Friday, 7 October 2011

The Oracle Vs FG On The Proposed Removal of Fuel Subsidy

I am just a local Chief Priest and I may not understand the economic indices that point towards the purported annual savings of 1.2 Trillion Naira once fuel subsidy has been scrapped by the federal Government, but, I am aware of the untold hardship the common man shall pass through...I don't even need a vision from the 9ja's great Oracle to tell this!
Nonetheless; as duty demands and in the spirit of 'due process'; I consulted the great Oracle and these are his words:
  • Yes! According to economic indices; The actual fuel pump price is N144.70 but the official pump price is N65 . This means that the Federal Government pays N79.70 for every litre of fuel consumed in Nigeria. Since about 32 million litres of fuel are consumed daily in Nigeria; it means that to subsidize fuel; the FG pays N2.6 Billion everyday; N18.2 billion everyday; N72.8 billion every month and N873.6 Billion every year. 
  • If the fuel subsidy is scrapped, the FG can make a yearly saving of N1.2 trillion; which, according to them, would be partly used to develop poor segments of society and cushion the effects of the subsidy removal.
  • Again; since there is no way of telling the actual amount of petrol sold by petroleum dealers and due to an average Nigerian's affinity for cheating; all a petroleum dealer needs to do is come up with a doctored figure of sold petrol and claim pay for subsidy from the FG. FG believes that she has been wasting huge sums on subsidy payments for fuel that was never sold within Nigeria in the first place.
  • FG also argues that the removal of fuel subsidy would, at the medium to long term, increase infrastructural development and investments around the country.
  • Removing the fuel subsidy, according to the FG, is a call for sacrifice by the common man for a better Nigeria of tomorrow. Haba! Great it like 'Ask not what your country can do for you, ask instead what you can do for your country'?

Shhhhhhh! The Oracle is still speaking!!!

On paper, as is usual, removing the fuel subsidy would be of benefit to the Nigerian economy...mark my words, ’ ON PAPER’. What then would be the reality if fuel subsidy is removed?
  •  The Common man, who provides his own electrical energy both for personal and commercial use; would have to pay more than twice what he is presently doing for fuel. This would increase the cost of goods and services with income remaining virtually the same and unemployment rate still high. It could actually result to loss of jobs and closure of businesses, especially the SMEs who cannot afford the new price of fuel.
  • Cost of transportation would sour since government plays little or no role in the transportation industry.This would affect the cost of goods which need transportation from one region to the other, especially food stuff.
  • The savings accrued from the removal of fuel subsidy would disappear, as usual, into some sort of abyss where government officials and their cronies greedily feast on the resources of an entire nation. Nigerians are used to hearing of huge amount of monies realized by government and/or recovered from looters; but where these monies end up, no one knows. It would be the same case if fuel subsidy is removed and the government gets to ‘save’ N1.2 trillion.
 The Oracle's verdict

  • The President, Goodluck Ebele Jonathan, would, by removing the fuel subsidy, show that his government is not for the common man, but for the elite. How else can one explain his decision to remove subsidy for a commodity which the common man needs for everyday living while nothing is done about the National Assembly members who, though constituting less than 1 percent of Nigeria’s population (about 0.0003% considering there are 469 members of the National Assembly and about 155 million Nigerians), consume more than 25% of the government's revenue spending per year? Totally insane! TransparencyNG suggests that over a given tenure; Lawmakers collectively rake a whooping sum of N385.80 billion in salaries and benefits; an amount that can comfortably add 2,572 megawatts to the current national capacity or construct up to 4 new refineries and still be enough to rehabilitate the existing ones. Amidst all these glaring facts; there are no proposals to cut down on the obvious wastage of resources in the NASS. They (NASS) even stand to gain more if FG has more money at her disposal should fuel subsidy be removed. 
  •  Recently, the President announced on his Facebook page that Nigeria is now ranked 2nd amongst the OPEC nations yet he has made a proposal which would see Nigerians pay so much to purchase this commodity they have in abundance; possibly more than what citizens from any of the top-ten OPEC member states pay for fuel.
  • Jonathan is toeing the path of former Nigerian Presidents who failed to fix existing refineries and fuel deports not to talk of building new ones. If these were done; it would not only have brought about a significant drop in fuel price, but would also have eased unemployment.
  • While removing the fuel subsidy would definitely bring pains to the common man; it holds a promise which usually the Government never keeps. It therefore seems dubious to the common man, and rightly so as there is widespread opinion that if there is anyone or any group of persons to benefit from removing the fuel subsidy; it should be government officials and their cronies.
  • Another interesting thing to note is that though a lot of well meaning Nigerians both in the private and public sectors have kicked against the removal of fuel subsidy; the 36 State Governors are clamoring for it. It is this same group of Governors that kicked against the Sovereign Wealth Fund (SWF) which was proposed to ensure that part of the national oil revenue is saved for future use. All they (Governors) want are policies that would make billions of Naira available to them.
  •  It is not the amount of money spent on fuel subsidy that is holding the country down; it is the greed of government officials who have over the years failed to utilize the nation’s wealth for the good of the people.That same greed would make them squander whatever monies saved up if fuel subsidy is removed.
  •  Presently, the average Nigerian generates his own electricity for personal and commercial uses; pays 120% for healthcare delivery and education; fixes his own access roads; provides his own water resources; provides security for himself, etc...removing this subsidy would ultimately mean that a government which was previously doing little to directly better the lots of the common man; has blatantly made it worse.

The Advice
  • A good leader is one who is exemplary. Savings can be made by cutting down on the cost of governance which is presently over the roof instead of targeting the poor masses. If the FG starts from reducing the cost of governance, the citizenry would not find it all too daunting to make certain sacrifices if need be.
  • There must be some sort of subsidy for fuel… therefore, FG should not be talking about entirely removing the subsidy but there could be some reduction. Even a reduction SHOULD BE REJECTED by the citizenry unless there is equally a reduction in the cost of governance.
  •  If the subsidy must be totally removed...FG should fix our refineries and build more; construct more fuel deports across the country; make power accessible all through Nigeria; fix the dilapidated transportation industry and provide jobs...anything short from this, amounts to putting the cart before the horse and is either sheer WICKEDNESS or FOLLY.

The Oracle Has Spoken!!


  1. Thanks Stealth...The Oracle is grateful

  2. This piece is actually intriguing, My distinguished Chief Priest. The removal of petroleum products subsidy would definitely cause untold hardship to the average Nigerian working family given the essence of these products. Inasmuch as I believe that Government should remove the subsidy in the long run, I do concur with divination of the oracle that the refineries should be resuscitated and every oil and other ancillary mineral prospecting entity domiciled in Nigeria be compelled by attendant legislation to engage in the refining/harnessing of 50% of the minerals obtained, locally for indigenous consumption. After all, if 50% of the crude oil drilled in Nigeria is refined locally for local consumption, which the oracle has stated amounts to about 32 million litres daily, Nigerians could still continue buying gasoline at 65 bucks and government could still make their supposed savings without having to subsidize that is! The said legislation would also put a stop to the incessant cases of capital flight within our economy under the auspice of GLOBALIZATION! The sooner we do away with western idiosyncrasies and concentrate on looking inwards for solutions to our problems, the better for the Nigerian economy..Meanwhile..kudos to the Oracle and his chief diviner for this wonderful piece..keep up the good work and may u never stumble in the face of an invitation to come and chop from the rescue mission miscreants!

  3. Am covering my face in shame that i actually worked for this man to be voted into power as the President of this dare nation. We were all rejoicing and thanking God for sending us a messiah in the person of GEJ, but right now we know its not by tell us 'i had no shoes'. Am still trying to imagine what this nation would look like if this fuel subsidy is eventually removed. Armed Robbery, kidnapping, prostitution, rape, think of any crime will be the order of the day because people will be frustrated and more hungry. GEJ is a disgrace to the all those who stood under that scorching sun to ensure he is voted in as the president of this nation.
    I commend you Ichie(sorry oracle), for this blog and the kind of issue you chose to tackle in it. It shows you truely have the interest of the country @heart. Good job.

  4. @ Banks...Thanks bro! As is usual, we are of the same opinion with regards the removal of fuel subsidy. Thanks for the encouragement...please keep checking this space. The Oracle is quite grateful.

    @ Bina... Thanks so much bro. Don't get so disheartened; things might still look up. We just have to do our bit...the Oracle inclusive.