Fellow Citizens:
I have read the various observations about the fuel pricing regime and the attendant issues generated. All certainly have strong points.
The most important issue of course is how to shield the poor from the worst effects of the policy. I will hopefully address that in another note.
Permit me an explanation of the policy. First, the real issue is not a removal of subsidy. At $40 a barrel there isn't much of a subsidy to remove.
In any event, the President is probably one of the most convinced pro-subsidy advocates.
What happened is as follows: our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50% of local fuel consumption. The remaining 50% is imported by major and independent marketers.
These marketers up until three months ago sourced their foreign exchange from the Central Bank of Nigeria at the official rate. However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN. The CBN simply did not have enough. (In April, oil earnings dipped to $550 million. The amount required for fuel importation alone is about $225million!) .
Meanwhile, NNPC tried to cover the 50% shortfall by dedicating more export crude for domestic consumption. Besides the short term depletion of the Federation Account, which is where the FG and States are paid from, and further cash-call debts pilling up, NNPC also lacked the capacity to distribute 100% of local consumption around the country. Previously, they were responsible for only about 50%. (Partly the reason for the lingering scarcity).
We realised that we were left with only one option. This was to allow independent marketers and any Nigerian entity to source their own foreign exchange and import fuel. We expect that foreign exchange will be sourced at an average of about N285 to the dollar, (current interbank rate). They would then be restricted to selling at a price between N135 and N145 per litre.
We expect that with competition, more private refineries, and NNPC refineries working at full capacity, prices will drop considerably. Our target is that by Q4 2018 we should be producing 70% of our fuel needs locally. At the moment even if all the refineries are working optimally they will produce just about 40% of our domestic fuel needs.
You will notice that I have not mentioned other details of the PPRA cost template. I wanted to focus on the cost component largely responsible for the substantial rise, namely foreign exchange. This is therefore not a subsidy removal issue but a foreign exchange problem, in the face of dwindling earnings.
Thank you all.
VICE PRESIDENT YEMI OSINBAJO, SAN
May 13, 2016
Baba....keep talking. Just know that Strike is imminent as a ball of tomato is now #100
ReplyDeleteCBN did not have enough fx cos the reserve was depleted by the last set of crooks who occupied the seat. All those people who received thousands of USD in white envelopes from Jonathan have either checked out, or have been using it to do businesses that still rob the masses. Una well done o. This mess is really deep and PMB is frigging SLOW!!!!
DeleteWhat's the side eye for Stella? This is a very credible explanation dear.
DeleteStop confusing average Nigerians with jargons! A failed administration that says something and does another! I regret ever voting APC
ReplyDeleteOur local refineries produce fuel. NNPC doesn't source for FX to import fuel. Why the fuck is NNPC also selling fuel at N145?
DeleteBuahahahahahahahaha
DeleteAyo,you never see something.
And buhari is about to devalue naira.
End time shut ur stinking mouth. Simple explanation you don't understand. Ode!
DeleteBlah blah blah blah blah blah blah
ReplyDeleteWhat is there to explain re we fools? Wicked government and you call your self a pastor
DeleteInstead of you to resign honourable you allowed greed to feed you.
God forbid bad thing that I should read this piece of shit!
DeleteI'm a fellow citizen like yourselves and I'm first a Nigerian before anything else. I have not benefited from the politician or anyone around them. But for those of us that have a brain that functions, lets put aside distrust, tribe, gender, religion and party affiliations and THINK!!!!
ReplyDeleteThis is the only way out for now. It will be a painful journey but the blisters will heal and our lives will be better for it.
We ate with all ten fingers, now its time to fast but after the storm comes a really beautiful scenery. GOD bless NIGERIA.
👍
DeleteChop knuckle!
DeleteTrue talk
Delete@ adanma, this the best comment so far, your head dey there.
DeleteYou're a Darling Adanma.. 😘😘😘😘
Delete.
.
.
.
.
Common Sense is like deodorant. The ppl who need it the most never use it….
Adanma,you are on point....the suffering shall be for a while.
Delete'We ate with all 10 fingers' thank u. This reminds me of dis tommatoes issue we are all complaining abt. I Thut abt it today. Just early dis year,we had a tommatoe glut,I mean we bought basket of tommatoes 3k,chai we were all happy,now dere is no tommatoes in d market. Why do things always happen like this in dis country? We always only think o now,never tomorrow. I wish I has a freezer now and I was able to hv bought like 2 baskets of tommatoes and stocked my freezer I won't hv bin bothered by all this scarcity. We hv a very poor saving and forward thinking culture in Nigeria. We also hv a wicked mind syndrome,I mean ppl dt in deir hearts knw dt dey bought petrol @87 naira wld automatically increase deir prices,isnt dt devlish. Ppl dt deir business may hv no need for petrol wld automatically increase deir prices and say subsidy removal. Chai!!!!!!!! We sef we no good to ourselves( the average Nigerian). Look back @ some of our bv's d hate dey spew from deir mouth,d girl dt told d free make up artist to jump inside lagoon. We aren't good to ourselves. Kpere!!!!!
DeleteGod bless Nigeria. This is just going to be for a moment, things are hard but it will end in praise. This is a government we can trust, that was what was lacking in the last administration that made people to say no to their plan, lack of sincerity.
DeleteThe business has nothing to do with duke you say?? Really..??
DeleteDon't this traders spend money on transportation?? Isn't full required for transportation?? Hasn't the price of transportation hiked??
Is there light any where?? Hasn't price light tarrif been increased?? Whether you like it or not, whether you have a business or not, fuel increment affects you..
Because fuel controls transports and generators. When others who use light and fuel are hiking their prices wouldn't you?? When standard of living is now high..
You expect someone who buys something at 50o naira to keep selling at that price?? How then will the person transport herself to the market the next time?? How will she be able to feed her family from the hike of other things that aren't available..
When she needs to buy fuel for her household how does she do and still have money for business if she doesn't hike price..
Alot of people on this blog are so dumb. Like really dumb. But you come here to act all intelligent.. There was a tomato whatever in the market like you said.. Where is the light to store it?? After buying 3 basket an keeping in the freezer, Nepa doesn't give you like for 2 week what happens next?? Or you think people didn't buy to store??
Who ate with 10 fingers??
Stop with the it will get worse to get better comment..
Unless crude oil miraculous goes up, all this policies the government is taken will just make things worse..
Now marketers are to source for dollars on their own. Have you thought about how dollars will go up?? Dollars will go so high now and scarce and you think this wouldn't still make things harder??
They are telling you until 2018 before we can get 70% fuel from our refineries for the country.. So we should be suffering till 2018?? That's 2yrs..
People should keep lying to themselves that seeing this government knows nothing
Revive Buhari as president and in 6 months things will be fine.. It happened before in the 80s.he was removed and everything became alright. He stepped in then and everything went back. Immediately he was removed things became alright.. All he knows is sniffling policies and causing hunger in the land and people are still dumb
God bless you! Nigeria ll rise again!
DeleteConfirmento Adanma.
DeleteNot end time comment.
Nothing gets better in this hell hole of a country... We have a recurring problem.
DeleteMy question is why would the regulate the fuel price? Why must NNPC also sell @the same price with independent marketers?
ReplyDelete*Larry was here*
anonymous, God bless u.
ReplyDeleteim a nigerian, living in Nigeria. just this evening, i was in the market and if u see the tomatoes i bought for N400 ehn, u go weep.
but truth is: this is the only way out. this administration has only shown us the true state of our economy.
the economy was battered under Jonathan, just covered up with/ by stolen funds.
this is the point at which we will be forced to look inward and then build ourselves up from here.
God bless Nigeria!
Ayo? Do you even have a voter's card? Pls.shut the F up!
ReplyDeleteEnd time commissioner Osunbade
ReplyDeleteLolz. stella this your side eyes ehn? But tbe man is telling us as it.Why are Nigerians so frigging distrustful? Who'll come on to stick out his neck this far.I trust them to take us out of this storm joor.
ReplyDeleteNwa nnem, you get brain abeg!
ReplyDeleteDon't care, won't read....removing subsidy at this tough times is pure wickedness. No light, no money, no health care, no good roads, NO BOO, no salary increment.... Nothing! There is nothing to cushion this policy abeg. I refuse it.
ReplyDeleteI didnt bother to read. Got no time for epistle. This exercise physiology exam wey i go write i never read am finish na to come and read epistle that wont add kobo into my bank acct or show me where i go buy fresh tomatoes. Mtchewww.
ReplyDeleteCan they plssss summarise into just one sentence
ReplyDeleteCan someone summarize abeg, all this grammar na story for the Gods, when they were running deir mouths during campaign they didn't think abt those factors abiiii??? Bunch of hypocrites and a failed government .
ReplyDeleteToo much grammar!
ReplyDeleteOh pls shut up!Buhari's daughter is in one of the best schools in the world in Britain and u ppl are treating Nigerians as if they are fools.i am disappointed u are even from redeem.u are a disgrace to christians
ReplyDeleteHmmmmmmmmmm
DeleteBe dissapointed that you can't understand simple economics or english....what has buhari's daughter got to do with dwindling foreign reserve or foreign exchange? you sir/ma are a disgrace to humanity!
DeleteAnon 00:48 u are the biggest fool alive.u must be one of these religious bigot who cover wickedness with religion.oh and u want to know who is a shame to humanity?check the hole u came out from.if u want eat my comment.
DeleteMehnnn aswear I got no idea what he's talking about
ReplyDeleteMe too
DeleteWhat about the free meal promised to pupils? It is well
ReplyDeleteSo will the price of things ever come down again? The answer is No. The poor is suffering. Bring down the price of fuel now
ReplyDeleteOwuya
ReplyDeleteNonsense talk, what is this so called man is saying, every day with different lies of how to better Nigerians, only for them to loot the money to foreign countries to buy properties, their children schooling in abroad, using private jet,I believe this is the best time for Nigerians to woke up from all this unless and criminals we call leaders, how long will they learn from those ones that stolen our money to acquire properties, they dieof different diseases which those money can't save them.
ReplyDeleteNonsense talk, what is this so called man is saying, every day with different lies of how to better Nigerians, only for them to loot the money to foreign countries to buy properties, their children schooling in abroad, using private jet,I believe this is the best time for Nigerians to woke up from all this unless and criminals we call leaders, how long will they learn from those ones that stolen our money to acquire properties, they dieof different diseases which those money can't save them.
ReplyDeleteShameless man
ReplyDeleteI WONDER WHY THE BUHARI LED GOVT. DEDUCTED 50 KOBO (#87-#86.50)FROM THE PREVAILING PRICE OF PMS
ReplyDeleteWHEN THEY NEWLY ASSUMED POWER, TRYING TO PRETEND THAT THEIR WAS A FALL IN PRICE OF
OF CRUDE OIL WHEN IN DID THEY KNEW THEY WERE GOING TO DOUBLE THE PRICE OF THE SAME
PMS AND DPK EVEN WITH THE PRICE OF CRUDE STILL ALMOST AT SAME RATE.IN MY OWN OPINION THIS AN
"OBT GOVT"
"FANTASTICALLY CORRUPT"
Failed administration.i knew that it will happen that was y i was campaigning serious against an old illiterate buhari. That does not think b 4 acting. He feel that he can deceive the mass by making us to experience scarcity of pms,b 4 increasing the price, so that we will not react rather we will wish for the availability of fuel at any cost.
ReplyDeleteN to think that NLC were striking during Gej's regime when he removed fuel subsidy n d same NLC are not doing anything now is a clear show of shame n hypocrisy.
ReplyDeleteGod bless you @ Adanma, I never knew we still have good thinkers in this country. I concur with your comment 100%. God Bless Naija
ReplyDeleteMumu, which time, day and year Nigerians done eat with 10fingers or are you talking of government ?
ReplyDeleteRead between the lines. This is the same tactics! They make as much money as they can from now till the 4th quarter in 2018. Then they will reduce the fuel price, do one or two other things to sweeten Nigerians ahead of 2019 re-election.
ReplyDeleteAnd just like that, we will forget the sufferings and start singing their praise and stupidly re-elect them thinking their policies has started working and what is needed is CONTINUITY!!! Looool.
Once re-elected, the cycle we experienced in the first tenure starts all over again.
Classic Machiavellian strategy.
Read between the lines. This is the same tactics! They make as much money as they can from now till the 4th quarter in 2018. Then they will reduce the fuel price, do one or two other things to sweeten Nigerians ahead of 2019 re-election.
ReplyDeleteAnd just like that, we will forget the sufferings and start singing their praise and stupidly re-elect them thinking their policies has started working and what is needed is CONTINUITY!!! Looool.
Once re-elected, the cycle we experienced in the first tenure starts all over again.
Classic Machiavellian strategy.
All na wash
ReplyDeleteChange turned upside down
ReplyDelete