Fuel Subsidy or Corruption subsidy?

Let me start this article by saying happy new year to all my readers because your president was not able to say the same to you, he was so much in a hurry to effect his subsidy agenda and that was exactly what he use as both seasons greeting and new year gift eh! Yah! Sorry about about that.

However, I have watched for sometimes now, the ongoing debate on fuel subsidy, to be or not to be and sincerely, the first thing we must know is that there is no subsidy removal in the first place, it is corruption subsidy that Jonathan is trying to remove, this is what I mean, a marketer brings in 40 million litres of fuel into the country, but he declares 5million litres and sells 35 million at what is called the Platt price elsewhere, whereas Nigeria has paid him the subsidy worth 40 million litres. He will pocket the value of 35 million litres times N65. Then the question is why do 150 million Nigerian have to suffer the sin of some few people.

Again, nobody is disputing the fact that deregulation is good, but this matter is not only about deregulation it is also about trust, all we hear is that the subsidy has to go because we need the money to rebuild the economy. Subsidy has not helped us as a country in the past decades. The beneficiaries have leeched the system to the tune of N1.3 trillion, noted Alison-Madueke. Okonjo-Iweala says the economy will benefit from the infusion of new capital but my question is how will the money be allocated? Through the state governors and local chairmen, the same set of people who accepted corruption as part of the official code of governance, if this is the subsidy, then my definition of subsidy is simple, it is the  removal of our funds from thieves and the handing over of the funds to robbers.

To now add insult to the injury, a non-governmental organisation, the Save Nigeria Group said an independent research it conducted showed that the four refineries in the country had a total installed capacity of 445,000 barrels per day and that the current capacity of the refineries was 133,500 barrels per day (or 21.2m litres, 30 per cent of installed capacity) due to ageing equipment.

The required domestic consumption for petrol was 12m litres This means that even our moribund refineries can actually meet our local consumption need for petroleum, So let’s do a simple mathematics, The cost structure of crude oil production includes:

 findings/development, $3.5;

production cost, $1.5;

refining cost, $12.6;

pipeline/transport, $1.5;

and distribution/bridging fund margin, $15.69.

With this, the total sum cost per one barrel of petroleum anywhere in Nigeria will be   $34.8; then one litre will cost $34.8/159 litres, which will be $0.219; 9). To get the naira equivalent, multiply $0.219 by N160 (i.e. the current exchange rate of the naira to the dollar): 0.219xN160 is N35.02k. When we add tax – N5 to N35.02, the total cost is N40.02; 10).  Thus, the actual cost of petrol per litre in Nigeria is N40.02. Haba! Oga Jonathan, remember that when you had no shoes we voted for you o, but if after acquiring many shoes you have decided to trampled us to death with this unfriendly and insensitive policy. God will be the judge, but before then Nigerians will not sleep and you too will not even dare to do the same.

From the look of things- a couple of African countries have deregulated, who does not know that this subsidy removal is not without a coalition with the IMF- the manufacturers of Okonjo Iweala and  PPPRA was only motivated by a desire to make more money for the federal and state governments by embarking on a crushing increase in the prices of petroleum products in the country. Those who pushed for the pump price to be increased from N65 to N141 per litre were only motivated by the need to recoup the huge amount of money they expended on funding their April 2011 elections. The current price that was fixed by the PPPRA had nothing whatsoever to do with the figures that were being reeled out by government officials. If Jonathan cannot tackle the real culprits, he should let us know. Visiting the sins of a larcenous few on the pauperised mass is totally unjust.