President Goodluck Jonathan’s plan to deregulate the downstream sector of the oil and gas industry as contained in the proposed 2012 budget (made public a fortnight ago) has been greeted with harsh criticism by millions of citizens. Reasons: deregulation not only allows market forces to determine the price of petroleum products, it also empowers the Federal Government to hands-off the payment of any form of subsidy enjoyed on those products by Nigerians.

In Nigeria, given the absence of functional refineries which makes the country a net importer of products, subsidy removal translates to an immediate increase in pump price of petroleum products, notably on petrol and kerosene the two products currently being subsidized by the government. Diesel and aviation kerosene businesses had long been deregulated with prices soaring higher and higher everyday with trends in the international market.

And that obviously is where the bulk of citizens fault the policy: given Nigeria’s vast crude oil potentials, citizens ought not to buy petroleum products, bye-products of crude oil, at prices dictated by international market forces which is what deregulation will do on petrol and kerosene. But what if the policy has other stronger merits both to individual citizens and the larger economy, deserving consideration from critics? What if proponents of deregulation – and fuel subsidy removal – are right after all? What if the nation is losing and private greedy government officials and their cronies are actually the beneficiaries of the subsidy scheme as alleged by many?

A case for subsidy removal
In 2008 alone, the subsidy fees paid by the Nigerian government to maintain a uniform price regime in the sale of petrol and kerosene throughout the country were put at over N630billion. That amount was equivalent to about 50 per cent of the capital budget of the Federal Government. It is believed that the Jonathan’s government has so far spent in excess of N850billion in subsidizing the price of petrol and kerosene in the last 17 months.

But even more worrisome is the alleged graft (bothering on misapplication and misappropriation of earmarked subsidy funds) by top officials of the Petroleum Ministry, the NNPC, and relevant establishments administering the subsidy scheme.
It is an allegation that has been hovering in the air for the past one decade like a paratrooper who is finding it hard to be dragged down to earth by the force of gravity.

The gravity, however appears to have sprung into force last week with a probe opened by the Senate to look into what appears an over-inflation of subsidy figures in the 2011 Appropriation Act. According to Senate findings, N240billion (or N20billion monthly) was allocated for the implementation of the fuel subsidy policy in the 2011 Appropriation Act. Out of the N20billion monthly allocation, N11.2billion was voted for Domestic Fuel Subsidy (going to the NNPC) and another N8.8billion to marketers.

But intriguing to the Senate was the discovery that although N20billion was set aside for subsidy in a monthly basis in the 2011 Appropriation Act, the total sum of N165billion was expended in August 2011 of which the NNPC got N88billion and independent marketers got N77.7billion. Interestingly, although N240billion was budgeted for the entire 2011, a total of N931billion had so far been spent as at August ending, and this to any curious or discerning mind translates to a variance of N771billion or 700 per cent hike above the figure originally budgeted for.

As noted by Senator Bukola Saraki, in the first three months of the year, both the NNPC and independent marketers did not exceed N62billion monthly, but within the last three months, the figures had shot up to between N150billion and N186billion. Saraki reasons that by the end of the year and going by the trend, the nation would have spent about N1.2trillion on fuel subsidy as against the N240billion budgeted for the programme. “This expenditure is treated as a first line charge and by implication all other expenditures including capital expenditures and even distribution to states and local governments is secondary,” Saraki noted.

“The processes, audit, scrutiny and value for money in the entire subsidy management system lack transparency and control as the costs have continued to maintain an upward swing,” he concluded. It is even also alleged that because of the free money provided via the subsidy scheme, emboldened as the bulk (about 90 per cent of the nation’s petroleum products is imported) those managing the refineries would rather prefer to sustain the import and subsidy regime than see to the proper repair and maintenance of the nation’s four-state-owned refineries to make them functional as that will not be to the personal interest. “There is so much money to be made from subsidy scheme, ” a source told Daily Sun.

“Those who benefit would not want it stopped; they wont want the refineries to work, and they wont want deregulation of the sector either,” he added. Senate President, David Mark admitted the presence of what he referred to as “a cartel” defrauding the country via the fuel subsidy scheme and even queried the veracity of the figures quoted by government. “How much do we spend on subsidy?” Mark queried. “Who are the beneficiaries of subsidy?” “And has subsidy achieved its goals and targets?” These may appear rhetorical, but deserving further serious probe by appropriate auditing agencies if Mark and his team at the Senate are serious at resolving the myth surrounding the fuel subsidy.

Indeed, the many cases of graft reported in the management of the nation’s fuel subsidy scheme have been highlighted repeatedly by proponents of its abolition as one core reason to discard the scheme. Of what use does it serve citizens when in one accounting year, the government spends N1.5trillion on petroleum subsidy which is 14 times the value of capital budget for the power sector in 2011, and nine times the sums appropriated for roads, and 24 times the value on the health sector or four times the entire defence and security budget?

The other reason of course is the fact that, given the absence of functional refineries in Nigeria and the quest to get the private sector to invest in the business, it would be difficult if not impossible to get any profit-driven business enterprise to sink in money into the establishment of a private refinery in Nigeria under a regime where the government regulates the price of the end product sold to consumers as is currently being done. The chances of recouping funds, would be hard, and the business may fold up sooner than expected.

This explains why no multinational oil firm operating in Nigeria floats a refinery, they will rather be more concerned in exploring and drilling crude oil and making their money from proceeds sold at the international market at prices determined by prevailing market forces. A free-market environment therefore becomes imperative for economically thriving refineries in Nigeria.
International donor agencies like the International Monetary Fund (IMF) and the World Bank are also opposed to fuel subsidy regimes.

“Although politically popular, subsidized fuel prices have significant downsides,” said Robert Gillingham of the IMF Fiscal Affairs Department. Gillingham in a new IMF Working Paper which underscores how expensive and poorly targeted energy subsidies are noted that “for governments, the subsidies may direct public expenditures away from more productive uses, reduce revenues from domestic production, or contribute to unsustainable budget deficits. “
“At the household level, low fuel prices also encourage inefficiency in the use of energy. And, as a means of shielding the poor from rising petroleum costs, universal energy subsidies are simply not cost-effective, because they inevitably entail a substantial leakage of benefits to higher-income groups,” he added.

President Jonathan knows this very well; but perhaps he is aBosom  with the fraud going on in the management of the fuel subsidy scheme and fears it benefits a few and should be halted. And of course he knows the government is in dire needs of funds for other projects. It is this knowledge that has informed the decision to do away with fuel subsidy next year. The removal is likely to feature in the N4.8trillion budget estimate Jonathan may present to a joint sitting of the National Assembly in November.

Fuel subsidy removal is definitely one price the Jonathan’s administration is prepared to pay; it has other competing socio-economic needs to attend to – from bad roads, schools, hospitals, potable water, electricity, industries and even security – the huge sums spent in fuel subsidies, would be more beneficial to citizens and the economy if channeled into the rehabilitation and building of the afore-listed infrastructure.N1.2trillion (if that were to go into fuel subsidy) would do the nation better if chandelled to infrastructure development than on fuel subsidy. That is the government thinking. Let Nigerians pay more for fuel so the government saves enough money to build infrastructures. However sound or logical this position may appear, Nigerians are bound to receive it with cynicism given the history of past fuel price increases which was hinged on the need to free up funds for capital projects and for which citizens are yet to see any tangible impact from such ‘freed-funds.’

History of fuel price increase
The history of fuel price increase in Nigeria can be traced first to the military era. Fuel price had remained stable at 15koboe per litre for petrol as from 1978 under the regime of Gen Olusegun Obasanjo but it was increased from 15kobo to 60kobo in1990 by Gen Ibrahim Babangida, and he further upped it to 70kobo in 1992 and N3.25kobo in 1993 as part of his Structural Adjustment Programme (SAP) meant to shore up revenue for investments in infrastructural development. And shortly before his untimely exit that same year (1993), fuel price skyrocketed to N11 per litre. All these prevailed under the military era. However, the people hoped for an improved living conditions with the advent of democracy in mid-1999, but they were disillusioned President Olusegun Obasanjo who pushed up price to N20.0k from N11 (in 1998) and up again to N22.0k in 2000.

Thereafter prices kept soaring higher from N22.00 in 2000 to N26.00 in 2001 and N40 per litre in 2003 with the deception that funds would be freed to social infrastructure development just as products would be made more available to consumers. In a subtle way, Obasanjo also commenced the deregulation of the prices of other products like diesel and aviation kerosene by creating an artificial scarcity and subsequently granting licences to private firms to import and sale at market-driven prices.
The Yar’adua government, which President Goodluck Jonathan was a part of, also increased price of petrol from N40 to N70.00 in 2009, but later brought it down to N65 per litre following a crash in crude oil process at the international market that came with the global economic recession.

Since 1978, the fuel price increase has negatively contributed to the country’s GDP downward trend. The tables below summary the effect of petrol price increase to the country’s GDP.?In 1978, the fuel price increased to 15 per cent, while GDP fell by 5.8 per cent. In 1982 the the price rose to20kobo, while GDP fell by 0.2 per cent..In October, 1994 the fuel price fell from N 15.00 per litre to N 11.00 per litre and stood till 1998, while GDP fell by 0.6 per cent in 1994 and rose to 2.6 per cent in 1995.

It should be noted that there exists a negative relationship between fuel price and GDP since the deregulation policy came into effect. Thus, any time the fuel increases the GDP tend to decrease. Deregulation was therefore seen as the panacea to the crisis in government interference in fuel prices. The deregulation policy is a key feature in the yet-to-be-passed-into-law Petroleum Industry Bill (BIP) currently before the National Assembly.

The PIB is based on the report of the Oil and Gas Reform Implementation Committee (OGIC) set up by the Federal Government in year 2000 to carry out a comprehensive reform of the oil industry. It provides the new legal frame work for the organization and operation of the entire oil industry in Nigeria.

Specifically in the downstream industry, where refining and sales of fuel is done, the PIB recommends the deregulation of the industry to allow market forces determine the prices of petroleum products.
 

By LOUIS IBA

Sun Newspaper - Business Report  Monday, October 17, 2011

Source: http://www.sunnewsonline.com/webpages/news/businessnews/2011/oct/17/bussines-17-10-2011-001.html

The police is illiterate, ill- trained, unprofessional and a disgrace to police force. whoever made that comment must be relief of his duty.  SHAME ON NIGERIA POLICE !!!

My dear am sincerely very sorry for that. I keep on telling guys of same like mind that is totally barbaric. Clean ur eyes. Try to join a christian group and God will surprise u with a super genuine lover ! sorry my dear.

At time you will be pissed up with some stupid nuis(news)sance in national dailies.

Director-General of the National Youth Service Corp said call-up letters for prospective corps members will now bear their photographs.

He said this was part of the reasons for the upgrading of its computer centre.
Gen. Tsiga said this would help curb the incidence of fake corps members.

He said it would also help stop the activities of people who issue fake NYSC discharge certificates.
He said: "This project is to complement our earlier attempts at encouraging proper record keeping and instilling the spirit of maintenance culture."

Bro i dey feel ur Bosom , for ur profile pic     

from where did they get their statistics. They sit in the office and manufacture the statistics as if it is the real reflection of what is on the ground. Nigerians is there anything like National Statistics Bureau? Can anybody say that the so called satistics body has ever questionened him/her from time to time?? so from where are they doing their statistics analysis ? the percentage may be near to the truth in the sense that we know how to get our own statistics in Nigeria. Simply calculate the percentage of the people that are unemployed in your family and that of your neighbour's own to balance the doubt ratio. you all will agree with me that the true statistics is around 95% of Nigerian s are poor. Quote me anywhere

American lecturers at the American University of Nigeria, owned by the former vice-president and now presidential aspirant, Atiku Abubakar, earn one million dollars per month.
This was disclosed by Abubakar, at the second National Joint Education Stakeholders Action Coalition held in Abuja on Thursday.
According to him under the salary was part of the negotiations that he had with an American university in Washington D.C in the United States before it allowed the lecturers to come to Nigeria.
Atiku said, “Today I do not derive one kobo from all the investments I have made in education. Rather, in the university I still continue to pay the American lecturers one million dollars every month because the school fees that they are charging are not even enough to fuel the generators that they are running because the university was built to American standard. Because I have a special agreement with the American university in Washington, managing the university and everything I do must conform to American standard.”

source: onlinenigeria.com

I was highly saddened when I read this disgraceful speech. I a country where people go to bed on empty stomach that somebody pays im dolars per a month to American lecturesers. Since there school fees are not up to fuel the generator of the university, from where did Atiku get the money he pays??

He  established this university when he was the vice president, why did he not fix the power problem, instead collected a bribe to destabilise Nigerian power sys (confirmed Harributon bribery indictment)

The highest professor salary scale in Harvard University London is $206, 000
http://www.jobs-salary.com/harvard-university-professor-salary.htm


Nigerians help me ask Atiku where he got this money he pays and if he does not know how disgraful his action is??
Is very painful

Area!!!!!!!! I thought Warri no dey carry last!!!!!!!!!!!!!     lol!

what could be the cause of this new mystery, terrorism, or attack on thousands of black birds and fish that died mysteriously in the U.S state of Arkansas. The preliminary report by the officials said that they died simply out of trauma. However there are speculations that these birds died out of a a foreign attach - chemical, biological or even spiritual attacks. coincidentally or of the same causal effects,  thousands of fishes are also reported to swept on shore dead in the sam Arkansas state, in a small river bank.
 For now one thing is certain, it is a mystery to experts and there has not been any record of a similar incidents in U.S in the past. What the do u thinks??  give your comment.

There was pandemonium on Wednesday at a section of Mile 4 axis of Port Harcourt, as a housewife gave birth to two padlocks. The strange twin objects were delivered in the early hours of the day.

Although facts of the unusual delivery remained sketchy as at press time, it was gathered that the ‘mother’ and the padlocks had been taken to an undisclosed church for prayers.

Sources told Daily Sun that the expected joy of a mother and her husband turned to overwhelming pain and embarrassment when after a protracted labour, the woman delivered the two strange objects. After the initial shock and confusion, the husband of the woman (name withheld) was said to have contacted the leadership of his Pentecostal church for spiritual advice.

Consequently, the housewife and the strange objects were later taken to the church where the general overseer was said to be praying for her. When contacted, at their Chief Amadi Street, Mile 4 residence, the woman’s husband who identified himself simply as (name withheld) confirmed the incident. He told Daily Sun that his wife had been taken to the church and declined further comments, promising to give details later.

Expectedly, curious visitors had besieged the home of the couple when Daily Sun visited the area. It was gathered that the woman had been pregnant for 15 years. Family source told Daily Sun that her problem started after the woman, a graduate of Geography, gave money to a close relation who was in dire need of help.


source: http://www.sunnewsonline.com/webpages/news/national/2010/dec/30/national-30-12-2010-007.htm

here in MACAU China, Edo and Delta girls full Chinese sauna and people come and fuc****k them for a pay. They are not even ashame of it and they say they are 'working'. you Edo and Delta girls are shameless and a disgrace to Nigerians!! Shame on all of you hot clitories prostitutes!!!!!!!  . they even bring new girls who do apprentice for sex for them. shame on all of u!!!!!.

All of una wan come out, no problem,  u na go still say "please u wan go back"

China's exploitation of prison labor to make low-cost products for export to the United States and other countries, is only part of the story. The Chinese export prison workers to African countries as expatriate. The case of a Chinese construction company building a road uses seventy percent to 75 percent of the construction workers who are known to be prisoners. Each year, thousands of Chinese laborers are sent to Africa and other third-world countries to build roads and work on construction projects. Governments should insure that prison labor is specifically banned before they sign any contracts with Chinese companies; not minding that all wear the same identical appearance and gray cotton suits. Exploitation of prison labor is an abuse of human rights and of commercial practice.

The German paper Der Spiegel reported opposition politician Michael Sata's claim that 80,000 "former prisoners" from China were working in Zambia. Getting more specific, Richard Behar in Fast Company said that he had interviewed an immigration "consultant" in Zambia who said she had "processed paperwork for hundreds of Chinese prisoners."

Stories about China Civil Engineering and Construction Corp (CCECC)'s $8.3 billion Lagos-Kano railway modernization contract have circulated in Nigeria and in the international press. The editor of Foreign Policy, Moises Naim, for example, mistakenly claimed in the New York Times that China was giving $9 billion in aid to finance this project. (There was actually no aid offered, although a preferential export credit of $500 million was discussed in connection with the railway). However, I've read that CCECC's price for the new railway was "hugely inflated," that the project was hastily delivered to CCECC without proper tendering, and that there was not an inadequate "front end design" and/or feasibility study before awarding the contract.

Prison labor is commonplace in China. Given the high levels of corruption, the need for local governments to raise revenues, and the multiple Chinese actors operating overseas, it's plausible that a contractor could make a deal with local prison officials.

NIGERIAN GOVERNMENT (IMMIGRATION) WAKE UP!!!! DO YOU KNOW OR INVESTIGATE THE BACKGROUND OF THE PEOPLE YOU GIVE WORK PERMIT,  OR CHINESE  WORKING WITHOUT WORK PERMIT, EVEN THE OVERSTAYED CHINESE IN NIGERIA. 

STOP TAKING BRIBE FROM THIS CHINESE AND GIVING THEM RESIDENCE/WORK PERMIT; WHILE MAKING HIGHLY SKILLED NIGERIANS UNEMPLOYED!!!

OPEN YOUR EYES ALL NIGERIANS ANYWHERE YOU ARE!!!!!

Hmmmmm

Sorry Sir this is only federal reserve and not standard of measurement for richest nation (economics).
Well and good is still a piece of information.

Australian Prime minister Sir!

I dey laugh ~~~

Easy win for Jonathan (who is God's sent)

Test you thinking ability

The former president, who is PDP’s board chair,  also reacted to the rising opposition against President Joanthan's aspiration by some northern political leaders describing it as normal in politics.
"Ganging up or not ganging up, factions and alliances are normal parts of politics and there is nothing wrong. what matters is that at the end of the day, whatever the result, we will all accept it,” he said.

Commenting on the chances of Jonathan in the forthcoming PDP primary election, Obasanjo said: "I believe he will do his best and once he does his best and the party, PDP, does its best, we will be satisfied with the result."
Asked who he would be voting for as a delegate at the party's  primaries, the former president simply said: "Well, I might as well tell you who I will be voting for in the election. I thought that is meant to be secret."

Reminded that who he would vote for may actually be an open secret having recently led the party to endorse the president at its zonal meeting in Ibadan, Oyo State Obasanjo, while noting that the zonal chapter had the rights to do that, said:  “Since in our party, you start being a party member from the ward level, then to the state level, to the zonal level, you must be an active party member in whatever is being done at  any of these levels. So I was there at the zonal meeting and whatever my party decides at that level, I cannot say to hell."

While responding to a question on media reports that he might have withdrawn his support for Jonathan, Obasanjo, who lashed the media for such reports, said:  "I am the chairman of the party (BoT), whatever my zone does, I cannot disagree with it. But when we then have to meet as BoT, I chair that and then I direct the affairs of BoT as necessary.”
Expressing confidence that the next election would be conducted successfully, the former president urged Nigerians to stop judging and condemning themselves by the standards that other people draw up for them, adding, "We must decide what is the best standard for us and use that standard truly."

Below is the question-and-answer session with Obasanjo.


Are you optimistic that your party is going to win next year's presidential election?
My party will do the best and once my party does the best, the best will be good enough for my party.

You were absent at the declaration of President Jonathan last weekend, why was that?
I was not there because I was in Kingston,  Jamaica. A friend of mine, very close friend of mine, Carl Masters, lost his father when he and I were together in China, and since he was with me there and he is a good friend of mine, he said look, I would want you to come to the burial of my father and pay tribute.

Are you optimistic that President Jonathan will win the PDP primaries?
I believe he will do his best and once he does his best and the party - PDP - does its best, we will be satisfied with the result.

You are going to be a delegate sir, who would you be voting for in the PDP primaries?
Well, I might as well tell you who I will be voting for in the election. I thought that is meant to be secret.

But you just led the South-west to endorse Jonathan?
South-west PDP chapter, one of the six zonal chapters, and it has rights to take a decision as to where, as a chapter, it believes it should go.  Since in our party, you start being a party member from the ward level, then to the state level, to the zonal level, you must be an active party member in whatever is being done at  any of these levels. So I was there at the zonal meeting and whatever my party decides at that level I cannot say to hell .

There are reports in the media that, may be, you will not be backing the president again?
I didn't  see that because the media is a fool. The media that says that is either a fool or mischievous.   I am the chairman of the party (BoT), whatever my zone does, I cannot disagree with it. But when we then have to meet as BoT, I chair that and then I direct the affairs of BoT at necessary.
God has given you the opportunity to rule Nigeria for 11 and a half years...

So you are counting the number of years?
...We will be 50 in a couple of days, how would you describe Nigeria at 50?
You will hear when we are 50.

How would you react to the fact that some politicians in the North are ganging up against Jonathan?
Ganging up or not ganging up, factions and alliances are normal parts of politics and there is nothing wrong, what matters is that at the end of the day, whatever the result, we will all accept it.