₦airaland Forum

nairalanda1:
Even with a reliable database, the problem with subsidy is government can do nothing about the cost of producing one liter of fuel

That cost is not fixed and it rises. As a result whenever it rises, so does the cost of subsidy. That creates issues and problems...especially when subsidy cannot cover the rising cost, therefore we have to spend more money on paying for the petrol



LOL...it isn't. And in places where it happens, most countries practice what is called an implicit subsidy..ie removing taxes on the industry,or providing grants to reduce some of the cost burden. It does not mean the industry sells at a loss, or is forced to sell at a loss, which is what we did here, and it wrecked oureconomy





Yes, and if UK tax rate was implemented here, you guys would scream. They charge a high tax, that's why they can pay for the NHS. Even then, it is running at a loss. Conservatives secretly want to privatise the thing.

Plus healthcare is subsidized in Nigeria. If you get on NHIS the subsidy increases self.




Nigeria has a high population , that our crude oil production cannot sustain. We produce less than the UAE, and have ten times, if not more than the UAE's piopulation.

We better accept that cold fact.




Ghana has crude oil deposits, which it exploits. As does Niger, and Chad. Even Benin discovered some crude. Want to try again?




I put it there because anytime I oppose you subsidy supporters, you start calling me APC supporter. Something I was backing before there was an apc self.



Good, then let us raise the tax rate and tax the 70% not taxed so that we can earn enough cash to pay for the darn thing.



So why did you say that subsidy is what you are supposed to enjoy as a citizen? You want the subsidy, abeg. No need to pretend.

You have said it EXCELLENTLY well. So on point. PERFECT. You see all those ones are ignorant of the realities on ground.

Workch:
in 2022, Nigeria generated N10 trillion from tax according to FIRS, that's about the same amount we use in subsidizing fuel.

See why I oppose subsides. If there was no subsidy, that's N10 Trillion free for use by government.

Now if we then consider revenue from other agencies like customs that he reported 1 trillion naira. Imagine setting up a system that reduces tax leakages to the nearest minimum

It is a good idea, but at the end it does nothing about the essential problem with subsidy...the rising cost of production.

I know you will argue that we cannot use all our tax to pay fuel subsidy, yes we can if we know the actual amount we are subsidizing for which I bet is way lower than 800billion monthly.

It isn't as high as that yet, (it is 600 billion according to some, 400 billion according to others)...but it is very high. We are a large nation, and looting and stealing aside, most people and small industries rely on generators which eat lots of money

Also, again...cost of production.

NNPC and there cronies inflate that figure while Firs and customs deflates tax figures. The problem is our structure.

Which is why removing subsidy is needed...it ends inflation and brings about proper business practice

I mean, when there is free sugar lying on the ground, the ants gather. Free government money is a big attractor for corruption. The only way to end that is to force NNPC to work for its kudi BY REMOVING SUBSIDY.

[/quote]cording to NBS, Nigeria generated 22trillion from crude oil revenue, this can run the country if well spent. This country is not rocket science to run if we put the right structure in place.

Yeah, and if the latest report from the Guardian is to be believed, a large chunk of that went into spending on debt service..WHICH resulted from the fact that we rely on oil and oil prices have never been consistently high enough for us to stay afloat.

Plus 22 trillion is not enough for a nation our size. We need ten to thirty times that. That's why I don't like our current dependency on oil,

And our debt is 49 trillion naira by the way

which is why I regard this APC government and all the other governments as failures. No diversification AT ALL.

Nigeria can pay for subsidy if We do it right.

We can't. Cost of production...cost of production. And our economy is a one trick pony.

Tax to GDP ratio doesn't make any meaning here.
The reason also has to do with the bad structure, the government doesn't want to galvanize the tax system to prompt efficiency and leakages. Must the citizens suffer for it?

Well, do you want the suffering that results when our subsidy spending is much higher than our revenue? On top of the massive debt we have accumulated over the years.

Our debt is about 49 trillion naira by the way.

Leave NHIS dude, you don't know how things work. If every Nigerian registers for NHIS, our hospitals don't have the facilities to take the volume. You are doing insurance for inefficiency. Insurance is different from susbisdy, are you thick?

NHIS works well enough. We also have PHIS and some states have their own version.

Yes it works. And one pays a fraction of the cost by the by. I work in healthcare, so I should know.

Tianamen1:
you did not even read what I wrote

Ah well.

nairalanda1:
Noted

So long as the cost of production keeps rising, so do subsidy costs.

cost of production will raise because you are not producing in your country. If you produce petrol in this country, you can mitigate the cost of production. Is it not why we are yearning for a refinery?
It's not hard to grasp, you don't have control per price if you don't produce it.

And so long as we pay for subsidy from oil money alone...not from tax revenue, that is a problem

it's not a problem, it has massive economic benefits if properly done. Nigeria is doing it fraudulently.
Most of Saudi Arabia's energy subsidies go to oil products, its subsidies only counts for more than $60 billion and up to 75.65% of the total energy subsidies, making it the biggest beneficiary of government support. The oil subsidies' share in the country's GDP is a percentage of 8.25%.
UAE government pays 85% fuel subsidy and they don't have issue with it because they have working database and systems to checkmate fraud

At the end, the deficit resulting eats our revenue, and then eats the borrowed money

And when that happens, the poor suffering would be excessively terrible.

For me, it is a choice between a rock and a hard place. I would that Nigeria chose neither, but at the end, it is what it is.

And yes, corruption and looting is a symptom. The Soviet and other communist countries tried what we did with subsidy...by subsidsing everything. Not only did it lead to corruption, scarcities and abuse, it even led to a massive black market.

I argue that we should not cut the profit motive in helping the poor. It ends up not benefiting anyone, the poor especially.

petrol subsidy is the benefit of citizens in oil producing countries. It's hard here because we can't checkmate fraud.
Russia. ANGOLA AND MOST top members of OPEC still subsize fuel because they do it right.
It's hard in Nigeria because our government is irresponsible

nairalanda1:
Ah well.

Thank God I no longer live in Nigeria.

Tianamen1:
you did not even read what I wrote

Because at the end, the issue with subsidy is not what you wrote...but the cost of production.

Dude, I have been reading your comments. I even have been taking abuse from you. I understand what you wrote

But all that is negated by the harsh fact that subsides are not sustainable because...governments cannot do anything about the cost of production.

Trying to control for the cost of production causes severe distrotions that lead to problems which cause more issues





Now a little secret

I WANT SUBSIDIES in real life. I want there to be a subsidy, BUT the issue is, trying to pay for subsides is creating a problem called a deficit, which causes more and more problems for everyone..the poor especially.

And it is because I don't want to see us end up like Sri Lanka and Lebanon, that I take the hard line on subsidies

I hate how government has messed up our economy, and I wish Nigerians did not vote for PDP or APC, but i can't do nothing about it. Now we are in a mess. And sadly subsidy removal is the only way to fix it.

And God help me, I wish it was not so. I effing wish it was not so.

nairalanda1:
See why I oppose subsides. If there was no subsidy, that's N10 Trillion free for use by government.



It is a good idea, but at the end it does nothing about the essential problem with subsidy...the rising cost of production.



It isn't as high as that yet, (it is 600 billion according to some, 400 billion according to others)...but it is very high. We are a large nation, and looting and stealing aside, most people and small industries rely on generators which eat lots of money

Also, again...cost of production.




Which is why removing subsidy is needed...it ends inflation and brings about proper business practice

I mean, when there is free sugar lying on the ground, the ants gather. Free government money is a big attractor for corruption. The only way to end that is to force NNPC to work for its kudi BY REMOVING SUBSIDY.

cording to NBS, Nigeria generated 22trillion from crude oil revenue, this can run the country if well spent. This country is not rocket science to run if we put the right structure in place.

Yeah, and if the latest report from the Guardian is to be believed, a large chunk of that went into spending on debt service..WHICH resulted from the fact that we rely on oil and oil prices have never been consistently high enough for us to stay afloat.

Plus 22 trillion is not enough for a nation our size. We need ten to thirty times that. That's why I don't like our current dependency on oil,

And our debt is 49 trillion naira by the way

which is why I regard this APC government and all the other governments as failures. No diversification AT ALL.

Nigeria can pay for subsidy if We do it right.

We can't. Cost of production...cost of production. And our economy is a one trick pony.



Tax to GDP ratio doesn't make any meaning here.
The reason also has to do with the bad structure, the government doesn't want to galvanize the tax system to prompt efficiency and leakages. Must the citizens suffer for it?

Well, do you want the suffering that results when our subsidy spending is much higher than our revenue? On top of the massive debt we have accumulated over the years.

Our debt is about 49 trillion naira by the way.

Leave NHIS dude, you don't know how things work. If every Nigerian registers for NHIS, our hospitals don't have the facilities to take the volume. You are doing insurance for inefficiency. Insurance is different from susbisdy, are you thick?

NHIS works well enough. We also have PHIS and some states have their own version.

Yes it works. And one pays a fraction of the cost by the by. I work in healthcare, so I should know.

Nhis is not subsidy, do you even understand subsidy? NHIS is an insurance scheme and it's totally different from subsidy.
A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or tax reduction.

In the case of fuel subsidy, government pays oil marketers part of the amount that should have been paid directly into their account. That's not how insurance scheme works.

Why don't you get anything? 🤔

Workch:
cost of production will raise because you are not producing in your country. If you produce petrol in this country, you can mitigate the cost of production. Is it not why we are yearning for a refinery?
It's not hard to grasp, you don't have control per price if you don't produce it.

Even if you were producing in country, costs will still go up...because

1.Worlkers have to be paid very well...or they japa abroad (Nigerian oil workers can and do jakpa ). Same goes for NNPCL...which is no longer a government run concern.(PIA ended that).

2.Maintenance and upgrade costs (remember we don't produce most of the stuff needed for a refinery to work well).

3.Taxes. (Ya think Lagos is letting Dangote work for free? Or FG?)

it's not a problem, it has massive economic benefits if properly done. Nigeria is doing it fraudulently.
Most of Saudi Arabia's energy subsidies go to oil products, its subsidies only counts for more than $60 billion and up to 75.65% of the total energy subsidies, making it the biggest beneficiary of government support. The oil subsidies' share in the country's GDP is a percentage of 8.25%.
UAE government pays 85% fuel subsidy and they don't have issue with it because they have working database and systems to checkmate fraud

Saudi produces 10 million barrels a day and has 40 million people

UAE produces 2.5-2.8 million barrels of crude a day and has 14 million people

Nigeria produces 1.5 million (it was even under 1 million 3 years ago) barrels a day and has 220 million people.

See why Saudi can afford subsides, and UAE and we can't?

Libya produces 1.9 MILLION barrels of crude a day, and has 8 million people


And see why our government is not working? We need to diversify our economy and raise taxes before we can afford subsides. Harsh , but true.

petrol subsidy is the benefit of citizens in oil producing countries. It's hard here because we can't checkmate fraud.
Russia. ANGOLA AND MOST top members of OPEC still subsize fuel because they do it right.
It's hard in Nigeria because our government is irresponsible

Angola has less than 40 million and is struggling with subsides, and is broke ass poor. And they get a lot of petrol smugglied out of the country...especially to Namibia

Russia is a DIVERSIFED economy, with constant power supply. Something Nigeria should do, but our government has not done.

Workch:
Nhis is not subsidy, do you even understand subsidy? NHIS is an insurance scheme and it's totally different from subsidy.

Yeah you pay something into it...but in return, you get drugs at a heavily discounted rate.

A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or tax reduction.

Which is what happens in government run hospitals, and even for some medications eg malaria drugs.

Simples. I work there after all.

In the case of fuel subsidy, government pays oil marketers part of the amount that should have been paid directly into their account. That's not how insurance scheme works.

That was partly the case prior to 2016, when Government made NNPC sole importer and paid subsidy costs to them to compensate them for selling fuel at a loss to marketers.

The remaining bit went to transporters. It is why pre subsidy, prices were the same all over the country.

Why don't you get anything? 🤔

K.

nairalanda1:
Even if you were producing in country, costs will still go up...because

1.Worlkers have to be paid very well...or they japa abroad (Nigerian oil workers can and do jakpa ). Same goes for NNPCL...which is no longer a government run concern.(PIA ended that).

2.Maintenance and upgrade costs (remember we don't produce most of the stuff needed for a refinery to work well).

3.Taxes. (Ya think Lagos is letting Dangote work for free? Or FG?)




Saudi produces 10 million barrels a day and has 40 million people

UAE produces 2.5-2.8 million barrels of crude a day and has 14 million people

Nigeria produces 1.5 million (it was even under 1 million 3 years ago) barrels a day and has 220 million people.

See why Saudi can afford subsides, and UAE and we can't?

Libya produces 1.9 MILLION barrels of crude a day, and has 8 million people


And see why our government is not working? We need to diversify our economy and raise taxes before we can afford subsides. Harsh , but true.



Angola has less than 40 million and is struggling with subsides, and is broke ass poor. And they get a lot of petrol smugglied out of the country...especially to Namibia

Russia is a DIVERSIFED economy, with constant power supply. Something Nigeria should do, but our government has not done.

How can price go up uncontrollably when you are producing product and you have a the resources to manufacture it in your country? 😂

Nigeria currency revenue stands at more than 22billion, and cost of subsidy is 10billion.
You are bent on protecting governments inability to be responsible. If Nigeria has been doing the right thing with subsidy before now, we will not have a single issues with it.

You need to see that this is not working because government and those working with government irresponsible and government cannot fight the corruption

nairalanda1:
Yeah you pay something into it...but in return, you get drugs at a heavily discounted rate.


Which is what happens in government run hospitals, and even for some medications eg malaria drugs.

Simples. I work there after all.



That was partly the case prior to 2016, when Government made NNPC sole importer and paid subsidy costs to them to compensate them for selling fuel at a loss to marketers.

The remaining bit went to transporters. It is why pre subsidy, prices were the same all over the country.





K.

Nhis is health insurance scheme.
Private firms run it. It's a game of robbing Peter to pay Paul. It's not subsidy.

The revenue gotten from those who pay more and didn't get to use it is used to service those who need it while the company makes profit. And the most part where Nigeria government makes payment is for her employers, even my company pay HMO for me, so that's not subsidy.

It's different. Stop talking about NHIS

Workch:
How can price go up uncontrollably when you are producing product and you have a the resources to manufacture it in your country? 😂

Nigeria currency revenue stands at more than 22billion, and cost of subsidy is 10billion.
You are bent on protecting governments inability to be responsible. If Nigeria has been doing the right thing with subsidy before now, we will not have a single issues with it.

You need to see that this is not working because government and those working with government irresponsible and government cannot fight the corruption

Our debt is 49 trillion by the by

Thank you, OP.

It's puzzling how there's some kind of elite conspiracy to deliberately complicate what should be a simple argument concerning this subsidy removal of a thing.

As as long as I can remember, I have argued that any talk about removing subsidy on fuel simply means that the government would be punishing poor Nigerians for its own inefficiency, incompetence and corruption. It's as simple as that, in spite of any laboriously long arguments our 'professors' want to make to the contrary.

1. Professionally and continuously audit the fuel consumption numbers and subsidy payments regime to plug loopholes.

2. Tackle smuggling of subsidised fuel across Nigeria's borders

3. Make sure that Nigeria's publicly owned refineries work at full capacity, and remove any bottlenecks that impede the creation of new small and large private refineries

4. Supply crude to these local refineries at rebated prices if possible, in Naira of course. Give the local refineries tax waivers where necessary

5. The DPR (or whatever its current incarnations are called) should be doing its job to tackle hoarding and manipulation)

Frankly I don't care if anyone says all of these are easier said than done. It's not rocket science, and if we can't do these, then we're buttressing the point being made about government's incompetence/inefficiency which the masses SHOULD NOT take responsibility for!

Workch:
Nhis is health insurance scheme.
Private firms run it. It's a game of robbing Peter to pay Paul. It's not subsidy.

The revenue gotten from those who pay more and didn't get to use it is used to service those who need it while the company makes profit. And the most part where Nigeria government makes payment is for her employers, even my company pay HMO for me, so that's not subsidy.

It's different. Stop talking about NHIS

And under NHIS ye don't pay full costs.

Plus health is subsidised. That's why you don't pay 15 million for your wife's caesarean section

nairalanda1:
Our debt is 49 trillion by the by

whose fault?
Who didn't do subsidy well for the past years? Government

Who can't galvanize tax system? Government

Who is not take responsibility for the failure? Government

Who cannot fight corruption? Government

It doesn't matter, if the system is bad, if you like remove subsidy, it won't work. The problem is not the subsidy, it's the gross inefficiency in the system. It does not matter how you want to structure it, it won't work if your institutions are weak, People in the system will still find ways to steal the funds that are not paid on subsidy and the citizens will keep suffering.

Workch:
whose fault?
Who didn't do subsidy well for the past years? Government

Who can't galvanize tax system? Government

Who a not take responsibility for the failure? Government

It doesn't matter, if the system is bad, if you like remove subsidy, it won't work. The problem is not the subsidy, it's the gross inefficiency in the system. It does not matter how you want to structure it, it won't work if your institutions are weak, People in the system will still find ways to steal the funds that are not paid on subsidy and the citizens will keep suffering.

Yeah, there is a reason why I don't back any of the parties

It is the government fault. It's part of why subsidy is gone. Mistakes and bad government add up.

Sadly people suffer for it

nairalanda1:
And under NHIS ye don't pay full costs.

Plus health is subsidised. That's why you don't pay 15 million for your wife's caesarean section

without subsidy, you won't even pay 15million for it. It seems you are not married yet.

I have a feeling that you don't even know how Nhis works. You need to register for it, government don't pay automatically. Those who don't register pay full cost of any health service.

It's different from subsidy. My younger brother's wife did a cesarean session last week, without heslth insurance, we paid 250k so what are you talking about?

Workch:
without subsidy, you won't even pay 15million for it. It seems you are not married yet.

I have a feeling that you don't even know how Nhis works. You need to register for it, government don't pay automatically. Those who don't register pay full cost of any health service.

Which in government institutions is subsidised already.

Are you telling me you paid 15 million for your wife's caesarean? Which hospital was that? Was it government run?

nairalanda1:
Yeah, there is a reason why I don't back any of the parties

It is the government fault. It's part of why subsidy is gone. Mistakes and bad government add up.

Sadly people suffer for it

It's also the reason why I don't trust APC. I don't trust them because they have shown me beyond every reasonable doubt that they are not there to make any change. It's all mirage.

And also they didn't go about removing the subsidy well.

nairalanda1:
Because at the end, the issue with subsidy is not what you wrote...but the cost of production.

Dude, I have been reading your comments. I even have been taking abuse from you. I understand what you wrote

But all that is negated by the harsh fact that subsides are not sustainable because...governments cannot do anything about the cost of production.

Trying to control for the cost of production causes severe distrotions that lead to problems which cause more issues





Now a little secret

I WANT SUBSIDIES in real life. I want there to be a subsidy, BUT the issue is, trying to pay for subsides is creating a problem called a deficit, which causes more and more problems for everyone..the poor especially.

And it is because I don't want to see us end up like Sri Lanka and Lebanon, that I take the hard line on subsidies

I hate how government has messed up our economy, and I wish Nigerians did not vote for PDP or APC, but i can't do nothing about it. Now we are in a mess. And sadly subsidy removal is the only way to fix it.

And God help me, I wish it was not so. I effing wish it was not so.

Please educate me, what precisely do you mean by the cost of production?

Workch:
It's also the reason why I don't trust APC. I don't trust them because they have shown me beyond every reasonable doubt that they are not there to make any change. It's all mirage.

And also they didn't go about removing the subsidy well.

I don't trust them APC, PDP or LP either

But on subsidy, it is between a hard choice and an even harder choice.

I bow out.

nairalanda1:
Which in government institutions is subsidised already.

Are you telling me you paid 15 million for your wife's caesarean? Which hospital was that? Was it government run?

You don't know how Nhis works. I swear.

You should go and read up about it. Nigerian government does not subsidize Healthcare. Show me where it is in the budgets that they are paying subsidy for health?

NHIS is not subsidy, it's a scheme for those who register for it.

Workch:
You don't know how Nhis works. I swear.

You should go and read up about it. Nigerian government does not subsidize Healthcare. Show me where it is in the budgets that they are paying subsidy for health?

NHIS is not subsidy

Lol. I bow out

You want subsidy, get off this site and fight for it.

Is that clear. Ditto Tianmen.

I'm out. Got to make a living to pay for the 630 fuel

nairalanda1:
I don't trust them APC, PDP or LP either

But on subsidy, it is between a hard choice and an even harder choice.

I bow out.

It's not a hard choice, it's a force choice as a result of irresponsibility of the Nigerian government over the years.

Nigeria's revenue had it been properly managed can pay subsidy and we will still run this country.

Workch:
It's not a hard choice, it's a force choice as a result of irresponsibility of the Nigerian government over the years.

Nigeria's revenue had it been properly managed can pay subsidy and we will still run this country.

Then fight for your subsidy

nairalanda1:
Lol. I bow out

You want subsidy, get off this site and fight for it.

Is that clear. Ditto Tianmen.

I'm out. Got to make a living to pay for the 630 fuel

I don't want subsidy, I want a responsible government. Whether or not subsidy is removed, things will work.

This subsidy removal is a product of government failure to fight corruption

nairalanda1:
Then fight for your subsidy

I don't want subsidy?

Did you pass comprehension in school?
Removing subsidy without a removing bad structures is a futile venture, they will still find other ways to steal

Workch:
I don't want subsidy, I want a responsible government. Whether or not subsidy is removed, things will work.

This subsidy removal is a product of government failure to fight corruption

You want subsidy.

Stop pretending. If you didn't, why are you arguing with me then?

Gosh, I don't get some folk

Workch:
I don't want subsidy?

Did you pass comprehension in school?

So why are you arguing with me.?

You could have saved your electrons and data then!

K.

nairalanda1:
You want subsidy.

Stop pretending. If you didn't, why are you arguing with me then?

Gosh, I don't get some folk

I'm arguing it because government is suppose to take responsibility for the failure and not the citizens taking it.

Subsidy removal is a cure for the symptoms of the actual disease of weak institutions and massive corruption remains in the system. It won't work, if you like remove subsidy and even tax us on fuel, they will mismanage it

Workch:
I'm arguing it because government is suppose to take responsibility for the failure and not the citizens taking it.

Subsidy removal is a cure for the symptoms of the actual disease of weak institutions and massive corruption remains in the system. It won't work, if you like remove subsidy and even tax us on fuel, they will mismanage it

Then support your subsidy then.

nairalanda1:
So why are you arguing with me.?

You could have saved your electrons and data then!

K.

I'm arguing because you are not getting the Point.

Yoi can even barely understand how Nhis works.

You don't even understand that government does not subsidize health in Nigeria. You think that a caeseram session should cost 15million. That's funny 😂