₦airaland Forum

At this rate, I have said if anyone is looking at a criminal enterprise, look no further than the fuel subsidy,” the minister said.

Nigeria’s Minister of State for Petroleum Resources, Timipre Sylva, has described the Nigerian government’s controversial subsidy regime as “a criminal enterprise.”

Mr Sylva, who lamented the controversies surrounding the amount of petrol that the nation consumes daily, said the subsidy regime encourages criminal activities like smuggling which in turn impact negatively on the nation’s oil resources.

According to Punch newspaper, the minister said this in an interview with his media team, led by his Senior Adviser, Media and Communications, Horatius Egua.

“I have said this publicly before that I don’t know the figure,” he said of the opacity surrounding Nigeria’s petrol consumption figures.

“When I assumed office, initially I was told that our daily consumption was 66 million litres.

“Then, when fuel prices increased from N145 to N162, the consumption figure temporarily fell to about 40 something million litres per day, because the arbitrage opportunity reduced.

“Then the value of the naira dropped again, and the number went up again to over 60 million litres. I am told the figure sometimes rise to as high as 90 or over 100 million litres. I don’t know how that happens.

“At this rate, I have said if anyone is looking at a criminal enterprise, look no further than the fuel subsidy.”

The minister said that on the basis of these revelations, he has intensified his advocacy for deregulation and ultimate removal of fuel subsidy from the country’s PMS pricing template.


‘Unknown’ Consumption Figures

In recent years, experts have said that Nigeria’s inability to account for the amount of petrol it consumes daily was due to the continued smuggling of PMS through its porous land borders.

In 2019, Nigeria shut its land borders as part of government’s sustained efforts to check smuggling and other illicit cross-border activities.

Despite the closure of the land borders, reports showed that smuggling was still rampant across the nation’s borders.

In December 2020, President Muhammadu Buhari approved the immediate reopening of the major land borders in Seme in the South-west part of the country, Ilela in the North-west, Maitagari in the North-west, and Mfun in the South-south.

Mr Sylva said that as of today, the nation cannot still tell the exact volume of petrol it consumes on a daily basis.

Speaking in reaction to the N3 trillion fuel subsidy proposal by NNPC, he said: “I would have preferred that this question be directed to the NNPC.

“I have made my views known about this issue in the past. NNPC has agreed with me that they are not certain about the exact consumption figure.”

Mr Sylva argued that the country’s petroleum products are smuggled out of the country, so neither the ministry nor the NNPC could give a definite figure.

“It’s more or less fueling a criminal economy. The NNPC imports the products, and nobody knows the exact destination of the products at the end of the day,” he lamented.

“The imported products come to Nigeria, and from there filters out of our borders to neighbouring countries.

“So, as a country, we cannot tell the exact volume of petroleum products that we consume on a daily basis. All we have been doing is to assume the level of consumption over a period and work with that.”

Mr Sylva said that Mr Buhari had done “everything” to resolve the issues, including the closure of the country’s borders with neighbouring countries, yet the criminality was not stopped.

“The truth is that what the President could do was to close the ‘formal’ borders. What about the illegal routes?,” Mr Sylva quipped.


Scarcity

Fuel scarcity worsened across Nigeria in recent weeks despite repeated assurances from the government that the crisis would not linger for too long. The scarcity and its attendant chaos were initially said to be as a result of an off-spec product imported into the country, which reportedly damaged vehicles and generating sets.

As the NNPC and regulatory authorities struggled to put the situation under control, queues persisted in Abuja, Lagos and several other cities for weeks as people scrambled to get petrol for their cars and their electricity generators at a time of rising temperatures.

The crisis, which lingered for weeks — and in some places like Abuja, for several months — continued despite the federal government saying it has sufficient stock of petroleum products for distribution across the country.


Way Out?

Relative normalcy has since returned to filling stations in places like Lagos, but residents of Abuja have barely experienced any sense of relief. In other cities like Ibadan, Osogbo and parts of the South-east, petrol stations have continued to sell at different prices ranging from N170 to N210.

As a result of these developments, although the government has maintained that the recent crisis was due to the ripple effect of the importation of off-spec petrol, some Nigerians on the streets and across social media platforms claim that the chaos was “orchestrated” as a means of removing the subsidy component of fuel prices.

The subsidy debate is one of Nigeria’s most polarising public discussions. Earlier in the year, Mr Buhari suspended the government’s plan to remove subsidies on petrol.

In January 2012, protests erupted across the country when the government of former President Goodluck Jonathan introduced the idea of removing petrol subsidy. While the government and other policy experts argue that subsidy is not sustainable and should be removed, civil society organisations and labour unions have always stood against the move.

Mr Sylva argued that if the subsidy component of the oil pricing template is taken out through deregulation, smuggling of PMS to neighbouring countries would cease.

“Of course, we need the market from there. But now we are punishing ourselves because every litre we import at our expense will always find its way outside the country,” he said.

“Now, the government is trying to subsidise our citizens so that our people will at least get the benefit of the subsidy on petroleum products. But, now because of how our borders are, it is very difficult. Now, we are inadvertently subsidising the whole of Africa. This is the thing we cannot handle.”

PREMIUM TIMES

Both the Minister for Petroleum and the junior minister should be bold to tell Nigerians why subsidy removal has become intractable and a hard nut to crack.

In 2012 when the subsidy was to be removed by the then government of Jonathan, these charlatans convinced Nigerians that there's nothing like subsidy and made Nigerians matched the streets resisting the removal, now all we got is lamentations and more lamentations in the face of hopelessness.

This is literally unnecessary

Nigeria couldnt account for the number of deaths during the end sars protest talkless of the litres of fuel Nigerians consume per day.....

Maxymilliano:
Both the Minister for Petroleum and the junior minister should be bold to tell Nigerians why subsidy removal has become intractable and a hard nut to crack.

In 2012 when the subsidy was to be removed by the then government of Jonathan, these charlatans convinced Nigerians that there's nothing like subsidy and made Nigerians matched the streets resisting the removal, now all we got is lamentations and more lamentations in the face of hopelessness.

While you are right at the bolded, the hard and cold fact is that, take politics away, take PDP and APC and GEJ and Buhari, and so on away, and Nigerians would not, will not , support subsidy removal.

The reason why Nigerians protested in 2012 was not because of Buhari and company manipulating them, it was because fuel prices went up from N65 to N140. That is all Nigerians saw, not the potential increase in domestic refining, and the new refineries that could result.

Every time subsidy removal has been on the table....Nigerians have said no. That's why even people like Obasanjo, and strongmen like Abacha never ever contemplated totally removing subsidy. All they did was partial removal.

Try putting up a thread on this site about subsidy removal. You would be cursed from one end to the other. Even now, subsidy removal means that fuel may end up costing N400. Or more. You would be accused of bringing hardship on Nigerians.

You can't make friends with everybody. You're to follow peace with everybody.
Know this and know peace...

I thought buhari said there nothing like fuel subsidy? Abi him be presidiot?

Being runned by the chief criminal himself, you and the gang of criminals that vehemently denied subsidy but continued the corruption when in government. Idiots!

Islie:
At this rate, I have said if anyone is looking at a criminal enterprise, look no further than the fuel subsidy,” the minister said.




PREMIUM TIMES

Same liars that call subsidy a fraud and went to Ojota and fountain to dance!

Fool..aren't you too?

Basically what the minister is saying is that subsidy is chopping our money everyday

But let's be honest, in 2012, we could have gotten rid of subsidy. We could have gotten rid of it even earlier, but everytime we say that we are helping the poor.

Countries that subsidize fuel have issues with budget deficits and so forth...because they spend a lot of their dollars subsiding fuel, instead of paying for new refineries and repairing existing ones...and making more dollars as a result.

Nigeria, as a result of subsidy...has been losing a lot of money because of the inherent corruption in the system, fueled by smuggling, and stealing. ...fuelled by the fact that the subsidy regime does not allow people to make a profit.

Either subsidy goes, or we go into more debt paying for the thing, and lose billions and keep losing billions.

MODIFIED

However, my pro-subsidy resolve was badly damaged in December 2009 following the “confidential briefing” I received from an industry player who was pushing for full deregulation of the downstream sector. In one of the most frightening briefings I have ever received on the economy, the man took me through the sordid details of how a few people milk the treasury in the name of subsidy. “Whenever you hear that the government has spent N500 billion on fuel subsidy, discount it by at least 60 per cent,” he said. “Fuel subsidy is the biggest fraud in the history of Nigeria.”

He listed three aspects of the “subsidy fraud”. One, he said a fuel importer could bring in 2000 metric tonnes and claim subsidy for 8,000 metric tonnes. “The mark-up will be shared down the line,” he said. “Even if you are a pastor, you will fall for it. The money is just too much. Imagine the billions of naira available to be shared on a regular basis. So the regulatory system is compromised and weakened.” Two, he said NNPC always imports more than it has storage facility for. “So the product is stored at private tank farms. If NNPC stores 30 million litres with your farm, you don’t have to account for 10 million litres. There is a process by which you can account for only 5 million litres as long as you know how to share the proceeds of the remaining 5 million litres with those who matter.”

I jumped up, transfixed, mouth agape, arms akimbo. “Relax, Simon, relax,” he said, sarcastically. “I enjoy reading your column, but your problem is that you write too much about ideals. Nigeria is not an ideal country. There are many things that are unheard of all over the world that you will find in Nigeria. What works perfectly in Saudi Arabia and Norway will not work here. Ask yourself: how come our refineries have not been working for ages? Name another country that has four refineries that hardly work. Do you know how many emergency billionaires we have produced through turn-around maintenance contracts in the last 20 years?”

He finally listed the third aspect of the fraud. Listen to him: “When they tell you the landing cost of petrol is N100 and the pump price is N65, it means the importer will get subsidy payment of a little over N35 per litre. Now, that is another fraud. There are different grades of PMS (petrol). They do not go for the same price. In the UK, for instance, the price of leaded petrol is different from that of unleaded. In Nigeria, we don’t distinguish between grades. We pay the same price. So the landing cost of the lowest grade may be N75, but the importer still gets a subsidy payment of about N35 instead of N10 per litre. Do the math. Multiply that by millions of litres everyday and you will understand the fraud. Remember too that the importers get paid for demurrage even if they don’t incur it. I can go on and on.”

To cap it all, he said: “Simon, I can tell you authoritatively that our daily PMS consumption is not as high as officially quoted. It is the biggest fraud ever. We keep calculating subsidy on the assumption that we consume 40 million litres a day. Remember to always discount the official figures. It is good for your health.”

Source: Simon Kolawole : Fuel subsidy and fake subsidy. (2011)



N.B: Abuse will be dealt with appropriately, also, rhetorical questions won't be answered.

Good morning timipreye silva

We have heard more than this from your bosses.

A

He's a party to all the criminal activities going on there... His fat cheeks is proof.

I won't be surprised if he's stolen more money than madam Diezani

Who is the current minister of petroleum?

Who says they wanna fight corruption?

At last all of una go get sense for this country

Goodluck was right and Buhari is dumb! Took Nigerians many years to realize this!

I had never been that sober in my life. The fear of God gripped me. But I gradually summoned courage and asked: “But can’t government do something about these fraudsters? Can’t they be thrown into jail? Why should Nigerians be punished with higher fuel prices because a few people are abusing the subsidy regime?”

He sighed. “What government? In a country where you can actually swear to an affidavit that you are President Barack Obama and, with a N200 bribe, the document will be stamped in court? You think these people are stealing this subsidy money without the involvement of government officials? And you think one government official will turn down N50 million just to sign a document that says you’ve brought in 10,000 metric tonnes of PMS? Are you kidding me, Simon? Are you saying you don’t know that fuel subsidy is the easiest way for government to fund patronage and reward its friends and loyalists?”

Sensing that he had subdued me, he declared: “The way forward is total deregulation. Free the market. Let anybody who wants to bring in fuel bring it in at his own cost and charge the market price. The money government is spending on fake subsidy should go somewhere else that will help develop the country. That is what you should be fighting for. Unfortunately, those of you who keep fighting for the retention of fuel subsidy don’t know that you are playing into the hands of the cabal that milks the treasury of billions and billions of naira every year.”

Source: Fuel subsidy and fake subsidy. Simon Kolawole 2011.

Still applies today.

Which Buhari is part of.

tekjansen2:
Basically what the minister is saying is that subsidy is chopping our money everyday

But let's be honest, in 2012, we could have gotten rid of subsidy. We could have gotten rid of it even earlier, but everytime we say that we are helping the poor.

Countries that subsidize fuel have issues with budget deficits and so forth...because they spend a lot of their dollars subsiding fuel, instead of paying for new refineries and repairing existing ones...and making more dollars as a result.

Nigeria, as a result of subsidy...has been losing a lot of money because of the inherent corruption in the system, fueled by smuggling, and stealing. ...fuelled by the fact that the subsidy regime does not allow people to make a profit.

Either subsidy goes, or we go into more debt paying for the thing, and lose billions and keep losing billions.

MODIFIED



Source: Simon Kolawole : Fuel subsidy and fake subsidy. (2011)



N.B: Abuse will be dealt with appropriately, also, rhetorical questions won't be answered.

Even our so-called population figures are false. I laugh each time i read posts bragging or quoting how many we are in Nigeria.

Politicians are not doing us good.
They are using and dumping 9jirians as they like.

I thought buhari,mannagrills and trutharena said there isnt nothing like subsidy

See who is talking

Maxymilliano:
Both the Minister for Petroleum and the junior minister should be bold to tell Nigerians why subsidy removal has become intractable and a hard nut to crack.

In 2012 when the subsidy was to be removed by the then government of Jonathan, these charlatans convinced Nigerians that there's nothing like subsidy and made Nigerians matched the streets resisting the removal, now all we got is lamentations and more lamentations in the face of hopelessness.

people like you were planning to protest when buhari wanted to removed the subsidy early this month.
The marketers are the evil idiots that don't want this subsidy to be removed, they deceive poor Nigerians that Buhari wanted to increase fuel price .
Pdp and wailers begin to mobilize illiterate Nigerians for protest that they know nothing about.
The moment Dangote refinery start production,these marketers will not get one kobo from federal government again.
These major marketers are the problem of this country, they are doing everything possible to see that our refineries are not functioning well. They sabotaged every government that want to make our refineries working.