CONSCIENCE, NURTURED BY TRUTH: SHALL WE PRAY PLEASE?

CONSCIENCE, NURTURED BY TRUTH: SHALL WE PRAY PLEASE?: SHALL WE PRAY PLEASE Anthony Kola-Olusanya O God of creation Direct our noble cause Guide thou our leaders right Help our y...

SHALL WE PRAY PLEASE?

SHALL WE PRAY PLEASE

Anthony Kola-Olusanya

O God of creation

Direct our noble cause

Guide thou our leaders right

Help our youth the truth to know

In love and honesty to grow

And living just and true

Great lofty heights attain

To build a nation where peace

                                            

And justice shall reign.The above second stanza of Nigeria’s national anthem was recently adopted as the official national prayer by the President Goodluck Ebele Jonathan, at a recent executive meeting. Without doubt, every line of the second stanza of the anthem is very motivating and inspiring. Looking away from motivation and inspiration, it also speaks to the direction and future the country should follow. A direction anchored on freedom, justice, equity and nationalistic goals - expectedly, a direction also embedded in the constitutional democracy the country is presently practicing. Of most significance here is a nation’s future, goals, aspiration and interest anchored on the youth population of the country and their ability to rise up to the challenges of nation building.

Before going further, I would like to dwell a bit on some lines from the second stanza which are “O God of creation, Direct our noble cause, Guide thou our leaders right”. No doubt for a country in search for visionary leadership to propel her to greatness, to spur development, the second stanza is evidently an appropriate prayer. Instructive though is the message of the first three lines of the second stanza, which a prayer to God of creation to take charge of efforts at the building of the nation, as well as providing guidance to the leaders as they deliver on the good promises of nation building. However, today, Nigeria is lacking in visionary leaders that could dream for the country. The country lacks a leadership that has neither a clear understanding nor the importance of these three opening lines of the second stanza. To them, truth, love, honestly, just living, peace and justice are relative terms best translated from their dictionary filled with physical and intellectual debaucheries. The unfortunate is that those who rule today lacked greatly in conscience and morals, as they now assume that barefaced looting and stripping the people and country of its resources is a noble course.

The next few lines which were directed at the youth – the hope and future of the country “Help our youth the truth to know, in love and honesty to grow, and living just and true, great lofty heights attain”, appears more like an appeasement such that the youths will understand the necessity of the a strong nation built upon strong moral and nationalistic values.  Ironically, many of the youths of today, especially those born in 1976 are presently 36 years old. For this generation of youths, it’s been a mix bag of experiences growing up and living in Nigeria. This generations of Nigerians, constitute the large army of unemployed youths. They are not known to have witnessed 24-hour uninterrupted power supply, standard of living and education are nothing to write home about for these generation. As children of subsidies removal, they also have the misfortune of experiencing debilitating poverty, grand-scale corruption under both military and present day politicians, in addition to the destruction of everything that are beautiful about Nigeria.  Despite their experiences, the generation and the ones earlier have continued to fight vigorously to reclaim Nigeria. Yet, the political leaders of today still view them in the future as leaders in our gerontocratic system of government. At this juncture, it is apt  to ask President Jonathan and his praying cabinet, when will be the turn of the youths for whom these lines were “Help our youth the truth to know, in love and honesty to grow, and living just and true, great lofty heights attain”

It is noteworthy that when this anthem was put together in 1976, as a sequel to the assassination of General Murtala Mohammed at age 36, by the successor regime of General Olusegun Obasanjo (who at the time was in his mid 30s), it was in reaction to the anti-British sentiments in Nigeria then, as a fall out of the killing of General Mohammed. At that time Gen Obasanjo and his colleagues in the supreme military council (SMC) nationalized all British interests in Nigeria, including the British Petroleum as well as discarded the old national anthem. The new national anthem, whose first stanza started with a clarion call to Nigerians, “arise O compatriots, Nigeria calls obey”, was deemed appropriate at that time. Of course, it was a period of deep national fervour and patriotism. It was a period that many independence children (that is, children born when Nigeria attained flag independence) were in their teens and it was an age of defiance. Alongside those pre-independence compatriots, a new nation was about to be born. From 1976 to 1993, was an age of ideas, dreams, visions and revolutionary direction. It was a period when Nigeria was the jewel of the world and a true big brother in the pan African movement black world, south-south politics, and global south. It was the age of actuality, Nigeria called on the world and most of the world boycotted the 1976 Olympics in Montréal, Canada.  It was a period when our voice was heard and heeded. Nigeria needn’t have to make cacophonic noise to be heard, there were no pretensions to our national self esteem. Our leaders and administrators were clear and sound (or at least appear so) about where we wanted to be as country and nation of people under the sun.

However, thirty six years after the present national anthem was imposed on the national psyche to replace the old national anthem, we are once again at a period where leaders feel that only a national prayer would be enough to get the country out of its present precarious economic and political doldrums. It is no more a contestable fact that Nigeria is at a crossroads today. Like the Sudoku game, you need a power of understanding of the word to play. Failure, in this sense, could be regarded as a failure for failing to understand the rules of the game.  Similar to a jigsaw puzzle, the Sudoku is an ancient brain teasing game from the Japanese. Solving a Sudoku puzzle can be rather tricky, but the rules of the game are quite simple. Solving a Sudoku puzzle does not require knowledge of mathematics; simple logic suffices. Like the Sudoku game, solving Nigeria’s teething economic and political problems do not require some rhyme called national prayer, simple logic and commitment to the future of the country as well as ability to just do the right suffices.

However, governance in the present day thirteen years of civil rule inherited by President Jonathan has become more than a jigsaw puzzle or Sudoku game. Today, criminality reigns in all spheres of the nation, with the complete and total breakdown of law, corruption reigns supreme and outlaws have become persons of national interest and reliance. The last thirteen years have seen Nigeria selling more crude oil and making more revenue than any other time in history, yet, the national treasury has continue to dwindle. It even got worse that it became a national discourse that Nigeria is financially broke and everyone has been waiting for the doomsday. With insecurity across the country, the menace of Boko Haram, in the Northern parts of the country, kidnapping and armed banditry have continued without abating even in the southern parts of the country, where people are in self denial that their lives are secured than those of other fellow citizens in the Northern Nigeria. For the first time in the history of Nigeria, religious bigotry has assumed a national prominence, many deaths being recorded in attack and reprisal attacks more than any other time in our history.

From our past history anchored on ideas and hardwork, to the present day country anchored on nepotism and corruption, Nigeria has not fared any better in the past thirteen years of self-rule governance at all. A once hopeful country has been led into hopelessness by a gang of hopeless people, who have failed the country and people in all ramifications. In the same light, for the first time in our history, President Jonathan did what other past rulers never did. He absolved himself of the responsibilities and complicities in the crisis currently facing Nigeria. What an heart-wrenching period for Nigeria, with more than 25 million underemployed or unemployed, Nigerian youths in the non existing job market, the government of Jonathan resolved that unemployment is best tackled by organizing lottery raffle called “YouWin” for your youths to instigate their entrepreneurial brain and skills. Evidently, this is not surprising; the YouWin program is reflection of the times, like many other television reality contest shows such as Big brother Africa, Guilder Ultimate Search, Project Fame, Nigerian Idol to name a few among many reality shows currently playing in Nigeria.

A researcher once wrote, children of these days don’t resemble their parents, they resemble their generation. But the case in Nigeria today speak differently maxim, rather than help give direction and chart a path to greatness, we are now a witness to a federal government resembling the times. Not even the much touted credentials and global connections of Dr. Ngozi Okonjo-Iwealla, President Jonathan government’s Coordinating Minister of the Economy and Finance Minister has helped in reining-in corruption, extra-budgetary spending and profligacy in the country. Under the President’s watch, Nigeria and Nigerians has become hostage to self-seeking religious, economic and politically devious minded impostors who unfortunately are the owners of this government considering their closeness to the President Jonathan and his cabinet members.

This writer agrees that the current problems facing Nigeria, is gargantuan and can be frustrating too. But to think that solutions to these problems can happen through prayers, without any recourse to genuine people oriented development plans and policies is to say the least comedic. The recent adoption of the national anthem’s second stanza as a national prayer is another sign of government resembling the times. The adoption further demonstrates the extent to which religion (Christianity and Islam) has been elevated to in our national life. In 2011, President Jonathan was pictured kneeling down and being blessed by Pastor Enoch Adeboye at the Redeemed Christian Church of God (RCCG) Convention. A lot of Nigerians fell for it and believe that when a government functionary goes to the church/or mosque he/she is chosen by God as such he/she deserves to be followed blinded. To the contrary, this writer has continued to hold onto the opinion that it’s all photo-op. Almost a year later, President Jonathan and his executives, perhaps for lack of how to fool the people, directed us to prayer, this time by reciting a portion of the national anthem as prayer. Of course, President Jonathan and his cabinet know too well that once you ask Nigerians to follow them to God, the people, noted for their gullibility which is erroneously  being taken as being very religious will definitely follow them even if blindly. While prayer is good, and of course this writer does not doubt the efficacy of prayers for those who believe in them, even the faithful of the different religions agreed on one point that ‘faith without work is death’.

From nursery, through primary and secondary school, children and pupils are mandated to sing and recite both the national anthem and pledge every morning. One would have thought that like the Nigerian children and school pupils, political office holders would sing and recite the national pledge daily. Perhaps, this would have motivated them to serve the country and do what is right for the people. But what we have are bunch of men and women who neither sing along the national anthem nor recite national pledge. And yet, these same people can sit down and prescribe prayer lines and notes to Nigerians. On many occasions, these men and women have been seen lip-singing the national anthem and deafly mute during the pledge recital at public gatherings.

What amuses me as a person is that the pronouncement will be carried too far to fanaticism. By the way, who told them that we lack commitment towards Nigeria and that our nationalism has waned? The truth there is that too many issues occurring in today's Nigeria that are capable of erupting  peoples anger against the present leaders that Jonathan and his executives knows, and they needed to quickly engage the minds of many poor average Nigerians. This is because average Nigerian like every other Africans across the world is very religious. At the same time, the Jonathan government also understands that there are willing partners in the many religious houses on both divide, who will go with them is this present fakery called national prayer.

Yet, I agree; religion is a big issue in our country, because we have made it so. Religion affords us the opportunity to sidestep our problems and looking towards the sky and pretend that we are looking up towards heaven and God. I hope people know that even the Israelites – the-so-called Biblical children of God needed arms and ammunition to defend and survive in the Middle East. They could have prayed their enemies away. The United States of America (USA) had to go to Iraq, Afghanistan, Yemen supposedly to find and kill terrorists,  President George Bush could have led them in series of prayers, but he chose the war option because an average American knows that problems are never solved when you are on your kneels. It is so sad, that we have been reduced to a praying people, country and government. Prayers are at best wishes of things we require from the all almighty. It is not prayer that move a country, people or nation and government forward... it is hard work at solutions to problems. As it appears, it’s like Nigeria has achieved something from Dr. Yakubu Gowon’s (a retired army General who ruled Nigeria from age 29 to about 39 years old between 1966 and 1976) pet programme, ‘Nigeria Pray’. This writer is not unmindful of certain groups of Nigerians (including those who are daily raping Nigeria) who are quick to remind us all that Nigeria would have perished via disintegration if not for prayers. To these groups, I would like to point to history, the present civil rule in Nigeria was not attained through prayers, it was through blood, sweat and tears of some Nigerians (dead or alive) who gave their all to the military back to their barracks.  

But since religion and miracle-seeking has become a national pastime, shall we all stand, kneel, crouch, crawl and bow and pray that Boko Haram, corruption, poverty, economic stagnation, bad roads, poor educational and health facilities, profligacy, debauchery vanish from our country. One critical point which is very clear to President Jonathan and his pretentious cabinet is that, God is not answering their prayers because of their insincerity. If I have my way, I will banish religion from Nigeria; unfortunately I don't have such powers...so we shall continue to pray....Mr. President Shall pray please?


Anthony Kola-Olusanya is the author of this write up.

IF NIGERIANS MUST PAY HIGHER FOR FUEL, GEJ and GOVERNMENT MUST REFUND NIGERIANS WHAT IT OWES THEM...

by Anthony Kola-Olusanya, PhD.

Never before has a date in history been so significant to so many cultures, so many religions, scientists, and governments. "2012" is an epic adventure about a global cataclysm that brings an end to the world and tells of the heroic struggle of the survivors. 2012 Movie

At the beginning of the year 2011, many Nigerians had greater than life expectations. At the time, many spiritual leaders and prophets including traditionalists, seers, parapsychologists all had the same message for Nigerians, “that Nigeria will be better for it at the April 2011 Elections and that Nigeria will be better for it at the end of the year”. This prophetic revelations and predictions formed the basis of decision on the part of most Nigerians to come out enmasse to participate in the last general elections. It was in the same year that Nigerians saw a presidential candidate trying to connect with the people by speaking of the link he shared with them.

Presidential candidate Goodluck Ebele Jonathan told us all that like most Nigerians alive today that he didn’t go to school wearing shoes, and that if he can do it then every Nigerian child born and unborn can do it. Interestingly too, it was in 2011 that many more Nigerians were lost to civil strives occasioned by the state of insecurity and federal government ineptitude in the country. At the end of the elections, Goodluck Ebele Jonathan emerged ‘victorious’ in an election that was heavily condemned by the opposition as fraught with many examples of election malpractices. 2011 was also a year that saw an executive president begging a candidate for ministerial position to come work for him. The same year, also saw for the first time the emergence and appointment of a supervisory minister in Nigeria. Year 2011, also the advancement of right-wing and anti-people arguments to convince Nigerians on the need for the removal of the ‘subsidy’ on petroleum and attempt by President Jonathan and his cabinet to consult widely employing IBB style (a populist debate to rationalise government action).

But the interesting thing about the so-called state sponsored consultations and debates was that before the consultations and debates had ended, President Jonathan on the January 1, 2012, through Petroleum Products Pricing Regulatory Agency (PPPRA) announced the removal of ‘subsidy’ on fuel in Nigeria, as a kind of New Year (2012) gift. As if 2012 will be different, prophets, parapsychologists and their likes had barely concluded their predictions before Nigerians are been asked to pay more than 215% in pump price for fuel (that is premium motor spirit PMS). Reports in the media pointed toward the real effects (backlash) are already being felt by the people with multiplier dimensions. To say prices have gone up is an understatement. However the crux of the matter here is no more the hike and its multiplier effects, nor Dr. Christopher Kolade’s board of the Subsidy Reinvestment and Empowerment Programme, neither is it Justice Alfa Belgore’s committee which is expected to dialogue with organized labour. It is that federal government of Nigeria owes Nigerians trillions of Naira which must be paid back, so that the people can pay for the consequences of the ‘subsidy’ withdrawal. Paying this amount is not a favour that palliatives from the two groups appointed by President Jonathan can negotiate away.

Fact of figures is that the Nigeria federal government is presently (at the time of writing this piece) owing Nigerians a total of over Sixty four trillion, two hundred and sixty-six billion and sixty million naira (N64, 266,060, 000, 000 trillion) in excess amount paid for fuel over the last 12 years of the present civilian dispensation. The figure represents the combined contributions by Nigerians to the now defunct Petroleum Trust Fund (PTF) and in Road Tax or Levy collected over the last 9 years (following the dismantling of toll gates and stoppage toll fares collection across the country. For the avoidance of doubt, when in 1994, the late General Sani Abacha military regime increased pump price of fuel to N17 per litre, and at the same time placed a N2 per litre surcharge on every litre of petrol bought by Nigerians. The regime explained to Nigerians that the money accruing from the surcharge will be administered by PTF to supplement government spending on infrastructural provisions across the country. PTF was disbanded by President Olusegun Obasanjo on assumption of office and directed appropriate ministries to take over the function of PTF.

However, the disbandment of PTF did not lead to cancellation of the Abacha N2 fuel surcharge by President Obasanjo. Rather than reduce the pump price, fuel price went up by almost 350% to N65 per litre. In the same vein, following the dismantling of the toll gates and subsequent cancellation of toll collection on Nigeria roads in 2003, President Obasanjo also introduced road tax of about N2.50. For ease of collection, the amount was also built into the N65 pump price for petrol. This also mean that for every litre of fuel purchased at pump, Nigerians has been and this collection has been ongoing for the last nine (9) years. As a follow-up, to the ‘subsidy’ withdrawal, President Jonathan is already mulling the return of tolls on Nigeria’s roads through cronies masquerading as private investors despite the huge amount of money contributed by Nigerians to maintain the same roads through road tax or levy.

According to a pilot study of used oils in Nigeria conducted by Prof. O. A. Bamiro (National Expert) and Prof. O. Osibanjo (Project Coordinator) for the Basel Convention Secretariat, there are a total of six million (6M) registered vehicles in Nigeria as of 2004. Of the 6million vehicles, sixty percent (60%) are cars or 4,200,000 cars (4.2m), while the remaining 1, 800,000 (1.8m) are trucks and buses. By 2007, the number has risen to seven million (7m) according to the Federal Roads Safety Commission (FRSC). This data from the FRSC therefore suggests that a million vehicles are registered in Nigeria every three year. Therefore, relying on the 2007 data from FRSC, the total number of registered vehicles in Nigeria at the end of year 2011 is 8m with a total of approximately 6m being numbers for cars while trucks and buses translate to approximately 2m.

Going by simple economics and mathematics, eight million (8m) vehicles will translate to about 50 vehicles for every 1000 Nigerians. Therefore, if we go by statistics provided by Nigeria National Petroleum Company (NNPC) that a total of 445, 000 litres of fuel is consumed daily in Nigeria. Factoring NNPC data on daily consumption, it therefore suggest that a total of 2670 million litres is consumed weekly based on twice a week fuel refill which translates to 1, 38,840,000,000 trillion litres for 52 weeks. In 12 years, Nigerians would have consumed a total of 16, 66, 080, 000,000 litres and by implication paid a total of N33, 32, 160, 000,000 trillion in excess for fuel going by the N2 fuel surcharge of 1996 which was cancelled in 1999.

As a corollary, based on the annual fuel consumption of 1, 38,840,000,000 trillion litres, the total consumption for 9 years since the stoppage of toll collection on Nigerian roads and introduction of N2 road tax and levy is 12, 49, 560, 000, 000 trillion litres and by implication paid a total of N24, 99, 120, 000,000 in excess payment for pump price of petroleum. This combination of the Abacha fuel surcharge and OBJ road tax accumulate to a total of N64, 266,060, 000, 000 trillion and the amount represent the amount being owed Nigerians.  Having painstakingly established the amount being owed Nigerians by successive government since 1999, it is rather surprising that none on the government side has bothered to mention these invaluable contributions of Nigerians towards the boosting the country’s economy and by implication development and maintenance of the same infrastructures as the purported President Jonathan’s proceeds from ‘subsidy’ removal would be directed towards.

From the foregoing, it is evidently established that ordinary Nigerians have been subsidising pump price of fuel used since 1994 and by implication the provision and maintenance of infrastructures such roads, hospitals, schools (including funding universities, polytechnics and monotechnics), among others. Had this amount been judiciously directed towards the original purposes they were went to serve including the refurbishment and maintenance of the four (4) existing refineries like the PTF did under retired General Buhari as the chairman of PTF, there would not have been a complete breakdown and degeneration of these infrastructures. This goes to buttress the arguments that the real problem as attested to by President Jonathan, Dr. Okonjo-Iweala and CBN Governor Lamido Sanusi is corruption and not the pump price of fuel.

From the analysis presented in this write up, it is very clear the government and its spin doctors and fuzzy economists can come forward to ask, how do we share the money? This is very simple; there is no need to physically return this money to every Nigerian. This amount can count towards paying for the so-called subsidy for the next 21years 8months, factoring the phantom amount being claimed by President Jonathan at three trillion (N3trillion) as the ‘true cost of the subsidy’ per year. This appears an easy way out for a federal government so desperate to play to IMF/World Bank dictates and to present itself as fellow traveller that shares the pains of Nigerians. However, should the federal government and its supporters in state houses prefer not to consider this option, I dare to say, this new year 2012 may become a significant one that will determine whether the current civilian democratic experiment will last or not. 

REAL COST OF FUEL PRESENTLY IN NIGERIA, BUT ARE WE BEING DECEIVED BY THE GOVERNMENT!!!

By Izielen Agbon Izielen Agbon

On December 10, 2011, if you stopped at the Mobil filling station on Old Aba Road in Port Harcourt , you would be able to buy a litre of petrol for 65 naira or $1.66 per gallon at an exchange rate of $1/N157 and 4 litres per gallon. This is the official price. The government claims that this price would have been subsidized at N73/litre and that the true price of a litre of petrol in Port Harcourt is N138/litre or $3.52 per gallon.

They are therefore determined to remove their subsidy and sell the gallon at $3.52. But, On December 10, 2011, if you stopped at the Mobil Gas station on E83rd St and Flatlands Avenue in Brooklyn, New York, USA, you would be a able to buy a gallon of petrol for $3.52/gallon. Both gallons of petrol would have been refined from Nigerian crude oil. The only difference would be that the gallon in New York was refined in a US North East refinery from Nigerian crude exported from the Qua Iboe Crude Terminal in Nigeria while the Port Harcourt gallon was either refined in Port Harcourt or imported. The idea that a gallon of petrol from Nigerian crude oil cost the same in New York as in Port Harcourt runs against basic economic logic. Hence, Nigerians suspect that there is something irrational and fishy about such pricing. What they would like to know is the exact cost of 1 litre of petrol in Nigeria .

We will answer this question in the simplest economic terms despite the attempts of the Nigerian government to muddle up the issue. What is the true cost of a litre of petrol in Nigeria ? The Nigerian government has earmarked 445000 barrel per day throughput for meeting domestic refinery products demands. These volumes are not for export. They are public goods reserved for internal consumption. We will limit our analysis to this volume of crude oil. At the refinery gate in Port Harcourt, the cost of a barrel of Qua Iboe crude oil is made up of the finding /development cost ($3.5/bbl) and a production/storage /transportation cost of $1.50 per barrel.

Thus, at $5 per barrel, we can get Nigerian Qua Iboe crude to the refining gates at Port Harcourt and Warri. One barrel is 42 gallons or 168 litres. The price of 1 barrel of petrol at the Depot gate is the sum of the cost of crude oil, the refining cost and the pipeline transportation cost. Refining costs are at $12.6 per barrel and pipeline distribution cost are $1.50 per barrel. The Distribution Margins (Retailers, Transporters, Dealers, Bridging Funds, Administrative charges etc) are N15.49/litre or $16.58 per barrel. The true cost of 1 litre of petrol at the Mobil filling station in Port Harcourt or anywhere else in Nigeria is therefore ($5 +$12.6+$1.5+$16.6) or $35.7 per barrel . This is equal to N33.36 per litre compared to the official price of N65 per litre. Prof. Tam David West is right. There is no petrol subsidy in Nigeria . Rather the current official prices are too high. Let us continue with some basic energy economics.

The government claims we are currently operating our refineries at 38.2% efficiency. When we refine a barrel of crude oil, we get more than just petrol. If we refine 1 barrel (42 gallons) of crude oil, we will get 45 gallons of petroleum products. The 45 gallons of petroleum products consist of 4 gallons of LPG, 19.5 gallons of Gasoline, 10 gallons of Diesel, 4 gallons of Jet Fuel/Kerosene, 2.5 gallons of Fuel Oil and 5 gallons of Bottoms. Thus, at 38.2% of refining capacity, we have about 170000 bbls of throughput refined for about 13.26 million litres of petrol, 6.8 million litres of diesel and 2.72 million litres of kerosene/jet fuel.

This is not enough to meet internal national demand. So, we send the remaining of our non-export crude oil volume (275000 barrels per day) to be refined abroad and import the petroleum product back into the country. We will just pay for shipping and refining. The Nigerian government exchanges the 275000 barrels per day with commodity traders (90000 barrels per day to Duke Oil, 60000 barrels per day to Trafigura (Puma Energy), 60000 barrels per day to Societe Ivoirienne de Raffinage (SIR) in Abidjan, Ivory Coast and 65000 barrels per days to unknown sources) in a swap deal. The landing cost of a litre of petrol is N123.32 and the distribution margins are N15.49 according to the government. The cost of a litre is therefore (N123.32+N15.49) or N138.81 . This is equivalent to $3.54 per gallon or $148.54 per barrel. In technical terms, one barrel of Nigerian crude oil has a volume yield of 6.6% of AGO, 20.7% of Gasoline, 9.5% of Kerosene/Jet fuel, 30.6% of Diesel, 32.6% of Fuel oil / Bottoms when it is refined.

Using a netback calculation method, we can easily calculate the true cost of a litre of imported petrol from swapped oil. The gross product revenue of a refined barrel of crude oil is the sum of the volume of each refined product multiplied by its price. Domestic prices are $174.48/barrel for AGO, $69.55/barrel for Gasoline (PMS or petrol), $172.22/barrel for Diesel Oil, $53.5/barrel for Kerosene and $129.68/barrel for Fuel Oil. Let us substitute the government imported PMS price of $148.54 per barrel for the domestic price of petrol/gasoline. Our gross product revenue per swapped barrel would be (174.48*0.066 +148.54*0.207+172.22*0.306+ 53.5*0.095+129.68*0.326) or $142.32 per barrel. We have to remove the international cost of a barrel of Nigerian crude oil ($107 per barrel) from this to get the net cost of imported swapped petroleum products to Nigerian consumers. The net cost of swapped petroleum products would therefore be $142.32 -$107 or $35.32 per barrel of swapped crude oil. This comes out to be a net of $36.86 per barrel of petrol or N34.45 per litre.

This is the true cost of a litre of imported swapped petrol and not the landing cost of N138 per litre claimed by the government. The pro-subsidy Nigerian government pretends the price of swapped crude oil is $0 per barrel (N0 per litre) while the resulting petroleum products is $148.54 per barrel (N138 per litre). The government therefore argues that the “subsidy” is N138.81-N65 or N73.81 per litre. But, if landing cost of the petroleum products is at international price ($148.54 per barrel), then the take-off price of the swapped crude oil should be at international price ($107 per barrel). This is basic economic logic outside the ideological prisms of the World Bank. The traders/petroleum products importers and the Nigerian government are charging Nigerians for the crude oil while they are getting it free.

So let us conclude this basic economic exercise. If the true price of 38.2% of our petrol supply from our local refinery is N33.36/litre and the remaining 61.8% has a true price of N34.45 per litre, then the average true price is (0.382*33.36+0.618*34.45) or N34.03 per litre. The official price is N65 per litre and the true price with government figures is about N34 per litre (even with our moribund refineries).

There is therefore no petrol subsidy. Rather, there is a high sales tax of 91.2% at current prices of N65 per litre. The labor leaders meeting the President should go with their economists. They should send economists and political scientists as representatives to the Senate Committee investigating the petroleum subsidy issue. There are many expert economists and political scientists in ASUU who will gladly represent the view of the majority. The labor leaders should not let anyone get away with the economic fallacy that the swapped oil is free while its refined products must be sold at international prices in the Nigerian domestic market.

The government should explain at what price the swapped crude oil was sold and where the money accruing from these sales have been kept. We have done this simple economic analysis of the Nigerian petroleum products market to show that there is no petrol subsidy what so ever. In the end, this debate on petrol subsidy and the attempt of the government to transfer wealth from the Nigerian masses to a petrol cabal will be decided in the streets. Nigerian workers, farmers, students, market women, youths, unemployed, NGO and civil society as a whole should prepare for a long harmattan season of protracted struggle. They should not just embark on 3 days strike/protests after which the government reduces the hiked petroleum prices by a few Nairas. They must embark upon in a sustainable struggle that will lead to fundamental changes. Let us remove our entire political subsidy from the government and end this petroleum products subsidy debate once and for all. It is time to bring the Arab Spring south.

Izielen Agbon Izielen Agbon writes from Dallas, Texas. izielenagbon@yahoo.com

He is former HOD , Petroleum Engineering Dept, former ASUU chairman, University of Ibadan, trained many operators in nation’s energy industry with pratical experience on our practices and policy focus in the last 20yrs

Man Of The Year

Man Of The Year