₦airaland Forum

rickpat:
I laugh when I hear this subsidy removal talk...a Nation where petrol is a necessity and not a luxury..a Nation where no good transport system,that everyone must get a car...a Nation where no electricity, everyone must get a generator, businesses etc. ..you want to remove subsidy over claims that people steal the money....in organized society that there's subsidy for stuffs,won't they fish out anyone stealing the funds and prosecute the person?..will they remove it cus if some corrupt individuals?...Nigerians go still dey join the POLITICANS and their talks... subsidy will be removed, petrol goes to 400 or more... inflation hits Nigerians harder.... POLITICANS will have more funds to steal(because that's the only reason subsidy is to be removed,so that they will have enough funds to steal and run the luxurious government and luxurious life style of POLITICANS)..

Good luck nigeria...THE EARLIER NIGERIANS KNOW THAT THESE CROOKS DONT GIVE A DAMN ABOUT THE NATION,THE BETTER FOR EVERYONE

Any presidential candidate that thinks he can remove petroleum subsidy without first resolving the issues you mentioned, would not last the subsequent 3months in power.

IbeOkehie:
Well, the world price of petrol is around ₦‎450 to 500/litre and Nigeria is part of the world

Most people want to get their fuel for free, but that's the actual, real price. Same as there's a real price for garri, house rent, slippers and satchet water and car tyres. Yes, everyone wants them for free but the REALITY is that SOMEBODY has to pay those who PRODUCE those things so they can make a profit. If government forces them to take prices that are NOT profitable, they will stop producing. Nothing strange there, Nigerians have been experiencing SCARCITY in many government regulated sectors like University education, forex and fuel.

When subsidy is removed, it also means more business people will make more profits, so they will invest in building local refineries to produce more fuel, which will create jobs.

Right now anyone doing fuel business legitimately and according to law is likely losing money. The only way to make money in the fuel business is by CORRUPTION. That's why Exxon Mobil abandoned selling fuel in Nigeria -

https://www.ogj.com/general-interest/article/17250725/exxonmobil-sells-nigerian-retail-business

The equation is simple.

Wholesale price of fuel right now in the USA and on the world market is $0.60c per liter, which is ₦‎240 at official CBN rate and ₦‎430 at black market rate.

Federal Government of Nigeria imports fuel from the USA at ₦‎430 and sells to Nigerians at ₦‎165 per liter. That's a loss of at least ₦‎150 on every liter sold. That is NOT sustainable, it's plain to see. Worst, Nigerians...ordinary Nigerians...buy that fuel at ₦‎165 and smuggle it Cameroun & Benin Republic and sell it at ₦‎450. That's corruption and EVERYONE is doing it, not just government officials.

When Dangote starts selling from his refinery, he has two options - sell to Nigerians at ₦‎165 OR export to world market at ₦‎430. If it was your business, what would you choose to do? The only way he will agree to sell to Nigerians is if the government pays him a subsidy. Which means it's likely fuel subsidies are going to continue, this time as a direct payment to Dangote. Are you comfortable with that?

The point being, even domestic refineries are not a solution as long as price is regulated.

Do you understand that telecoms, broadcasting and banking used to be industries with government regulated and subsidized prices? Can you compare NITEL to MTN and Glo OR Channels TV to NTA?

Are you happy with the current scarcity of forex? The cause is well known - government regulated pricing.

It's a simple thing. Price regulation and subsidies are evil, they destroy jobs and promote scarcity of products and services. Be advised.

Government can give Dangote tax concession etc. You mentioned business men will make more profit, what about the poor civil servants, teachers etc. Increase in fuel price will increase transportation costs, food costs, the poor worker don't gain from it, the poor worker bears the brunt. It will take away disposable income from Nigerians, and further widen the gap between the have and have nots. Government job is to make life easier for the people.

Talking about forex, Nigeria should stop acute demand for forex, it makes dollars increase rapidly over naira.

danietohbadt:
But the truth is this, you can't remove subsidy if we don't have enough petroleum products locally.

Before subsidy can be removed, then we must have more refineries with enough refining capacities, and they must be productively efficient.
Anything aside that will lead to a disaster.

How much do you think Dangote will sell the petrol produced at his refinery?

Patriotsleague:
Government can give Dangote tax concession etc. You mentioned business men will make more profit, what about the poor civil servants, teachers etc. Increase in fuel price will increase transportation costs, food costs, the poor worker don't gain from it, the poor worker bears the brunt. It will take away disposable income from Nigerians, and further widen the gap between the have and have nots. Government job is to make life easier for the people.

Talking about forex, Nigeria should stop acute demand for forex, it makes dollars increase rapidly over naira.

When you give Dangote tax concession, that's money that should go to healthcare, building roads, maintaining embassies and printing passports and paying police and the military and buying their equipment. The consensus right now is that Nigeria doesn't collect enough tax and you want to give Dangote tax concessions. It's time everyone did a thorough evaluation of their position on subsidies.

Subsidies and price regulation promote SCARCITY and make corruption possible. They deprive government of revenue that could be used for other things, they promote an entitlement mentality. Subsidies and price controls are EVIL, they don't work, they destroy the economy, not just in Nigeria but EVERYWHERE in the world.

You can argue all you want, the truth is - Nigeria will NEVER develop until the general society accept that government is the problem, not the
solution.

Increase in fuel price will increase transportation costs, food costs, the poor worker don't gain from it, the poor worker bears the brunt. It will take away disposable income from Nigerians, and further widen the gap between the have and have nots.

If you go back to 2001 this was the exact same argument against privatization & deregulation of telecoms. NITEL mobile line was priced at ₦‎10,000 circa1998 and only the rich had phones. Maybe you're not old enough to remember, if so PLEASE GO AND ASK...when the government subsidized and regulated phone service, only the rich had phones. Anyone who wanted a phone line had to pay a bribe or know somebody. Go and ask!

MTN started selling their service at ₦‎50,000 in 2001 and now any Nigerian who wants a phone can get one. The vast majority of Nigerians now have access to phone service. This should be a lesson for Nigerians but somehow it doesn't penetrate their consciousness.

Talking about forex, Nigeria should stop acute demand for forex, it makes dollars increase rapidly over naira.

Now this is interesting. I want to eat foreign rice and I want to buy it with money that I made through my own hard work. Why is that a problem for government or any Nigerian?

IbeOkehie:
Well, the world price of petrol is around ₦‎450 to 500/litre and Nigeria is part of the world

Most people want to get their fuel for free, but there's an actual, real price dictated by costs of production. Same as there's a real price for garri, house rent, slippers and satchet water and car tyres. Yes, everyone wants them for free but the REALITY is that SOMEBODY has to pay those who PRODUCE those things so they can make a profit. If government forces them to take prices that are NOT profitable, they will stop producing. Nothing strange there, Nigerians have been experiencing SCARCITY in many government regulated sectors like University education, forex and fuel.

When subsidy is removed, it also means more business people will make more profits, so they will invest in building local refineries to produce more fuel, which will create jobs.

Right now anyone doing fuel business legitimately and according to law is likely losing money. The only way to make money in the fuel business under the subsidy system is by CORRUPTION. That's why Exxon Mobil abandoned selling fuel in Nigeria -

https://www.ogj.com/general-interest/article/17250725/exxonmobil-sells-nigerian-retail-business

The equation is simple.

Wholesale price of fuel right now in the USA and on the world market is $0.60c per liter, which is ₦‎240 at official CBN rate and ₦‎430 at black market rate.

Federal Government of Nigeria imports fuel from the USA at ₦‎430 and sells to Nigerians at ₦‎165 per liter. That's a loss of at least ₦‎150 on every liter sold. That is NOT sustainable, it's plain to see. Worst, Nigerians...ordinary Nigerians...buy that fuel at ₦‎165 and smuggle it Cameroun & Benin Republic and sell it at ₦‎450. That's corruption and EVERYONE is doing it, not just government officials.

When Dangote starts selling from his refinery, he has two options - sell to Nigerians at ₦‎165 OR export to world market at ₦‎430. If it was your business, what would you choose to do? The only way he will agree to sell to Nigerians is if the government pays him a subsidy. Which means it's likely fuel subsidies are going to continue, this time as a direct payment to Dangote. Are you comfortable with that?

The point being, even domestic refineries are not a solution as long as price is regulated.

Do you understand that telecoms, broadcasting and banking used to be industries with government regulated and subsidized prices? Can you compare NITEL to MTN and Glo OR Channels TV to NTA?

Are you happy with the current scarcity of forex? The cause is well known - government regulated pricing.

It's a simple thing. Price regulation and subsidies are evil, they destroy jobs and promote scarcity of products and services. Be advised.

Eggsactly.

Also, re Dangote.

Assuming government subsidizes Dangote, as his production costs go up, so also the cost of the subsidy...meaning more government money going to one man.

And even then, the money might not be enough. The refinery has to be upgraded, expanded, and well maintained to run. We don't produce any of the components in Nigeria. The people making the components want to be paid, and not in naira...so either Dangote demands for more forex from Abuja...or Abuja allows him sell his petrol and source forex without government releasing same to him.

IbeOkehie:
When you give Dangote tax concession, that's money that should go to healthcare, building roads, maintaining embassies and printing passports and paying police and the military and buying their equipment. The consensus right now is that Nigeria doesn't collect enough tax and you want to give Dangote tax concessions. It's time everyone did a thorough evaluation of their position on subsidies.

Subsidies and price regulation promote SCARCITY and make corruption possible. They deprive government of revenue that could be used for other things, they promote an entitlement mentality. Subsidies and price controls are EVIL, they don't work, they destroy the economy, not just in Nigeria but EVERYWHERE in the world.

You can argue all you want, the truth is - Nigeria will NEVER develop until the general society accept that government is the problem, not the solution.



Now this is interesting. I want to eat foreign rice and I want to buy it with money that I made through my own hard work. Why is that a problem for government or any Nigerian?

Where is your contribution to national development and economic growth, we must be patriotic too, and buy local rice, yes I know you have a right, but government too can implement measures to discourage too much imports, and build our local industries. Building an economy is part of government job.

Government can still make money to build hospital etc, but the economy gain more multiplier effects and GDP increases if the people have disposable income, when they buy fuel cheap from Dangote, so tax concession to Dangote refinery has more pros than cons.

We must look at what is best for the economy, so we can build more factories, employ more Nigerians and prosper the greater number. Putting money in the hands of government does not grow economy.

In UK and America, the government subsidies food, healthcare and have good welfare system, in Nigeria subsidy is the only Nigerians enjoy from our common wealth, and it helps the people retain disposable income, which mobilizes the economy.

IbeOkehie:
How much do you think Dangote will sell the petrol produced at his refinery?

Over 50 cents....

Be like say this one no dey Nigeria...wetin bubu don comotwe're currently experiencing the initials of subsidy removal...next

ayenale1:
Be like say this one no dey Nigeria...wetin bubu don comotwe're currently experiencing the initials of subsidy removal...next

If you're referring to me, yes I'm resident in the USA....but I did return to Nigeria to live in 2011, during the last serious attempt by government to abolish fuel subsidies. Now since the subsidies were retained after 2011, how has it worked out for Nigerians? Is the economy better OR worse?

danietohbadt:
Over 50 cents....

Well good, that's a realistic price.

Patriotsleague:
Where is your contribution to national development and economic growth, we must be patriotic too, and buy local rice, yes I know you have a right, but government too can implement measures to discourage too much imports, and build our local industries. Building an economy is part of government job.

Government can still make money to build hospital etc, but the economy gain more multiplier effects and GDP increases if the people have disposable income, when they buy fuel cheap from Dangote, so tax concession to Dangote refinery has more pros than cons.

We must look at what is best for the economy, so we can build more factories, employ more Nigerians and prosper the greater number. Putting money in the hands of government does not grow economy.

In UK and America, the government subsidies food, healthcare and have good welfare system, in Nigeria subsidy is the only Nigerians enjoy from our common wealth, and it helps the people retain disposable income, which mobilizes the economy.

My contribution to the national economy and to the poor is my taxes. Beyond that, the government has no right to restrict my access to the goods and services that I prefer because doing so is actually harmful to the economy. Importation also creates jobs....think about all the workers at the seaport. Why do you want to take away their livelihood?

In the US & UK, government subsidies promote corruption, waste, abuse and also damage the economy.

https://www.google.com/search?q=food+stamp+corruption&rlz=1C1NDCM_enUS837US837&sxsrf=ALiCzsYHIggPh1i48joi3SLrOkRBS1iRXA%3A1670092970449&ei=qpiLY5SCG_yFwbkPuYGIuAM&ved=0ahUKEwiU__qRjd77AhX8QjABHbkAAjcQ4dUDCBA&oq=foodstamp+corruption&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQDEoECEEYAEoECEYYAFAAWABgAGgAcAB4AIABAIgBAJIBAJgBAA&sclient=gws-wiz-serp

Look, your take on economics might benefit from this documentary. It's essentially a comparison of the USA and Sweden. Please take some time and watch, you will thank me later -


https://www.youtube.com/watch?v=jq3vVbdgMuQ

IbeOkehie:
If you're referring to me, yes I'm resident in the USA....but I did return to Nigeria to live in 2011, during the last serious attempt by government to abolish fuel subsidies. Now since the subsidies were retained after 2011, how has it worked out for Nigerians? Is the economy better OR worse?



Well good, that's a realistic price.



My contribution to the national economy and to the poor is my taxes. Beyond that, the government has no right to restrict my access to the goods and services that I prefer because doing so is actually harmful to the economy. Importation also creates jobs....think about all the workers at the seaport. Why do you want to take away their livelihood?

In the US & UK, government subsidies promote corruption, waste, abuse and also damage the economy.

https://www.google.com/search?q=food+stamp+corruption&rlz=1C1NDCM_enUS837US837&sxsrf=ALiCzsYHIggPh1i48joi3SLrOkRBS1iRXA%3A1670092970449&ei=qpiLY5SCG_yFwbkPuYGIuAM&ved=0ahUKEwiU__qRjd77AhX8QjABHbkAAjcQ4dUDCBA&oq=foodstamp+corruption&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQDEoECEEYAEoECEYYAFAAWABgAGgAcAB4AIABAIgBAJIBAJgBAA&sclient=gws-wiz-serp

Look, your take on economics might benefit from this documentary. It's essentially a comparison of the USA and Sweden. Please take some time and watch, you will thank me later -


https://www.youtube.com/watch?v=jq3vVbdgMuQ

Import doesn't create jobs, production does. Can you compare the jobs created by a factory to that created by an importer. Only the import clearing agent gets paid.

Throwback:
Any presidential candidate that thinks he can remove petroleum subsidy without first resolving the issues you mentioned, would not last the subsequent 3months in power.

the funny part is that people will still support such POLITICANS even after that subsequent three months you mentioned...I really pity this nation

Na play u dey

Patriotsleague:
Import doesn't create jobs, production does. Can you compare the jobs created by a factory to that created by an importer. Only the import clearing agent gets paid.

Watch the documentary first. Import agent, ship owner and ship unloaders also get paid. Also restaurant owners near the seaports. It's a complex operation.

Import and exports...when you ban the importation of say, rice...then local producers have less competition and can raise their prices. That is unfair to the Nigerian people you're trying to help.

Floating the National currency is the best way to reduce importation or at least make sure there's demand only for necessary imports.

A floating currency also improves productivity. Go and check...the most prosperous nations in the world have floating currencies. You may want to do some research on that topic. So if you want to boost manufacturing in Nigeria, float the naira. Right now the value of the naira is too strong. It should be at around 2700/$

And watch the documentary. You'll be glad you did.

What are you replacing the subsidy with ?
You all just saying remove subsidy. Are you increasing salaries to cater for the jump in oil prices ? Are you giving people the cheque for the amount ?

IbeOkehie:
Watch the documentary first. Import agent, ship owner and ship unloaders also get paid. Also restaurant owners near the seaports. It's a complex operation.

Import and exports...when you ban the importation of say, rice...then local producers have less competition and can raise their prices. That is unfair to the Nigerian people you're trying to help.

Floating the National currency is the best way to reduce importation or at least make sure there's demand only for necessary imports.

A floating currency also improves productivity. Go and check...the most prosperous nations in the world have floating currencies. You may want to do some research on that topic. So if you want to boost manufacturing in Nigeria, float the naira. Right now the value of the naira is too strong. It should be at around 2700/$

And watch the documentary. You'll be glad you did.

Listen good, am telling you, we will create new jobs down the value chain and more, if we engage in production nationwide, you can compare the job we will create to import, and importation reduces our currency value. You seem dumb and lack understanding of economics. Mumu. How can you say import and production economy create same number of jobs?

What of boosting GDP etc?

One restaurant can cater for a port facility that imports goods for millions of Nigerians, how many can a restaurant employ, maybe 10, the shipping company owner ain't Nigerian, but building factories to produce goods for millions of Nigerians will create thousands of jobs. You see the difference. You seem to be a self centered clown.

habsydiamond:
long time indeed oo .. like this current administration of change. Thanks.. I trust u are good too my bros

I am trying my best oh in this hardship. Take Care Bro.

IbeOkehie:
If you're referring to me, yes I'm resident in the USA....but I did return to Nigeria to live in 2011, during the last serious attempt by government to abolish fuel subsidies. Now since the subsidies were retained after 2011, how has it worked out for Nigerians? Is the economy better OR worse?



Well good, that's a realistic price.



My contribution to the national economy and to the poor is my taxes. Beyond that, the government has no right to restrict my access to the goods and services that I prefer because doing so is actually harmful to the economy. Importation also creates jobs....think about all the workers at the seaport. Why do you want to take away their livelihood?

In the US & UK, government subsidies promote corruption, waste, abuse and also damage the economy.

https://www.google.com/search?q=food+stamp+corruption&rlz=1C1NDCM_enUS837US837&sxsrf=ALiCzsYHIggPh1i48joi3SLrOkRBS1iRXA%3A1670092970449&ei=qpiLY5SCG_yFwbkPuYGIuAM&ved=0ahUKEwiU__qRjd77AhX8QjABHbkAAjcQ4dUDCBA&oq=foodstamp+corruption&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQDEoECEEYAEoECEYYAFAAWABgAGgAcAB4AIABAIgBAJIBAJgBAA&sclient=gws-wiz-serp

Look, your take on economics might benefit from this documentary. It's essentially a comparison of the USA and Sweden. Please take some time and watch, you will thank me later -


https://www.youtube.com/watch?v=jq3vVbdgMuQ

This guy and always blowing his own trumpet. You must be in your 30s. Or probably the only one to make it to the US in your village. Everyone on nairaland knows how much you make in the US. How you got to US and you're doing better than 99.999% of Nigerians. LoL �.

Patriotsleague:
Listen good, am telling you, we will create new jobs down the value chain and more, if we engage in production nationwide, you can compare the job we will create to import, and importation reduces our currency value. You seem dumb and lack understanding of economics. Mumu. How can you say import and production economy create same number of jobs?

What of boosting GDP etc?

One restaurant can cater for a port facility that imports goods for millions of Nigerians, how many can a restaurant employ, maybe 10, the shipping company owner ain't Nigerian, but building factories to produce goods for millions of Nigerians will create thousands of jobs. You see the difference. You seem to be a self centered clown.

There will NEVER be any substantial manufacturing and exports of manufactured goods from Nigeria until the government floats the naira.

Do the research and you will find out.

rickleye:
What are you replacing the subsidy with ?
You all just saying remove subsidy. Are you increasing salaries to cater for the jump in oil prices ? Are you giving people the cheque for the amount ?

Why should the subsidy be replaced with anything? Anyone that wants to buy fuel...or electricity, forex, go on pilgrimage or have a University education...should work hard and pay the full price.

Government doesn't exist to buy things for anyone. Involving government in such promotes CORRUPTION.

Have a good day!

IbeOkehie:
There will NEVER be any substantial manufacturing and exports of manufactured goods from Nigeria until the government floats the naira.

Do the research and you will find out.



Why should the subsidy be replaced with anything? Anyone that wants to buy fuel...or electricity, forex, go on pilgrimage or have a University education...should work hard and pay the full price.

Government doesn't exist to buy things for anyone. Involving government in such promotes CORRUPTION.

Have a good day!

But overseas where you are, government pay citizens social security money, government provide shelters, subsidize food and healthcare. You are wrong the government must do things for the people off the revenue and commonwealth, that is why countries like UK and America subsidize healthcare, food and pay the unemployed social security payments, we don't do this in Nigeria, the people must get a part of the Commonwealth of the nation, the government is not there for itself, it is there to cater to the people. You seem very dull of what governance is meant for.

Patriotsleague:
But overseas where you are, government pay citizens social security money, government provide shelters, subsidize food and healthcare. You are wrong the government must do things for the people off the revenue and commonwealth, that is why countries like UK and America subsidize healthcare, food and pay the unemployed social security payments, we don't do this in Nigeria, the people must get a part of the Commonwealth of the nation, the government is not there for itself, it is there to cater to the people. You seem very dull of what governance is meant for.

Yes some rich countries subsidize their citizens. I already accepted that earlier. Please note that the money for subsidies come from TAXES, not "commonwealth".

You fail to acknowledge that I provided some links showing how CORRUPTION is a consequence of those subsidies.

I'm curious to know what you think of the MASSIVE CORRUPTION that results from subsidies in the USA and UK.

Thanks!

IbeOkehie:
Yes some rich countries subsidize their citizens. I already accepted that earlier.

You fail to acknowledge that I provided some links showing how CORRUPTION is a consequence of those subsidies.

I'm curious to know what you think of the MASSIVE CORRUPTION that results from subsidies in the USA and UK.

Thanks!

With or without subsidy corruption goes on, but subsidy is good to save the poor.

Patriotsleague:
With or without subsidy corruption goes on, but subsidy is good to save the poor.

OK, that is not quite true, but the evidence is there...reducing subsidies drastically reduces corruption.

Since CORRUPTION is the number one problem of Nigeria, it follows that any hope of reducing corruption MUST involve reducing subsidies.

Also the way to save the poor is to provide jobs and opportunity. Subsidies DESTROY jobs.

Given the above it's clear Nigeria should be drastically reducing subsidies.

IbeOkehie:
OK, that is not quite true, but the evidence is there...reducing subsidies drastically reduces corruption.

Since CORRUPTION is the number one problem of Nigeria, it follows that any hope of reducing corruption MUST involve reducing subsidies.

Also the way to save the poor is to provide jobs and opportunity. Subsidies DESTROY jobs.

Given the above it's clear Nigeria should be drastically reducing subsidies.

You are speaking unrealistically, with or without subsidy corruption persist, they will only find ways to steal the money. The poor deserve a part of national cake, we need solutions that will work, government should not drive the people to desperation with overtly high price of fuel, it can lead to social disorder and chaos.

Patriotsleague:
You are speaking unrealistically, with or without subsidy corruption persist, they will only find ways to steal the money. The poor deserve a part of national cake, we need solutions that will work, government should not drive the people to desperation with overtly high price of fuel, it can lead to social disorder and chaos.

I'm very realistic and Nigerians generally have problems with any kind of realism. Good thing I'm not a politician so I don't have to sugarcoat anything and that's a reason to actually commend this Abiola fellow.

I didn't say corruption will disappear. I said it will be drastically reduced and there's plenty of evidence right there in Nigeria. Why ANYONE would choose to reject the evidence is unclear to me.

Compare the levels of corruption in PRIVATE Universities versus the subsidized, price regulated, GOVERNMENT owned universities.

When government owned NITEL was the only telecom company available, it was subsidized by government. You had to pay a bribe to get a phone line and only the rich had phones.

Today telecoms is privately owned with ZERO subsidy and most poor people have phones. Have you ever heard of anyone paying a bribe to get a phone line since 2001?

Just universities and telecoms provide enough evidence for the case I'm making. If you want to abolish scarcity and corruption and reduce prices in the fuel sector, the solution is known, it's already being practiced in other sectors. What Nigerians need is the courage to bear the INITIAL pains which will lead to long term gains.

Happy Sunday to you.

tommy589:
Subsidy scam: They fix and pay volume of consumption which is not verifiable and not possible.Neighbouring countries pay more for smuggled fuel from here and government still pay the subsidy

If we buy at market price new refineries would be established to create more jobs and conserve Forex used to pay for imported finished products. We have other petrol chemical products that comes from crude refining,this also creates new industries and more job opportunities

With this and more,we end yearly stealing of tonnes of million dollars for turn around maintenance on government refineries that are not productive

Who are the "they" that "fix and pay volume of consumption which is not verifiable and not possible"? Is it fuel subsidy?

Who isn't buying at market price? What is the market price? What has buying or not buying at market price got to do with fuel subsidy?

How has fuel subsidy prevented the building of more refineries?

Who is stealing "million of dollars for turn around maintenance on government refineries that are not productive" and what has that got to do with fuel subsidy?

IbeOkehie:
I'm very realistic and Nigerians generally have problems with any kind of realism. Good thing I'm not a politician so I don't have to sugarcoat anything and that's a reason to actually commend this Abiola fellow.

I didn't say corruption will disappear. I said it will be drastically reduced and there's plenty of evidence right there in Nigeria. Why ANYONE would choose to reject the evidence is unclear to me.

Compare the levels of corruption in PRIVATE Universities versus the subsidized, price regulated, GOVERNMENT owned universities.

When government owned NITEL was the only telecom company available, it was subsidized by government. You had to pay a bribe to get a phone line and only the rich had phones.

Today telecoms is privately owned with ZERO subsidy and most poor people have phones. Have you ever heard of anyone paying a bribe to get a phone line since 2001?

Just universities and telecoms provide enough evidence for the case I'm making. If you want to abolish scarcity and corruption and reduce prices in the fuel sector, the solution is known, it's already being practiced in other sectors. What Nigerians need is the courage to bear the INITIAL pains which will lead to long term gains.

Happy Sunday to you.

What is wrong with fuel subsidy?

CheapHomes1:
What is wrong with fuel subsidy?

I've outlined what is wrong with it and I'm sure any reasonable person can understand.

IbeOkehie:
Well, the world price of petrol is around ₦‎450 to 500/litre and Nigeria is part of the world

Most people want to get their fuel for free, but there's an actual, real price dictated by costs of production. Same as there's a real price for garri, house rent, slippers and satchet water and car tyres. Yes, everyone wants them for free but the REALITY is that SOMEBODY has to pay those who PRODUCE those things so they can make a profit. If government forces them to take prices that are NOT profitable, they will stop producing. Nothing strange there, Nigerians have been experiencing SCARCITY in many government regulated sectors like University education, forex and fuel.

When subsidy is removed, it also means more business people will make more profits, so they will invest in building local refineries to produce more fuel, which will create jobs.

Right now anyone doing fuel business legitimately and according to law is likely losing money. The only way to make money in the fuel business under the subsidy system is by CORRUPTION. That's why Exxon Mobil abandoned selling fuel in Nigeria -

https://www.ogj.com/general-interest/article/17250725/exxonmobil-sells-nigerian-retail-business

The equation is simple.

Wholesale price of fuel right now in the USA and on the world market is $0.60c per liter, which is ₦‎240 at official CBN rate and ₦‎430 at black market rate.

Federal Government of Nigeria imports fuel from the USA at ₦‎430 and sells to Nigerians at ₦‎165 per liter. That's a loss of at least ₦‎150 on every liter sold. That is NOT sustainable, it's plain to see. Worst, Nigerians...ordinary Nigerians...buy that fuel at ₦‎165 and smuggle it Cameroun & Benin Republic and sell it at ₦‎450. That's corruption and EVERYONE is doing it, not just government officials.

When Dangote starts selling from his refinery, he has two options - sell to Nigerians at ₦‎165 OR export to world market at ₦‎430. If it was your business, what would you choose to do? The only way he will agree to sell to Nigerians is if the government pays him a subsidy. Which means it's likely fuel subsidies are going to continue, this time as a direct payment to Dangote. Are you comfortable with that?

The point being, even domestic refineries are not a solution as long as price is regulated.

Do you understand that telecoms, broadcasting and banking used to be industries with government regulated and subsidized prices? Can you compare NITEL to MTN and Glo OR Channels TV to NTA?

Are you happy with the current scarcity of forex? The cause is well known - government regulated pricing.

It's a simple thing. Price regulation and subsidies are evil, they destroy jobs and promote scarcity of products and services. Be advised.

Thanks

CheapHomes1:
Who are the "they" that "fix and pay volume of consumption which is not verifiable and not possible"? Is it fuel subsidy?

Who isn't buying at market price? What is the market price? What has buying or not buying at market price got to do with fuel subsidy?

How has fuel subsidy prevented the building of more refineries?

Who is stealing "million of dollars for turn around maintenance on government refineries that are not productive" and what has that got to do with fuel subsidy?

Most business men don't want to operate in a business where government sets the price. Subsidies come with government fixed prices.

If government starts setting the price of garri tomorrow, garri will become scarce. A black market for garri will start operating just like the black market in forex and fuel. This is really easy to understand, I think most Nigerians like to PRETEND they don't get it.

That's all.

IbeOkehie:


I've outlined what is wrong with it and I'm sure any reasonable person can understand.



Thanks

How does your post prove that something is wrong with fuel subsidy?

IbeOkehie:
Most business men don't want to operate in a business where government sets the price. Subsidies come with government fixed prices.

If government starts setting the price of garri tomorrow, garri will become scarce. A black market for garri will start operating just like the black market in forex and fuel. This is really easy to understand, I think most Nigerians like to PRETEND they don't get it.

That's all.

Are you sure you know the meaning of subsidy?

How does subsidy come with govt fixed prices?

You haven't answered my questions...

Who are the "they" that "fix and pay volume of consumption which is not verifiable and not possible"? Is it fuel subsidy?

Who isn't buying at market price? What is the market price? What has buying or not buying at market price got to do with fuel subsidy?

How has fuel subsidy prevented the building of more refineries?

Who is stealing "million of dollars for turn around maintenance on government refineries that are not productive" and what has that got to do with fuel subsidy?

CheapHomes1:
Are you sure you know the meaning of subsidy?

How does subsidy come with govt fixed prices?

You haven't answered my questions...

Who are the "they" that "fix and pay volume of consumption which is not verifiable and not possible"? Is it fuel subsidy?

Who isn't buying at market price? What is the market price? What has buying or not buying at market price got to do with fuel subsidy?

How has fuel subsidy prevented the building of more refineries?

Who is stealing "million of dollars for turn around maintenance on government refineries that are not productive" and what has that got to do with fuel subsidy?

Subsidy almost always comes with regulated prices. Without that, the costs to government are basically INFINITE.

Anyhow, if Nigerians like subsidy, let it continue. No problem, it started in 1973 and it's going just fine since then

Good Luck to them with all that.

Bye.

IbeOkehie:
Subsidy almost always comes with regulated prices. Without that, the costs to government are basically INFINITE.

Anyhow, if Nigerians like subsidy, let it continue. No problem, it started in 1973 and it's going just fine since then

Good Luck to them with all that.

Bye.

Pls what is subsidy?

How does subsidy come with govt fixed prices?

Who are the "they" that "fix and pay volume of consumption which is not verifiable and not possible"? Is it fuel subsidy?

Who isn't buying at market price? What is the market price? What has buying or not buying at market price got to do with fuel subsidy?

How has fuel subsidy prevented the building of more refineries?

Who is stealing "million of dollars for turn around maintenance on government refineries that are not productive" and what has that got to do with fuel subsidy?