₦airaland Forum

Ngwakwe:
I got lost when I read these excerpts

The people implicated in the report did not speak while the minister spoke meaning he wasn't implicated

While the Nigerian medical entities implicated in the report did not speak to the press on the matter , on October 17 letter titled Letter of Understanding on the Principles regarding the Gavi Cash Program Audit 2011-2013” and signed by immediate past Minister of Health, Prof. Onyebuchi Chukwu acknowledged weaknesses in the management of Gavi funds.

The letter, which was written in response to preliminary reports, assured Gavi that the Nigerian government would refund misappropriated money and would welcome further audits of Gavi funding.

The letter also promised steps would be put in place to deter corruption and increase accountability. “In response to the CPA, the Ministry of Health and NPHCDA have introduced a number of measures to immediately enhance the transparency and accountability of systems. These include the upgrading of the Internal Audit Unit to a department empowered to undertake physical verification; the introduction of routine checks to validate that purchased assets have been delivered and installed appropriately across the country; and the computation of a fixed asset register."

The letter furthers, “The Ministry of Health and Gavi appreciate the role of partners, particularly UNICEF and WHO, in channelling Gavi funds during the transitional period while the executing entities are strengthening their capabilities. For the longer term, the appointment of a fiduciary agent was agreed to oversee the financial management of Gavi’s grants at both federal and state levels.

The appointment of a fiduciary agent to oversee the financial management of Gavi’s grants to Nigeria, at both federal and state levels, has also been agreed between Gavi and the Government of Nigeria. The fiduciary agent will also be tasked to help remediate the weaknesses identified at Nigeria’s National Primary Health Care Development Agency.

“This appointment will also support the enhancement of executing entities’ capacities to strengthen systems of transparency and accountability,” the statement concluded.

^^^
I wouldn't be so quick to exonerate Prof Chukwu (for the simple reason that the federal health ministry superintends? the NPHCDA and Prof Chukwu it seems, was the minister when at least some of the infractions (under investigation) occurred.) But then again, this is Nigeria. Nonetheless, we will be waiting. And watching to see what the federal government has to say about this.

Let's move to other issues. This thread (like many others before it and others to come after it) demonstrates the contradictions and the fellowship of failure of the country called Nigeria. An alliance of donors issues a damning indictment of senior federal health ministry officials and all that some posters see fit to do is to engage one another in senseless slanging matches based on their ethnicity?

Granted, some posters on these boards are 5th columnists. Some are not even Nigerians. Some other posters are literary mercenaries, online guns for hire who will act as paid hacks once the price is right. But not all posters who support criminality among public officials are in this for the money. In their naivete, they chime in on these pointless 'my kinsman is less (or more) of a rogue than yours' threads. Whose interests do such threads serve? Instead of demanding accountability from our leaders across the board, some of us excuse felony on ethnic grounds. The evidence is there on countless threads on these boards and this foolishness is not limited to any one ethnic group or political group.

Do we now see why some say Nigeria is a place where 'the worst never happens but the best is impossible'?

(Pseudo) patriotism is indeed the last refuge of knaves and scoundrels.

Some posters who 'love' Nigeria pour out their nationalism all over their keyboards just to get a rise out of other people. But deep down they know a lot is terribly wrong with this country. I don't really have a problem with such people - sooner or later it becomes clear where they really stand.

The real problem is the large mass of politically illiterate individuals who are ignorant and unschooled about how modern (or ancient) democracies work (or worked). There are several of them on this thread. These individuals view 'patriotism' through a pinhole sized prism and interpret the world around them in terms of their narrow definition of what it means to love one's country. Just like some individuals have a morality determined principally by the length of women's hemlines (or some other trivia), some individuals define patriotism primarily by intolerance to (largely well deserved) criticism.

The terrible thing about it is that this mass of incurious individuals has the right to vote.

We are the architects of our own destruction.

Trailblazer1:
I knew that nothing good will ever come out of Sahara reporters.

Enemies of truth.

Here is the truth:
http://www.gavi.org/Library/News/Statements/2014/Review-of-Gavi-support-to-Nigeria/

^^^
Maybe you should take a closer look at the link you posted. The Sahara Reporters article simply reported the official correspondence and interaction between GAVI and the federal ministry of health. The article did not indict Chukwu or make any wild allegations. While SR has gotten it very wrong in the past, there is nothing wrong (as far as I can see) in this report on GAVI's operations in Nigeria.

Perhaps you would be better served in directing your displeasure at the moderator who allowed the misleading headline on this thread.

The headline does appear to be misleading. It simply creates room for the foolish tribalism that weakens any argument for accountability in this place called Nigeria. But then, maybe that was the OP's intention - to incite a completely pointless online ethnic firestorm instead of forcing the federal government to explain this embarrassment. Who knows?

Let us move to the heart of the matter. I hope Nigerians can see what they have created with their own hands with the 'leaders' they have voted in time and time again. Scandal after scandal after scandal . And yet Nigerians do not have the moral courage or basic decency to insist on holding their governments accountable. How can a people be so stupiid?

The 'lovers' of Nigeria who claim they are more patriotic than anyone else should take a look at what GAVI has put up on its website. Awful, terrible stuff. I had never heard of GAVI before today. And yet my first briefing about GAVI is one in which it describes my country's federal health ministry as a criminally incompetent bureaucracy that deliberately mortgages the future of the unborn. Is this the way serious countries operate?

This is the story of this land. One atrocity or outrage after the other, each one even more egregious than the previous one. But the interesting thing about it is that it WILL continue. More children WILL die or be maimed by polio, rubella and other diseases until Nigerians say: ENOUGH.

The question is: When? When will Nigerians indeed say: "enough"?

Olivers2J:
@op plz answer me, who is a saint in Nigeria system of government? I guess no one........... So let's stop been judegemental because it doesn't pay us

^^^
This is a poor response. Very poor.

Pangea:
@ Op

Why are you wasting your time , trying to educate the idiots?

Reading almost all the response, I can deduce that, all hope is lost for the country if this is the mindset of an average Nigerian!
For a change to happen, one must first agree, there is a problem.
The people in the zoo called Nigeria has adapted to their problems instead of going out of their way to bring solution or a change!

They are like the Cypher in the movie - The Matrix, who opined that "Ignorance is bliss"
They prefer the illusion rather than the reality !
The OP has just painted the reality, but what do we get, the cyphers of Nigeria, throwing tantrums because once again they have been yanked out of their illusion!

^^^

Ovamboland:
Dear sir, quick fixes hardly produce well-thought out, enduring results. If we have not experienced sudden death because of the current arrangement, the time to build a foundation of deep democratic ethos is nothing compared to the complacency that will result once big brother Abuja speaks on the matter.
Delist does not equal cancel all the local governments, they will still exist, then[b] it is left for the citizens, state legislature, executive and judiciary to supervise breaking them down to smaller units or merging them into bigger units, citizens should be smart enough to do that without big brother's directives.[/b]
I agree the objectives might not be mutually exclusive but the means and vehicle you advocate to achieve it is what i have issues with. What is so difficult in the National Assembly standing up for once for true Federalism as we have named ourselves and tell the people to approach their state government for local government reforms? Even for creation of a new state, you see the advocates only when they go to Abuja, you hardly see them doing anything to sensitize or mobilize anybody in the area they want to be a new state, that needs to stop.

Before you know it candidates for governorship and house of assembly will have real issues to campaign with i.e. support or otherwise for local government autonomy if the people truly desire it. Why do we as blacks find it difficult to advocate for process rather than have someone or a body dictate how we should run our lives, do we agree we are so docile that only a dictatorship or oligarchy is good for us?

^^^^
Well thought out post. You have made some solid points.

But again, the biggest problem I have with your ideas is the 'how', not the 'why'.

Take another look at the bolded part of your post sir. As things stand today, 26 october 2014, the governors call the shots in their respective states and have effectively pocketed the entire apparatus of local government without exception. They hold both the knife and the yam. Do you agree that the current arrangement (in which state governments have forcibly emasculated LGs) is a mockery of true federalism? If you do, then how can you oppose remedial measures simply because they are coming from the rogues gallery called the national assembly?

Once again, how will your ideas work in practice, starting today? The devil sir, lies in the details. Your suggestion reminds me of how the proponents of a sovereign national conference have failed to actualize their goal in Nigeria. Laudable idea, but one of the biggest problems they faced was how to sideline duly elected legislators in favor of unelected 'national conference representatives' - so called representatives who were angling for sweeping powers to determine the future of over 160 million people. Are you surprised the idea of a sovereign national conference failed to gain traction?

You appear to have glossed over the devilish details of how voters in each state will challenge governors today in wresting control of the machinery of local government. Do you think state governors in any state in Nigeria today will stand back and watch voters whittle down their powers (in the name of reforms) without subverting or sabotaging the process? Do you really think so?

In a perfect world, your ideas would fly. In the imperfect system we run here, they are not likely to take root. Yes, you may be right - the motives of the national assembly men who passed this bill may be far from noble/altruistic, but Nigerian voters need all the help they can get from any quarters. Financial autonomy for LGs is a net positive for the system. We can build on that going forward.

Ovamboland:
Dear sir, quick fixes hardly produce well-thought out, enduring results. If we have not experienced sudden death because of the current arrangement, the time to build a foundation of deep democratic ethos is nothing compared to the complacency that will result once big brother Abuja speaks on the matter.

^^^^


I hope no one who reads this likens me in any way to the tortoise in folklore who fell into the cesspit...

Ovamboland:
You are still missing the point that the current one size fits all approach for LG administration is doomed to failure as we currently have. If we need to re-invent our own wheel so be it as the experience becomes our own and not that of another people. The truth is all over the country we have different cultural values and aspirations and different ways we engage with leadership. Why should we be forced to be the same even in the manner of local administration, even the colonial system could not use same system in both Northern and Southern protectorate successfully

What of the learning process of which the society has little or none in designing and setting up a democratic system. If we hinge our lives in never being original and only copying whole sale from here and there our democratic development will remain stunted.

It is very clear that after the financial autonomy is granted by Abuja, the next thing they would need will be political autonomy from Abuja then supervisory autonomy and oversight autonomy and naturally the legislators will have a new ally in any contention with state governments, i guess that is clear. Sincere National assembly will not attempt to play big brother and make laws to allow genuine ownership by local politicians and citizens.

The current proposed financial autonomy is a project owned by the National assembly not the people. It becomes owned by the people when they agitate and strategies for at the state level if they are truly interested in it. The strategy includes ensuring the state legislator representing them believes in the agenda of his locality.

^^^
I guess we can agree to disagree.

I am concerned with how to proceed with the structures we have 'on ground' as at today, 26 October 2014. I firmly believe we do not need to reinvent the wheel, despite the flaws in our system.

My biggest issue is how your suggestions will work in practice. Delist LGs and then what? How long will it take for your suggestions to bear fruit? How will the system run while communities and other groups figure out what they want to do?

There is nothing that says your recommendation for 'home grown' local administration and the lawmakers proposal are mutually exclusive. They are not. The reality is that the current arrangement is NOT working. The lawmakers proposal is a step in the right direction.

Ovamboland:
The problem in my opinion will remain the same, if we cannot as citizens engage the LG actors based on the little they get now having access to more money will make us better engaged.
If the National assembly is sincere and not looking at creating a base of power for themselves in the states they should start by delisting the Local governments from the constitution. They can replace it with a simple statement that guarantees republican government in the state that is the states shall split itself into administrative units according to it's own laws.

Then we will realize the enormous powers over our lives reposed the state assemblies, maybe then we will take serious the type of people we allow to represent us at the important chamber.

What happens now is that citizens don't bother about the characters they allow to represent them in what is essentially a representative system of government, they only focus on the governorship candidate. The top down solution you advocate will never help us strengthen local politics or develop democratic institutions.

If the responsibility for the character of our LG is dumped on our laps some will get it right and some will falter then they can keep tweaking the system copying from successful examples and thereby engage the thought process and hence better understanding of how the system should work rather that expecting some big brother in Abuja to do the thinking on our behalf.
Who is the better monitor the one who designed the system or the one handed a finished product with a manual?

^^^^
How does your suggestion about 'states splitting themselves up into administrative units according to their laws' work in practice?

There is no need to reinvent the wheel sir. Federalism is not a new concept. Let's take a Brazil for example - it is a federation with a central government, states and municipalities. The municipal governments have both executive and legislative functions - the only exclusion is judicial powers - these are reserved for the states and the federal government in Brazil. Municipalities in Brazil make their own laws, collect taxes and also receive funding from the state and federal governments. What is so special about Nigeria that states do not want LGs to stand on their feet?

The proposal made by Nigeria's lawmakers is just one small step in getting rid of the current aberration in our system in which LGs are near nigh useless (because they are appendages of the state government). I am not advocating a 'top down' approach in deciding the character of our representative democracy. No. As I conceded earlier, our system is imperfect. But we do not need to reinvent the wheel. Financial (and other) autonomy for LGs is a straightforward, sensible, practical step in the right direction, and the lawmakers bill appears to be good legislation. The only thing I would add is that our institutions and checks/balances need to be strengthened (as a matter of life and death) or this bill will leave things unchanged or even make them worse. There is no point exchanging corrupt and incompetent state governments for corrupt and incompetent local governments.

I am not sure I agree with you about the reasons for the apathy of Nigerians to the state assemblies that represent them. That apathy will not magically disappear if your suggestions are adopted.

I am curious about your comments on this legislative proposal being the channel for a power grab by legislators. Kindly explain.

pazienza:
Notice that the two governors forum factions are united on this issue, also notice that APC and PDP governors are united on this. Then you would begin to understand that they are all part of the same coin, the looting elites.

^^^
Exactly.

What Nigerians need to understand is that they are not tied at the hip to ANY political party. Reading through these thread, there seems to be a sense of weary resignation that the PDP and APC are the only options. Why? Are there not other parties and candidates?

Seek them out and make your choice!

Ovamboland:
Continuing with your assertions though disagreeing some of your statements, we need to make up our mind whether we prefer a unitary system or want true federalism. Direct allocation from the FG to LG is a victory for the Unitarianism and receding of federalism. That is not to say there are no abuses in the management of state joint accounts but the so-called abuses we need to ask if they are lawful. In some other federal set-up the creation, number, and rules or powers allocated to LG/Counties/boroughs emanates from state laws not from the central government.

We need to understand that our problem stems from the one size fits all approach imposed by some select wise men at the center has been the bane of our democrat experience. The local politics and social engineering has been emasculated. Why should the south-eastern states who fiercely claim to be individualistic and republican be forced to administer themselves at the local level using the organisation as the north-west states who are seen to be more conservative, laid back and take directives from leaders with minimum questions.

Why can't each community leaders draw up their own LG structure and get the state legislature to approve same and keep making necessary changes as challenges come rather than waiting for the FG/national assembly to deliver them from what should ordinarily be a local affair?

If the National assembly can leave it's attempt at populism by attempting to make laws for local administration by making it clear that all communities should approach their respective state legislature for local government reforms that in my opinion will foster robust discussion, meetings, growth of democratic ethos, involvement and sense of belonging and ownership of government system at the local level.

I think we should stop being lazy by simply calling anyone opposed to our idea a thief (not saying stealing in not going on o!) and think of practical ways to solve the problem of LG administration without violating the federal system of government we have currently adopted

^^^
I agree with some of your ideas. Some, not all. In a broad sense, your suggestions mirror how the system should work: communities and local groups meet and decide on how they want to live and how they want their government and affairs to run. They then communicate these decisions to the states and the federal authorities. If our system were working properly, the approach would be 'bottom up' and not the 'top down' anomaly currently in place.

However, the issue at hand is very clearly defined. It is not a broad theme or policy thrust around which there may be legitimate grounds for opposition. The matter at stake is a legislative proposal (imperfect though it may be) to grant autonomy to LGs and governors are dead set against it. Why? What are they afraid of? Why would state chief executives oppose any measures which would (ostensibly) promote more openness in the system?

The reasons they are afraid have been clearly spelt out on this thread by some other posters.

Nigerians should not just watch, they should ACT.

playboy19:
I'm only replying this for the sake of those reading this or will be reading in the future. Don't get people thinking that an import permit is the same thing as FG allocation. They are 2 different things entirely. Import permit means, go ahead and import your own fuel, while a FG allocation means, please import fuel on behalf of the government and we pay you subsidy. Which is only restricted to 7 companies at the moment. That's the difference.

Secondly, it wouldn't be wise to deregulate the price of product, it will only mess up the downstream industry the more. Plus subsidy didn't create any corruption, rather, the whole subsidy 'scam' was created out of sheer corruption. We shouldn't make the impression that the system created corruption, when in truth, the whole system was created with minds full of corruption. To perpetuate it in full scale without consequences.

^^^
Well said.

atlwireles:
Thanks for the polite back and fort. Something truly missing on this forum. Good night.

^^^
Good night.

atlwireles:
Nigeria is not selling crude at cost plus markup. The Nigerian government has resolved to sell crude at the international price. Please get over that. Before Obj changed the price formula, NNPC would not account for their 445,000 barrels.

Thou illegal, I have heard companies import without PPRA permit. Guess what, petrol is 120 in my area, that's the average, those in Lagos buy at 97, most Nigerians do not. There are places in this same country where petrol sells for N140. That's why this subsides joke must be stopped. So, importing directly without subsides has an upside to it. Just don't get caught.

Scarp PPRA and allow people buy, produce and sell petrol for whatever price, the market will support. This one single action will fundamentally transform, the down stream sector. Also, the structural defect in governance and their inefficiency plus corruption this subsides regime has created will disappear.

The social cost will be minimal and limited.

^^^
There isn't anything else to say.

This back and forth has been on for hours.

You have your position and I have mine. Time will tell...

atlwireles:
NO it does not strength any of your argument. Let me tell you straight, when Dangote finishes his refinery, the product NNPC buys from him or any other reseller will follow the same formula. dangote will not buy crude in open market and sell it to you for less. He does not love Nigeria that much. You people keep confusing the subside with importation, please, it not the same thing. Petrol subsides is social welfare program in Nigeria, where government, absolves some portion of petrol cost to her citizen. The source of the product being subsides here is immaterial. It would come from anywhere.

If you build your refinery today in Nigeria, your product will cost more than N97. If NNPC decides to buy from you, you simply become our new
mother vessel.

^^^^
On the contrary sir, the bolded part of your post is central to the discussion. The source of the product IS material to the discussion.

Why would Dangote buy dollar denominated crude oil from another country and sell it here in Nigeria for local consumption*? What would be the justification? (Apart from supernormal profits earned as a result of guaranteed 'subsidies') If the government sold crude oil to the NNPC at cost price plus a mark up (for opex and other costs) there would be no need for any 'subsidy' and all this nonsense would stop.

Let me remind you that another poster on this thread said there are a number of oil importers who import oil without any government subsidy. And according to this poster, these importers still make a tidy profit. Is this poster wrong? Because if he is right then your argument just got blown out of the water. Again.

The solution is staring us in the face. Build the damn refineries.

* P.S. I am aware oil producers sometimes import crude for blending. Lets abstract away from that for now.

atlwireles:
Is there a government subsidy program for these commodities? Nobody stops you today from importing rice, palm oil, groundnut cotton in Nigeria. As long as you pay your duties, no one really cares. Also, you have no guaranteed profit from government. On the other hand, you invest locally and resell this same product for whatever price the market is willing to pay. Your comparisons here is off.

^^^^
Excellent point which strengthens mine considerably.

Nigerian governments DO subsidize agriculture. But note that they subsidize local production and NOT importation. (there are some exceptions but we can ignore them for now). We have the distortion in the oil sector because this government and its predecessors chose to 'subsidize' importation rather than local production.

For nearly 9 pages now, I and others have been saying: Build new refineries and cut off the gravy train (of refined petroleum product importation). No matter how you dice it, it makes no sense to claim the government cannot build new refineries locally, only for the same government to then 'subsidize' imports at exponentially higher costs. For the last time I will ask you: Does this make sense?

atlwireles:
What a great line, ask yourself who is privatizing the gains and socializing the loses? I don't care what petrol sells for, frankly it makes no difference to me. Nigeria is poor a very poor country any how you dice it. You can make all assumption you want, but treat crude oil like a commodity. That all I really care about.

^^^^
As I asked you in one of my earlier posts: what is the extent of your advocacy for 'appropriate' (i.e. 'global') pricing in local transactions involving ofada rice, palm oil, cocoa, cotton, maize and groundnuts? These are commodities too. Why your insistence on crude oil?

I have made several points to which you have not given a response. You know what these points are so there's no need to repeat them.

I knew this was how it would end.

atlwireles:
I like your nice semantics. "Cost of lifting" and "account for crude oil with international price". In my world is Naira and kobo. You've said nothing different.

Thanks for this chat, I have to go.

^^^^
That's not good enough sir.

People have given very cogent reasons why the principal actors in the current government (and others before it) should be in the dock answering hard questions. You can't give a perfunctory defence and leave it at that.

This government (like others before it) is criminally incompetent. It cannot cut the waste at the highest levels in its operations but it is remarkably purposeful when it comes to policies which hurt the most vulnerable. What is sad is when people like you come here and try to defend the indefensible.

The government sells crude oil to the NNPC at international prices (if what you say is true). No doubt the reasons given for this will be something along the lines of 'instilling discipline to compete at market rates and prices', etc. Things begin to unravel when we consider the actual outcomes - outcomes such as the inexplicable refusal of this government (like others before it) to invest in new refineries. Is granting 'subsidies' to import refined PMS/DPK/AGO a sensible course of action? 'Subsidies' which far exceed the cost of new refineries? Whose interests are served by this?

You can't privatize the gains (among a chosen few) and socialize the losses.

Nigerians are being held hostage by their own docility and stupidity. We do not want to hold our governments accountable!!! This is the price we pay for our actions.

If the government cannot build refineries, it might as well privatize the provision of all public goods and all forms of infrastructure. It has become fashionable for irresponsible governments to abdicate their responsibilities in the provision of public goods. Interestingly though, these same governments retain a monopoly on the so-called 'legitimate' use of force. This is one area the government is not willing to privatise or deregulate. As things stand today, I or any other citizen who so desires cannot set up and run a private army or a private police force. Why is this so?

bushdoc9919:
[

Norway has a population of eleven million people, is the world's second largest producer of oil, and has a strong diversified economy with a strong industrial component.

Nigeria produces far less oil, and our industries barely exist.



You keep avoiding the elephants in the room...the fact that

1,Our refineries are not producing at full capacity

2.The fact that we do not have enough refineries

3.The fact that we are importing refined crude...at market prices.

All we need to do is to increase domestic production....if you want a subsidy that works.

^^^^
The only elephant in the room is that the government has refused to invest in new refineries. Not only that, it has also put in place a 'subsidy' on fuel importation (not on local production but on importation!) which discourages prospective investors interested in building new local refining capacity.

blym4real:
I am baffled by your answer. Nigeria government does not have the money to build refineries.

^^^^
I am equally as baffled.

If as atlwireles says, "the government has no money to build refineries", then where is the money to finance the importation of refined petroleum products going to come from?

atlwireles:
Whatever pricing formula you look at, the facts start with NNPC paying the same price for 445,000 as you would in the international market. The race starts from there.

^^^^
Another poster is disputing your assertions about NNPC's purchase of crude at international prices. He has also disputed your claims about local production costs per litre. Remember I asked you these same questions. Are you absolutely sure of what you have said so far?

atlwireles:
The price NNPC pays, is based on the 30 days NYSE average. NNPC is not buying crude at cost, they pay the same price as shell, chevron and Exxon. Back in 2012 when price was set at N97, a barrel was almost $120. Today price is down to $81, we are actually paying more for petrol in Nigeria today, than someone in west Texas, today. This was the same thing that happened with Yaradua, when he reduced price to N65, only to regret it 6 weeks later. Because crude jumped by almost 40%.

There are people that want to sell oil at cost. I am not only of them. Oil is a commodity, like cocoa, rice, palm oil etc. Let try it that way. That's all Nigeria is trying to do.

^^^^
Its getting murkier and murkier. I am still trying to decipher the link between the cost price and pumphead price per litre of PMS (petrol) sold here AND the export sale price to oil majors AND the price of gasoline in the USA.

But some things are remarkably clear now. Apparently you do not believe that crude oil should be sold to the NNPC at cost price, and that global prices should apply to local transactions. If we apply that logic I would like to believe that cocoa and tea extracts sold by Nigerian farmers to the likes of Nestle, Cadbury or anyone else should be sold at international prices. I would like to believe that you have advocated the sale of palm oil to housewives in Wuse market at international prices. I want to buy Ofada rice and Idah cassava at international prices in our local markets and I want the government to superintend this. Isn't that a fair argument?

I do not want to go off on a tangent sir. The kernel of my argument is that if the cost price per litre of locally produced PMS/DPK/AGO is lower than the pumphead price, (low enough to make normal profits) then it makes absolutely no sense for the Nigerian government to dis-invest in local refining capacity and then turn around to run a criminal, thoroughly compromised petroleum product import scheme. Does it make sense?

atlwireles:
I am trying to post the PPRA template, without much success. If we use the current price of N97, based on a barrel of crude oil selling for $95 including refining and landing cost. N40 becomes an approximate pump price.

^^^^
I see.

I do not quite understand the math here. (My limited education was obtained in a provincial setting with angry, disgruntled math teachers but that is a story for another day). But again, let's take your figures as given.

If 'all in' costs amount to NGN40 per litre (I assume we are talking about PMS here) and the pumphead price is NGN97 per litre, could someone explain what is going on? Is there or is there not any markup or subsidy in this equation?

atlwireles:
The price to get crude from the ground to a loading docking in Bonny or Escarvos is about $30 per barrel for Nigerian oil.

If, as some of you demand, the government sells to NNPC at cost, instead of the current system, where the 30 day NYSE average is used in setting the price. Then the price at the pump will be about N40.

^^^
Let me see if I understand you. So it costs $30 to get a barrel of oil from the ground to a terminal at Escravos. Let us take your figures as given.

I do not know how you arrived at a pump price of N40 though. Is that the pumphead price per litre before or after all refining and associated costs have been factored in?

atlwireles:
Anybody calling Nigerian Oil subsidies a scam, is not worth much weighted up or down. You called yourself an industry insider, so you know the cost of production for Nigerian crude is about $20-40 per barrel.

Please lead another demonstration, so government can sell you petrol at cost price. You wonder why you people are dying of poverty, because some of you are constantly trying to reinvent the wheel. Goodluck with your free/cheap oil.

^^^^
Your post above quotes Nigerian crude barrel costs at between $20 and $40 per barrel. (again your figures, sir).

Once again, I ask, what does that translate to in Naira per litre?

atlwireles:
I love this, Nigerians always living in a different universe. People like you should push for production cost, pricing, which stands at about $30 a barrel for Nigerian crude. Then you might have a N40 per liter price. Please enjoy your driving.

Even in 2014, some are still living in delusion.

^^^^
Kindly explain your point above, sir.

I notice you are comparing production costs (your figures, sir) of $30 per barrel with a N40 per litre price. Apples and oranges?

playboy19:
Sir, you have asked a very valid question that any sensible Nigerian should be asking but unfortunate, politics wouldn't let you get the answer. You may think Nigerian business men were not thinking about building refineries and all the benefits that comes with it, but politics wouldn't let it happen. Like i said earlier, the whole subsidy thing is a large and long standing fraudulent scheme called the 'Nigeria political compensation scheme'. Let me quick give you an example, go back to your archive and check out the 2011 'Friends of Jonathan' presidential campaign fund-raising programme and match the names of the people in attendance with the names of the people indicted for subsidy scam and see what you get.

These are the lobbyists. The ones you call the cabal. So sir, there, is your answer. Like a wise man once told me, buying is cheaper than begging, while stealing or taking is cheaper than buying. These people would rather falsify Bill of laden and delivery documents and get gauranteed fraudulent subsidy cash as compensation for their campaign investment than go thru the hassle and risk of doing the real business, which to me is dumb.

This is a very complex topic to discuss, it takes a first-hand experience of the whole thing to really understand it. Fortunately, Nigerians partially rose up to them and the result; the cabal has been broken back to the original 7. Now the rest have to really do the work and get compensated in another way. This answers why Dangote is suddenly interested in building an $8B refinery with majorly local 'partners'. It's a little complex sir. Just a little...lol

^^^^
Sir, I have been watching the exchange between you and that other fellow. I noticed he has carefully avoided giving answers to the questions you asked. I will be asking him a few questions of my own too in a few minutes. I hope he responds.

When bushdoc started this thread, some posters commended him for his points and called (those who disagreed with him) illiterates. Their mistake is that no one really knows who is lurking behind any given keyboard.

My repeated questions about cost profiles for local PMS/DPK/AGO production are based on my 'crude' understanding of the concept of price discrimination. I expect local producers/refiners to pay less than the international price of crude oil for very compelling reasons which should be clear to all. That is the basis for my shrill questions (which by the way still stand and demand answers).

Some of us know the drill. We know a little bit about what's going on behind the scenes but we need the defenders of the status quo and the forces of reaction to state their own side and slowly expose themselves bit by bit. That's why we ask the questions we ask. If only more Nigerians could ask more questions AND demand answers. If only...

bushdoc9919:
Before you send me to the stake consider this

1.Our refineries are not operating at full capacity

2.Even if they were operating at full capacity...we still have to import to make up the projected shortfall in domestic production (and recall that oil prices are very high....and are set to rise up).

3,And we are paying subsidy money, on top of the billions spent on importation(and some oil subsidies are being paid to importers)

4.And we are not producing enough fuel....we produce far less than the UAE and even Saudi.

That is the problem....ultimately the oil money is not enough and the subsidy money needs to be spent on industrial support infrastructure...so that we can get off oil.

Oil is a curse.

^^^
No sir, oil is not a curse. Oil is what you make of it. For every Nigeria (that has turned oil into the devil's excrement and mortgaged the future of its generations unborn), there is a Norway (a country in which unborn children will start life with a surplus in nearly every sense of the word).

As I have said on this thread and others, Nigerians need to know from the powers that be how much it costs to produce petroleum products LOCALLY. We need to know!!!

We have been lectured (time without number) on the high landing costs (dollar denominated) of imported fuel simply because that strengthens the argument of those who advocate the removal of the so-called subsidy. But so far, I have not been provided incontrovertible proof of the cost of local production of a litre of PMS, DPK or AGO. And we all know why.

If indeed there was no monkey business going on, then the statistic I am asking for should be at every government functionary's fingertips i.e. it costs NGN40 or NGN50 (or whatever) to produce a litre of locally refined PMS, DPK or AGO in Nigeria. Why is it so hard to get the truth?

bushdoc9919:
You are asking the good questions....and to answer it all, I would say we need to produce more fuel for domestic consumption. That in my mind is where the problem lies.(Which is why Dangote better hurry up and build the refinery he promised....instead of spending so much time talking about it).It is because we are importing fuel at the high world prices...that is where much of the subsidy money is going to. (and if international oil prices go up...especially with the Iraq situation......oil subsidy money may have to go up too.)

(Of the countries you mentioned, Venezuela and Saudi also produce far more oil than Nigeria....and for lesser populations (Venezuela 37million, Saudi 11 million). Brazil has invested a lot in something called 'green fuel' which is made from sugar cane , and is mixed with the regular fuel (Of course Brazil also has a diversified industrial economy...meaning everything has to work for the industries to work well....including fuel supply)

To sum up....Nigeria needs to produce more oil. If we were producing all of the oil for domestic consumption here in Naija...then the current subsidy regime would have made sense...but this one where we are importing much of the oil we consume at home from abroad...and we expect to pay cheap prices ? Something's got to give.

^^^
Thank you for your response bushdoc. You are actually strengthening my argument. You acknowledge that it makes more sense for us to drill and refine locally rather than import expensive, dollar denominated refined petroleum products. The question is this: why don't we?

Your points about the population of Venezuela and Saudi Arabia (compared to Nigeria) are tangential. Oil production technology is scalable. Nigeria has proven reserves. All that needs to be done (to meet rising demand) is to raise refining capacity (i.e. build new refineries). Why is it that Nigeria cannot do this and the Brasilians and the Saudis can? Are they supermen?

I reiterate my question: how much does it cost to produce a litre of DPK, PMS and AGO here in Nigeria? That is key to resolving this matter once and for all.

bushdoc9919:
Tis a lot of money....that would have been spent on a lot of things like infrastructure projects, universities, etc...

But we wanted cheap fuel (Which we REALLY can't get because we are producing less than we need for domestic consumption, but let's not get too factual here).

The honest truth is that we are importing fuel, the govt does not have money to build new refineries (and the private refineries promised are on the drawing board). Meanwhile, we are exporting less petrol than the United Arab Emirates....and for a population of 160million people(UAE has 8million).

The sad thing is that the fuel subsidy has to go. Yes, we will get high fuel prices, and I for one don't like having to pay up to N200 for a liter of fuel under the new regimen. But the sad thing is that we are pouring money that we do not have down a bottomless pit....and it is high time we stopped.

Ultimately, Nigeria has to get off oil....and become an industrial society. Maybe the oil subsidy money can be used for things like roads, railways, power, etc...that would fuel our industrail development...leading to jobs galore, and an end to unemployment.

But we Nigerians want free things. We don't want to work for our supper. The rich want their free bee money and the poor want their free fuel...Both want their slices of the oil cake...with no thought as to how the cake is baked.

Oil is a curse.

^^^^
bushdoc9919,

You still maintain your position on this subsidy matter. I asked a question on the thread then, and I am asking again:

How much does it cost to produce and refine a litre of fuel LOCALLY in Nigeria? How much does it cost to import a litre of fuel from Norway or Venezuela or wherever? Is there really a subsidy on locally produced fuel? Does it cost less than NGN97.00 to produce a litre of locally refined PMS here in Nigeria? If so, by how much? Or is the so-called subsidy actually on imported fuel and we do not want to admit it? Which of course raises the question: why is Nigeria importing fuel which can be produced locally here at lower cost?

I also have another question: there are several other oil producing countries (Brazil, Venezuela, Saudi Arabia etc) with state owned utilities which produce enough petroleum products for local consumption as well as for the export market. These state-owned oil utilities also turn a profit. Why should Nigeria's case be different?

According to you, the government does not have money to build new refineries. How will the fuel imports be financed then? Where will the money come from?

Once again, how much does it cost to produce a litre of PMS, DPK or AGO locally here in Nigeria? That is the crux of the matter.