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10 Benefits of Petroleum Subsidy Removal You Must Know

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  1. Infrastructural Development: Frees up public funds for more meaningful infrastructure and developmental program that stimulates industrialization, create jobs, economic growth and social prosperity. For example:

Almost N12 trillion spent on subsidy in the last 4 years is more than sufficient to develop any of the following project:

-2,400, hospitals of 1000 bed capacity across 774 LGA
-or 500,000 new houses to provide shelter to over 3.5 million Nigerians
-or 27GW of electricity generation
-or skill up and provide education up to tertiary levels for over 2 million Nigerians

  1. Grow Domestic Refining: Subsidy removal creates a market reflective downstream which invariably stimulates more downstream investments especially in the domestic refining space, thereby creating more jobs, prosperity and growth.
  2. Reduce Gasoline Smuggling and Diversion: The removal of fuel subsidy eliminates the unhealthy price arbitrage with neighboring countries thereby preventing the diversion and smuggling of gasoline outside the Nations borders which bleeds our economy.
  3. Reduce Corruption: It also reduces corruption surrounding internal product diversion as many marketers procure gasoline at subsidized regulated wholesale prices but still sell at deregulated retail prices.
  4. Resource Rebalancing: The rich benefit more from the subsidy than the poor as they have higher number and capacity of vehicles to buy more gasoline; removal of the subsidy creates an opportunity to redistribute this benefit directly to those who need it more.
  5. Stimulate Responsible Consumption reducing Waste: Waste makes want. Subsidy removal enable responsible gasoline consumption which reduces waste as the prices is more market reflective and the demand for the product will rebalance itself with the new price realities
  6. Grow upstream Production: Subsidy removal allows the full recovery of upstream revenues which enables reinvestment required to grow our national petroleum production and reserves and overall forex earnings.
  7. Strengthen the Naira: Growth of our forex earnings combined with reduction in product consumption reduces pressure on forex thereby strengthening the Naira.
  8. Reduce Product Scarcity: Open market reflective prices, brings in more players, creates a more efficient market thereby reducing fuel scarcity and its adverse effects on the economy.
  9. Reduce Growing Deficit and Public Debt: Subsidy removal reduces the growing and unsustainable Budget deficit and consequently the debt burden creating a more robust economic and sustainable future.

In conclusion, removal of subsidy allows for better use of public funds to achieve more meaningful infrastructural development programmes which will be more beneficial to Nigerians and grow the economy.

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Energy

Dangote promises to raise power generation at the National Grid to boost economy

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By Ahmed Rufa’i, Dutse

The Dangote Group of Companies has promised to boost the power generation at the national grid through increased energy production in the country.

This was contained in a press statement issued by the communication officer in charge of north, Dangote Group of Companies, Malam Jibril Abubakar, said the group general manager of Dangote Sugar Refinery (DSR) Numan in Adamawa state, Mr Bello Abdullahi Dan-Musa.

According to the statement, “The company operates an independent power system, and that excess energy will be redirected to the national grid.”

The statement stated further that “the power, from the Dangote Sugar Refinery, Numan, when redirected to the National Grid has the potential to contribute immensely to the rapid development of the economy of the entire Northeast”.
He added that the energy will bring about accelerated development and industrialization in the region.

“President of the Dangote Group, Aliko Dangote, had said that upon completion of the BIP projects, his sugar company will be able to create about three hundred thousand direct and indirect jobs, with positive multiplier effects on the national economy”.

The Group General manager added that “The Sugar Refinery (DSR) employs no fewer than 7,000 workers yearly in its Backward Integration Project (BIP) in Numan, Adamawa State

“The Dangote Group is Nigeria’s biggest employer of labour after the government.”

Mr. Dan-Musa said most of the employees are often engaged on a temporary basis during the cane production season.

Recently, he said the company paid over N500 million to the out-growers for the sugarcane they produced under the DSR Numan out-growers scheme.

The current capacity of the DSR Numan refinery of 4,800 Tons of Cane Per Day (TCD), he said, is being upgraded to 6,000 TCD by end of 2023, 9,800TCD by 2024 and subsequently to 15,000TCD.

According to Mr. Dan-Musa, Dangote Sugar Refinery Numan has contributed immensely in the realization of the Backward Integration program of the Federal Government.

He added that the company has acquired state of the art machines to support its production process, adding that its facilities are environmentally friendly.

The Group General Manager stated further that “its Backward Integration goal is to become a global force in sugar production, by producing 1.5M MT/PA of refined sugar from locally grown sugar cane for the domestic and export markets”.

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Energy

NNPC lays-off top Management Staff

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The Nigerian National Petroleum Company Limited (NNPC) has layed-off some top management staff who have less than 15 months to retire.

This is coming few days after the oil company announced the removal and replacement of three of the its Executive Vice Presidents (EVPs).

Those affected by the previous shakeup included Abdulkabir Ahmed, who was hitherto in charge of gas, power and new energies; Adokiye Tombomieye, who headed the upstream segment as well as Adeyemi Adetunji, who was in charge of the downstream.

They were replaced by Olalekan Ogunleye as EVP gas, power and new energies; Oritsemeyiwa Eyesan for the company’s upstream operations, while Adedapo Segun took charge of the downstream.

The NNPC, in a terse statement, indicated that the new change in the line up was in line with its aspiration to rejuvenate its workforce.

“In our bid to pursue effective organisational renewal to support the delivery of our strategic business objectives, it has become imperative to rejuvenate our workforce.

“Consequently, in addition to the recent exit of three executive vice presidents, other members of management staff with less than 15 months to statutory retirement will be exiting the company effective 19th September 2023,” the statement said.

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Energy

Subsidy: LP asks APC to apologise to Jonathan for thwarting his patriotic zeal

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***Says 66 days of APC further plunged Nigeria into a more dreadful darkness

The Labour Party (LP) on Sunday asked the ruling All Progressive Congress (APC) to be carageaus enough to apologize to Nigerians particularly President Jonathan and members of his 2012 economic team for disrupting the patriotic zeal to remove Subsidy 11 years ago.
It would be recalled that in 2012 when the former President Jonathan attempted to deal with the subsidy monster, the incumbent Nigerian President, Bola Tinubu and his predecessor were at the forefront of protests that stalled the plan.

This was contained in a statement by the Director General of the Obi-Datti Campaign Organization Balogun Akin Osuntokun issued in Abuja on Sunday on the appraisal of the 66days of the Bola Tinubu’ administration.
Osuntokun said with the continued failures of the APC to provide the required leadership, the appropriate thing to do is the appology

“After apologizing, they should (in their temporary stay in power), at least seek to provide good leadership and governance by engaging the people, especially the workers, and fashioning out a clear strategy to manage their inconsistent, confusing, and annihilating policies.

“In addition, they should launch an investigation into NNPC management of the subsidy regime, the huge oil theft, and corruption that have caused Nigeria a serious financial crisis with a determination to effectively prosecute all those involved in the subsidy perfidy and fraud.

He alerted Nigerians over the consequences of the experimental leadership approach and governance by stealth without imagination, deep thinking or concrete ameliorative policies which the All Progressives Congress (APC) has foisted on them.

According to him, the first blunders that have visited collateral damage on Nigerians were the unplanned and ill-thought removal of fuel subsidy and unification of exchange rates; uncoordinated and confusing policy announcements which has led to exponential increase in the prices of all goods and services especially food and other basic consumables.

To further make the situation worse he said is the decline in National Savings Rate and erosion of disposable incomes of Nigerians, increasing poverty and insecurity.

Of recent, he observed is the unimaginable extravagance and exponential increase in the cost and waste of governance exemplified with interminable appointments of litany of ministers and aides, and then a most unexamined desire to go to a clearly avoidable war with our very close neighbor and brother, Republic of Niger.

“The list is unending, confusing, most unfortunate, and lamentable! There is a clear lack of grasp of the undergirding ethos of good governance predicated on short, medium, and long-term stimulus strategies and policies.
“In their own words, the APC-led government admitted their error of declaring subsidy removal and currency unification without adequate plans to mitigate the potentially huge consequences, as Nigerians are now witnessing in anguish.  
“For APC and their leaders, who claim to have long been prepared for the job of presiding over Nigeria’s administrative affairs, to commit such a blunder, at this critical troubling period of our nation’s history, is inexcusable.
“The magnitude of such mistake which has debased and threatens to wipe out businesses with unprecedented worsening of the living conditions of Nigerians cannot be wished away with mere promises without adequate plans.
“Given their unrelenting lies and blame games, some clarifications are imperative. Do Nigerians deserve to have subsidies? Yes, they do as governments all over the world including in advanced countries offer subsidies to their citizens in various ways.
“Should the subsidy be removed in Nigeria? Yes, it should because it has been grossly mismanaged in an organized crime cartel manner with unparalleled corruption, official malfeasance, and embezzlement of taxpayers’ money.
“In line with our belief and promise to create and lead a New Nigeria, That is Possible, the Labour Party campaigned for the removal of petrol subsidies principally to end the criminal appropriation of our national resources by a privileged few and their connected cronies.
“This was to be achieved through a gradual process including the effective repairs and functioning of our refineries and activation of compressed natural gas (CNG) opportunities to avoid dramatic increases in fuel prices, inflation, and pains for Nigerians.”
He reminded Nigerians of the genuine efforts to remove the subsidy and end the associated embezzlement of their common resources in 2012 by the then government of President Goodluck Jonathan which were strategically thwarted and stopped by the current APC Chieftains in their characteristic deceit to endear themselves to Nigerians and attain power. “Lamentably even after deceptively and most unfortunately taking power from PDP in 2015, the then APC government refused to remove the subsidy and even used it to sabotage the 2023 elections thus affirming their unwillingness to stop the looting of Nigeria as they are part of the looting cartel themselves.
“Not only did they fail to stop the looting through the removal of the subsidy, but they also expanded it through all kinds of expenditures leading to our current debt crisis of over N77 trillion naira up from about N15 trillion when Buhari took over.
“As they were looting Nigeria dry in the guise of subsidy and other frauds, our dear Nation, Nigeria, acquired the dubious distinction of becoming the poverty capital of the world with over 135 million Nigerians now classified as multidimensionally poor.
He said unemployment skyrocketed to over 35%, insecurity escalated to a frightening level never seen before in Nigeria and all other socio-economic development variables all negative and heading south!
“Most unfortunately again, even after being rejected by the majority of Nigerians in the 2023 elections, they egregiously colluded with INEC and rigged themselves back to power being naturally unfit and unprepared for effective and good governance.”

According to him, the worse happened when they most recklessly and suddenly announced the removal of subsidy and unified the exchange rates, consequently causing Nigerians a most avoidable traumatic pain and misery with unprecedented resultant fuel price hike of over 300%, a dollar exchanging for almost a N1000 and exponential increase in the price all goods and services especially food.
“If the APC gang had not been inordinate for power and had allowed the petrol subsidy to be removed in 2012, Nigeria would have saved over N50 trillion that would have been used as a safety net.

He said it would have been used to cushion the effect and also used to eradicate poverty, improve education, health and security, create jobs, build an efficient transport system and make Nigeria truly the giant of Africa through a shift from consumption to production.

“These are the real subsidies Nigerians truly and urgently need.”

“While we agree that ‘After Darkness Comes the Glorious Dawn’, what the APC government clearly reminded Nigerians is that the darkness was caused by the same APC in the last 8 years with the gang still the same and bigger now.
“Unfortunately, as APC cannot give what it does not have, the darkness is clearly getting darker and expanding with the largely cosmetic, uncoordinated, and confusing announcement of policies without proper thinking, planning, and execution strategies.
“The shallow announcements hardly address the shock and excruciating trauma and pains Nigerians are presently experiencing.

“No nation allows its currency to float freely without solid backing; nor set a floating forex regime determined solely by market forces and not backed by ample reserve.
“Moreover, the policies of this regime are collectively ad-hoc measures not directly linked to the government’s much-touted campaign manifesto, but in the main, various policy options plagiarised from the political opposition’s governance and economic planks, without the benefit of the underpinning implementation modalities.
“This approach is fraught with gross missteps and expected failures which Nigerians are sadly, currently experiencing.

“Is it not insensitive to the highest level, that when Nigerians are passing through excruciating hardships, those who claim that they are leading us are living in uncontrollable opulence and extravagance with no interest to cut the waste and cost of governance?
“How do you explain the litany of aides currently being announced by the Speaker, Senate President, and the Presidency?
“While Nigerians are demanding a drastic reduction in the size and cost of governance, what will APC be doing with 48 ministers and other numerous aides?
“With some of them under criminal investigations and indictments, others with proven cases of forgery, and no adequate qualifications or experience, all clearly affirm the unpreparedness and unseriousness of the current APC gang.
“The only justifiable reason for the unending list of ministers and other senior aides is the expansion and continued looting of the resources of our dear country, Nigeria.
“With three tiers of government (federal, state, and local government), any committed and patriotic leader can effectively govern and lead Nigeria with 36 ministers as stated in the constitution. If possible, it should be reduced further.

“As if our internal problems are not enough, they (the APC government) are eager to take Nigeria to an unnecessary war with our neighbor and brother, the Republic of Niger.
“While we condemn the overthrow of democracy by the military in Niger, we urge and implore all parties to explore dialogue to resolve the governance crisis in Niger. “Nigeria is too interconnected socially, culturally, and religiously with Niger to contemplate a military attack or war irrespective of the current situation.
“While democracy remains a better governance system, it is also important that governance and leadership are based on the rule of law and other conditions of good and accountable governance.
“With many more flaws in the policy announcements that are not by any means germane to true development, economic growth, and the revamping of our badly ailing economy, the speech and policy announcements can be aptly described as a gallivant into the dark deeper recesses of economic quagmire, debt peonage, and intractable multidimensional poverty.

“While the continuing inability of APC-led governments to think patriotically and strategically to offer transformative leadership is deeply troubling and affirms their unpreparedness to lead robustly and with entrenched vision, we implore Nigerians and the international community to keep faith in Nigeria as we remain focused on our belief that a New Nigeria is Possible.
“We will transform Nigeria from consumption to production, and entrench inclusive, sustainable, and beneficial growth to all Nigerians irrespective of tribe, religion, location, status, or gender. A New Nigeria is Indeed Possible and Forthcoming!
Long live the Federal Republic of Nigeria!

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