half of what lagos consumes. So smuggling cannot account for the astronomical increase in subsidy bills.

Basic ecomonic state that the strength of you currency is determined by it demand, based on goods exported abroad. But with the removal of subsidies, we will only spend more money buying the same quantity of petrol, that is inflationary. Inflation will lead to further devaluation of the naira and one year down the line, the proposed price of N140 would be unrealistic and the need to remove subsidy again.

The main problem is not necessarily the cost of crude, but the fact that each time we increase fuel prices, the naira loses value and make nonsense of the increase when denominated in dollars

As you said everybody is in involved with the art of lying including the vanguard write up you quoted. There is no way coconut oil would be cheaper than fossil fuel as an alternative oil. The cost of land acquisition, growing of coconut, harvesting, processing and extraction of the coconut oil would be huge. If our petroleum engineer is so good at extracting coconut oil, he should sell it at international price. I can imagine what a litre of coconut oil will cost. Besides you would need external energy to process the coconut and extract the oil.

Although I do not subscribe to nigerians having crude at N0, I also do not subscribe to it being sold at international prices. At international prices no private refinery located in Nigeria would be able to compete with those located abroad, because of gross inefficiencies in the nigerian environment and the all mighty Nigerian factor. Marketers would still be forced to import, with serious consequences on our exchange rate and inflation. I would recommend government sell crude for domestic consumption at the same price we use for our benchmark in the budget which is about $70.

The actual cost of petrol would depend on how much NNPC decides to sell the crude used for local consumption, either refined locally or by foreign refineries. If it is sold at the current $105 - $108, then the price should be about N160. But if it is sold at about $50 then the price should be around the N65 mark.

So we need NNPC to tell us how much they produce one barrel of oil and how much we Nigerians should buy it.

Sorry for the errors in the OP, it is because I am using a mobile phone to post and I have a very small window to see what I am typing, also you cannot modify or edit a post after posting.

Having said that, what I am quarreling with is the boasting by out government and citizens that we are the forth largest producer of crude in the world when we are actually the 12Th. I am also annoyed at our stupid policy if being proud of being one of the largest exporters when we have not been able to refine and meet our domestic consumption. I think nigeria is the only oil producing nation that export almost all of its oil production and depends on others for out fuel needs.

If the government says it cannot build and maintain refineries, then we should ask who built and maintain the refineries in other oil producing nations?