Fuel Scarcity: Nigerian govt. to pay $30bn exchange rate differentials to marketers

FILE PHOTO: Fuel Queue

The Minister of Finance, Ngozi Okonjo-Iweala, said on Wednesday that the Federal Government had agreed to pay 30 billion dollars foreign exchange differentials owed to oil marketers.

Ms. Okonjo-Iweala made this known on Wednesday in Abuja while briefing journalists after a meeting with the Central Bank, Petroleum Products Pricing Regulatory Agency, major oil markers and depot owners.

“The Federal Government has addressed all contentious issues with the marketers, such as the issue of the foreign exchange rate differentials.

“The Federal Government has agreed to pay the 30 billion dollars exchange rate differentials owed the marketers over the last couple of months.

“It is already in the process of offsetting the N185 billion debts owed the marketers with the issuance of the Sovereign Debt Note (SDN),” she said.

Ms. Okonjo-Iweala added that the Federal Government had been talking with the marketers within the last 10 days.

She added that the President wanted Nigerians to know that government was working on the situation and would resolve the issue in the shortest possible time.

Ms. Okonjo-Iweala urged the marketers to be patriotic in their dealings with the government as the issue affected all and sundry.

She commended Nigerians for their patience, assuring that the crisis would be over in the next couple of days.

“In the next few days, the queues will dissipate, the situation will be addressed and everything will return to normal.

“At the Federal Executive Council meeting today, the issue was discussed in terms of pushing forward and making sure things get back to normal,” she said

The CBN Governor, Godwin Emefiele, said the apex bank had met with banks and oil marketers to resolve all the contending issues associated with credit facilities.

He said that in the last one week, over 500 million dollars Letters of Credit had been opened by banks on behalf of the marketers.

He called on marketers who were experiencing delays in their Letters of Credit to alert the CBN, promising to step in and ensure the issue was resolved amicably.

The Executive Secretary, Major Oil Marketers Association of Nigeria, Obafemi Olawore, said the queues would ease off in the next few days.

He said that marketers had moved 495 truckloads of fuel to Lagos, Abuja and environs.

He said massive movement of fuel has been going on in the last three days, while three of its members imported three cargoes of PMS due to agreements with the CBN and the Finance Ministry.

“On Monday, major marketers moved 132 truckloads of fuel to Lagos, while 87 truckloads were moved to Abuja, and this is exclusive to the quantity moved by the NNPC, independent marketers and other marketers.

“On Tuesday, 137 trucks were moved to Lagos, while 139 trucks were moved Abuja. You can see that the amount we moved to Abuja was far more than the quantity we moved on Monday.

“It normally takes between three and four days to transport the fuel from Lagos to Abuja; hence we believe the queues will ease off by weekend, latest,” he said

He assured Nigerians that genuine efforts were being made to ensure that the queues vanished and normalcy returned.

Also, Farouk Ahmed, Executive Secretary, PPPRA, said the agency authorised eight companies to import PMS in March.

He said the NNPC and the Pipelines Products Marketing Company would be importing over one billion litres of the commodity in the same month.

According to him, with the over 500 million litres of fuel in the NNPC depots offshore Lagos and others across the country, Nigeria has total national sufficiency of 33 days.

“What this means is that, if there is no additional importation in Nigeria in the next couple of days, we still have stock for the next 33 days.

“Hence, there is no need for concern and panic buying. We are not only concentrating on Lagos alone, but also in other urban and rural areas,” Mr. Ahmed added.

The Executive Secretary, Depot and Petroleum Products Marketing Association of Nigeria, Olufemi Adewole, said the tightness currently witnessed across the country would soon become a thing of the past.

“Our members are currently meeting with banks to open Letters of Credit; once approved, cargoes of fuel will be imported.” (NAN)


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  • bib

    30 billion dollars exchange rate differentials in few months? How much fuel did we import in those few months? I m sure the country is paying for GEJ’s excessive campaign bills this year as we did in 2011 through oil subsidy.

    • share Idea

      Leave PT, they just inserted dollars to deceive unsuspecting public. How can the differentials be higher than the actual amount, I suspect the coordinator of the economy must have been quoted out of context. The only plausible amount could have been 30 billion naira…

  • Wähala

    So, where’s that baboon, #Dazmillion, to tell me from where Dr. NOI suddenly funds she’s using to settle this matter, he claimed Nigeria is broke because Govt. issued SDN and LC’s to marketers means nada… A government bond is as good as gold but the idyiot just wanted to display his limited understanding of Finance & Economics terminology by comparing his contaminated Nigerian education with a Harvard-trained, world recognized erudite like Dr. Anty Ngozi. Where’s the red-assed baboon to tell me a Promisory Note from a Govt is as good as toilet tissue? Just like Soludo, comparing his 3rd World education with a proven international icon is akin to comparing God & man… an abomination! Stoopid Clowns!!

  • Charles Owolabi

    What we need to do as a nation is to liberalize the down stream petroleum sector immediatly. These marketers like wale Tinubu are holding the country hostage.
    We should have listened to NOI in 2012 when she fought for a total removal of the subsidy. However labor and the likes of Oby ezekwesili and el rufia fought her , encouraging protests that brought the country to a stand still.
    This has continued to result in a depletion of our foreign reserves.
    The economics of this entire subsidy is wrong. the process of creating barriers to entry has helped a few individuals to become fabulously wealthy at the expense of the entire country. When in the world do we still have import quotas except Nigeria?
    These quotas given to a select group always creates a new class of millionaires who’s sole intension is to maximize their returns by earning super normal profits.
    NOI was right what we need to do is open up the sector and allow others to participate . This would allow for greater efficiency in the sector and inveriblely would translate to lower prices for Nigerians
    NOI and GEJ must move quickly to eliminate this subsidy. It would allow for the development of modular and more efficient refineries .
    NOI act now and save Nigeria from further heme raging .

    • amazing2012

      Do you want to say one person is above government ? Weak Government lead by a weak leaders deceiving weak minds !

      • Charles Owolabi

        Amazing have you ever heard of the word cartel?
        These marketers operate In a catel like manner because of the oligopolistic profits they make.
        I suggest you look up both terms catel and oligopoly for clarity.
        The only people deceiving Nigerians are the marketers
        We must remove the subsidy as suggested by Ngozi and open up the sector.
        Let us make sure Labor would not go on strike if it is removed and that el rufia and other APC members would support this policy inciative
        It would save us a lot of foreign exchange

        • amazing2012

          My problem with your submission is “dogging or sciffing, or leaving the path of the total solution to the problem” is the cable above the law ? Why removing subsidy is the solution instead to deal with the cable ? Do you think total removal subsidy will solve the problem ? Cable is cable, you either deal with them or they will find a way at all cost to keep you at ransom !
          By focusing on removal of subsidy is more unmerciful to the condition of masses because of the few “known” members of cable !

          • Charles Owolabi

            Amazing what you are suggesting is like dealing with the effects of a problem with out tackling the problem it self. In dealing with a catel what you do is eliminate the source of the problem be it oil drugs eor any other commodity where the barriers to entry are high. Once you eliminate those barriers the catel automatically is eliminated.
            That is to say once you allow the market to determine the price and any person is allowed to enter into the market it becomes a perfectly contest able market under perfect market situations. It therefore becomes impossible for operators to earn supernormal profits since information is available . Individuals would therfore vote by the feet and abandon stations with high prices thereby forcing the marketers to reduce their price and assume a new equilibrium position.
            I wish I could demonstrate this under a class room setting.
            This is what I teach. I am a professor of economics in a good university here in the US.
            Prosecuting the cabal does not solve the underlaying problem because others would take their place if there is a profit to be made. What solves the problem ultimately is what Ngozi has suggested – a total elimination of the subsidy
            I hope you understand

          • amazing2012

            Prof, I am sure you are disconnected with reality about Africa and Nigeria in particular. My earlier submission on global economic tragedy focussed on western ideologies as the basis of global socio-political and economic crises. We all know the world is govern by theories that emanate from the western sources. This critically mean, if the world is doing well then the theories and its source are tested and probing to be worthy.
            Theories and practice on issues relating to humans are very difficult to predict or successfully analyzed. Humans are the most difficult to presume, not withstanding, cabal in Nigeria dictate what the society should be not the government. For instance: when you diversify the oil market through theory of subsidy removal, the cabal will control the oil prices by saving it to make it unnecessarily scarce, once the product is scarce they control the market price and supplies. This is not economic theory, it is practical social theory limited to particular people and country with particular mindset living under “I don’t care” system.
            No theory can work in a weak system where laws does not work. Members of cabal are humans and part of the society. Many people benefits from the activities of master cabal , name it from fuel attendant who extorts money before he full your tank, to gas filling station manager who temper with the fuel discharge Meter or some time connive with the drivers and the security attached to the fuel tanker to sell the stuff at “black market” for maximum profits. These are human behavour that can only be control/ manage by applicable laws. Removing subsidy will not stop the activities of cabal because our refineries were deliberately left not to work. When cabal get a free hand to import fuel and decide on its price, DEFINATELY the cost will too high, they don’t care who will survive it or not. Again, they have a strong union that will come together to regulate the price of “their” products. For instance recently when goverment reduce the price of the product do you know nothing come down ? Instead prices go high by making the product scarce !
            Solution:
            1. Refineries to work and more to be built.
            2. Government to regulate prices, but how do you bridge the distance cost ?
            3. To proscute all the cabals.
            Let me remind you sir, in Nigeria everybody has control over what he/she is doing right or wrong provided he/she did not involve or identify his/herself into politics of opposition.
            To cont:

          • Charles Owolabi

            Amazing first of all I would like to acknowledge the wonderful contribution you have made to this debate. Your contibution is useful and there are parts that I totally agree with.
            First of all I would like to state for the record that I am an African A Nigerian and a Yoruba who had my formative years in Nigeria and did my first degree in a Nigerian University- great Ife before going over seas for further studies. My secondary school education was also in Nigeria – Kings college so I know how important culture is in our society and the formulation of group dynamism. It is very important. However I am one of those who believes that culture is dynamic in nature and can be moulded to suite the prevailing conditions of the time. As important as it may be there is talk about cross culturalization due to external influence that can not be ignored in this modern time. We therefore borrow certain aspects from other cultures that help to promote or reneforce the good aspects of our culture. It is therefore wrong to beleive that African cultures or people largely internalize the nagative aspects of other cultures.
            Indeed a progressive social scientist seeks to understand the underlaying factors that propel certain trets in a particular culture and on a comparative basis develops theory that is intended to produce a positive impact on the on his immediate society. This may require looking at other similar societies to find out how they have dealt with similar problems bearing in mind that no culture is superior to the other.
            So associations or cultural interactions do not have to only bear negative externalities . Africans who study in western systems therfore by extension do not have to inculcate only a nagative value system. A blend of the positive aspects of their culture and value systems can be adapted to futher promote and develop our culture.
            I am one of those who believes that we can leverage our educational interactions with the western world blend it with ours and produce competitive systems that can compete with the west.
            Amazing I hope you understand my Position on culture
            On the issue of western ideology being the root cause of global economic crises. Though I would agree with you to some extent that the ideological projections of western culture have had an impact on global crisis I also beleive that Africans to a great extent have been responsible for most of their own problems. African have deliberately refused to go the extra mile in ensuring that adequate measures are put in place to extinguish retrogressive tendencies. In the Nigerian experiment we have only exulted those trates that are negative. Those trates that have a net negative impact on society are promoted. We have failed as the great Chinua Achebe put it to develop the those character treates that come naturally to our various ethnic nationalities in Nigeria – read his book ” there was a country”
            The result is that Nigeria as a country has not been able to actualize its full potential.
            Having said that I would suggest that a way out is to use a common denominator to approach the problem. Since economics is a bases of differentiation. We must strive to put in place systems that foster competition in Nigeria for in competition efficiency is developed and where there is efficiency there is bound to be greater value / social benefits that accure to the people. A way to do that is to ensure there is a liberalization of various sectors and an elimination of the barriers to entry. Amazing this is not just western economic theory but sound social practice that have been tested in the local African economic context.
            It is through liberalization that a lot can be archived.
            Of course in the implementation of this policy inciative aspects of the peculiar nature of our society has to be taken into account. Every system adjust and modifies to ensure that such policies are adaptable but implement they must do. A failure to do so would just like in the Nigerian case result in a rapid decline of those institutions
            So to relate what I have just written to the real nigerian situtation means that our policy makes must adapt to modern trends by implementing policies that would bring about greater efficiency. They must also take into account the peculiar nature of our country in implementing such policies .
            They must strive to ensure that there is a measure of equity in the implementation of policy Bering in mind the social costs that such policies may generate. And finally they must build some sort of social net to ensure that those at the bottom are not the hardest hit.
            Amazing I hope you understand my thinking.
            I have enjoyed your contributions to this debate and acknowledge the salient points you have raised.
            Brilliant contibution amazing. I have taken note

          • amazing2012

            Morning my Prof:
            I woke up today with more to write, having sure I have who is also ready to read.
            Books, theories, articles etc are direct experience of the author. Systematically there is no universal applicable theory. Because a theory can be standard but when implementing the theory it must consider diffrencial factors which in reality dictates the success of the implementation. These factors can be human(cultural/individual difference) or natural environment.
            Cultural factors can hinder the success of implementation of any theory by which the cultire rejects as taboo, even though the theory is liberal and acceptable in another society. For instance: bank interest theory, in many societies interest is rejected as forbidding whereas in many not only accepted but demanded and negotiated. What of Genital mutilation and woman status by societies. I once asked an African friend that they should a woman drink the wash water of her dead husband to probe her innocence for his death? He can’t figure out any answer, and no research is conducted even by the victims or the educated among huge tribe, that perhaps will aim at its reduction. Or the issue of polyandry ets remember everything is connected to everything at certain distance and frequency. Events unfold events only wisdom mind can figure out. These theory bias include individual deliberate errors occasion by cultural orientation and beliefs of that individual.
            Another issue is hat of environment, although environment is natural but they are diffrence and this temper with any implementable theory, for instance medical science( pharmacists) most drugs are made to manage its sustainability by each environment. As well as the people diffrences shape by the environment.
            I will suggest, every theory emanating from any society that is not ours(Nigeria) should revisited by experts like you to domesticate it and match it to work In our society, environment and class of people. As little as social stratification can effect theory acceptance and implementation. Thank you sir,

          • amazing2012

            2. Human behaviour are made of culture which shape the way we think and behave. Culture itself is made by ontological believes, experience, history and acceptable way of survival. No theory can work effectively without taking into consideration on how to go along with culture. This culture can be group or individual. In both, human behaviour need to be study carefully before “application of scientific” procedures.
            For instance:
            Global Economic melt down; (crises on oil prices) I read a lot from great economists like you sir, who believed on theories that is economic base as reason behind collapse of economics. Please read my takes;
            War and conflicts are the basic reason behind our present economic catestrophy. War has no budget and no one can accurately predict its end. Anytime the western world instigate conflicts, the cost of managing without end is the problem that spills to economy, geopolitics and social change of people perception. War is sure through means of proliferation of arms to aggrieved and confused societies.
            With war and conflicts at hand huge amount is needed to manage it, from kitting a solder to weaponry. Before, war business is lucrative through excessive gain of “spoil of war” (oil) is use to update all the debt accrue from the war but now the native of the land always rise to protect their properties. This give reasom to the control of the oil resources by arm rivals and subsquent selling of the oil to especially countries that are sanction by the same west. Oil is cheaper through illegal means, no bereaucracy, no long procedures. It’s simply ” cash and carry” so easy, low price and quitely without OPEC control or notice. Again the western world sanction such countries using loopholes theories that resulted to fueling of crises by both the western world group in one side and the eastern block on the other. This made the legitimate source of oil business to be left with on buyers of the black gold. And eventually resulted to crumble of oil price ! Again link to economic melt down due to low revenue from oil.
            As a student of social science, I noticed the effect of deliberate control of students conscience by the western countries they study. For instance: people that study in USA and UK come back home not as Africans culturally but Europeans, and try to apply theories on us without diligent study on the cultural foundation of our societies. We are more like experiential pets by western oriented scientists. Whereas, when you study in some countries (not western), you will come back with your knowledge and your cultural understanding untouched. In the western schools, they assimilate your mind to their thinking of the world view and made your consciousness to believed on only their way as the best mean in application of change. Most western theories don’t work in Africa, though the theories are quiet Ok. The theories can be scientifically probing worldwide but failure to consider “humans” as factor/instrument of the application of such theories made MOST of western world theories failed woefully. For instance; the concept of patriotism/nationalism alone has made many projects to fail, when an executive has the mindset of western patriotism not his countries nationalism, he/she will DEFINATELY be guided by western values/ thinking on any project or program he/she designing or supervision. The effect is that, he/she will begin to think of issues that does not exist at the absence of what is in existing.
            In Nigeria, duringFCT Minister we have had OXFORD graduates tenure but all their theories failed because they failed to put together social factors on their theories. Now we are having HARVARD graduate and the economy is getting worst. When your culture is distorted, you will spent most of your life compromising and fighting between your inner/original/ancestral culture and that shape your adult thinking. Western world teaches western values instead of pure universal educational curriculum !
            The theory of subsidy removal will also bring hardship to people in a society that has no social infrasturacture, no projection, and weak application of laws. Etc
            To cont: I will link, through prediction the consquendes of removal of fuel subsidy in Nigeria and give reference to at least two different nations with different cultural antecedent.
            Thank you, sir.

    • Concerned

      I agree with your concerns about the fuel subsidy but a more prudent strategy would have been a phased withdrawal say over 5 years which would have given time for the markets to adjust and taken the bit out of the protests

      • Charles Owolabi

        Concerned I hear you but Nigerians adapt to situtations faster than most people.
        What I am saying is that if the subsidy is removed and the barriers to entry are eliminated . Players in the sector would immediatly act. They would start building refineries right away. It does not stop the importation of the product in any way. Indeed it would continue in the short run but there would be greater efficiency as more people with access would import and in turn reduce the margins obtainable while delivering greater economic benefits to the entire chain. – this is purely an economic issue.
        We don’t need to wait for 5 years . If you wait the temporary situation may assume a permanent nature
        I hope you understand

        • Concerned

          Your argument rings true but I submit that in the Nigerian context economic equations are readily distorted by the political equation in which vested interests have the power to instigate unrest and eliminate opposition.

          A more considered approach may mitigate against such manipulations and minimise the economic impact on the less well of at the same time

          I think we both agree the subsidy needs to go

      • Uzoma John

        The question you guys need to ask is why Nigeria is still importing petroleum products. In the first place, we don’t need marketers importing fuel into the country. Nigeria should rather be exporting both crude and refined products. Why are we creating employment for other countries for buying refined products from their refineries? Where are the 3 new refineries GEJ promised Nigerians in 2011? Not even one is seen anywhere. What about the 3 old refineries in PH, Warri and Kaduna? Why hasn’t GEJ the transformer transformed these refineries to ease the sufferings of Nigerians? Okonjo Iweala is a bad economist, if ever she is one. Rather than pay out such huge sums month in month out, as the coordinating minister, why not put pressure on GEJ to make sure the existing refineries are functional since the new ones promised was just for electioneering campaign. Any serious government would built at least 2 standard refineries in 6 years. Do you know the number of jobs that would have been created if the refineries are functional. The value chain effect would have led to over 5 million jobs created in that sector alone from the inception of this incompetent government. Anyway, common sense does not require having a Harvard degree or Pitakwa fake PhD. Nigerians should tarry. March 28 is around the corner.

        • Charles Owolabi

          Uzoma John where were you when Ngozi tried to do just that in 2012?
          The entire Nigeria rose up against the woman driven by Labor and people like el rufia and Oby ezekwesili. They embacked on a one week general strike to ensure that the subsidy was not removed. They all called for the sack of NOI for even suggesting that the subsidy should be removed.
          NOI has always argued that Nigeria has no business importing petroleum products and that if the right inciatives are put in place Nigerians would respond. However her message got swallowed by the opposition that turned the entire thing into politics.
          They forced government to continue to pay subsidies to the marketers now the same people cry that why can we stop importing.
          This is absolute nonsense- we want to have our cake and eat it too.
          Look for some one to blame- NOI should be the target. – lazy thinking
          What we must do immediatlly is liberalize the down stream sector which would allow for investments to flow into the sector.
          Government has no business owning refineries. Every institution owned by government has always failed in Nigeria.
          What we must do is send the right policy signals to the sector and allow the private sector to operate. The private sector tends to have a structure for managing businesses of this nature
          I hope you understand. NOI is not the enemy the true enemy are the marketers like wale Tinubu who do not want the down stream sector liberalized totally
          To conclude I suggest you look up NOIs educational archivements.she graduated with honors in economics from Havard and also holds a masters and PHD in economics from MIT. These institutions are the best in the world in the field of economics so I suggest you stop being deliberately mischivious. most of the people who post comments here are only beer palour economists

          • Uzoma John

            Owolabi, that is not true. Ngozi only wanted to stop subsidy so that marketers will import and sell at arbitrarily higher price. There was no mention of building refineries. What I posited was why not Ngozi promote the building of refineries instead of importation. You see where my position is different from yours. You guys don’t read and you want to start attacking baselessly. Or have you been infected by GEJMANIA- Cluelessness and incompetence.

          • Charles Owolabi

            Uzoma you turn economics up side down. How can you say that the removal of barriers to entry in a sector would increase the price of a product?
            This is economics according to Uzoma.
            In economics when a few people or a single individual controls a market he enjoys monopoly profits or in the Nigerian case where there are a few players Oligopolistic profits. However when the barriers to entry are eliminated the market moves to what you call a perfectly contest able market under those conditions you have more participants in the industry and greater efficiency in the sector. This efficiency translates to lower prices for the consumer as profit margins are reduced as a result of better information. There is a general movement towards a new equilibrium position. That benefits consumers and not the few marketers that were involved in the sector in the first case
            Uzoma that is the economics.
            It follows that individual players would push to attain greater levels of efficiency in the medium term by building refineries. There are costs associated with transporting the product from overseas to Nigeria and clearing those goods. All those costs would be eliminated if a player had his refinary here in Nigeria. Those importing therefore would not stand a chance since their costs would be significantly higher than those refining.
            Ngozi does not have to come and announce to Uzoma or indeed Nigerias that they must build refineries all she has to do is send the right signals and the players would respond.
            Indeed this is already happening. Players like Dangote orient petroleum
            Antonio oil and a few others are already responding to signs that the government is putting out. If the subsidy is removed and the price of petroleum products is determined by the forces of demand and supply surly refineries would be built with speed.
            Uzoma please try and learn. Part of the problem we have in Nigeria is that people refuse to learn. They continue to hold on to positions that can not be defended. That is the black mans burden. He is more interested in protecting his ego than advancing his understanding.
            I hope you are clear now on who is clueless.

    • Kay Soyemi (Esq.)

      Don’t be fooled.

      This was always going to be the payback for “donating” money into the GEJ political campaign coffers.

      A good portion of this money would be destined for the same coffer.

      The question should be asked why so few are being “compensated” for the “loss” due to the failure of government?

      Do the rest of Nigerians shop in different markets and are they not similarly affected?

      What about others who import goods on credit and sell on with the hope of repaying afterwards? Are they not similarly affected?

      Shine your eyes, bruv.

      • Charles Owolabi

        My dear brother I do not deal in the realm of speculation. This issue of subsidy has been with us for while. Past Nigerian leaders only played lip service to this issue.
        Ngozi has been the only one who identified this problem as a drain on our economy. We are all withnesses to her push to liberalize the down stream sector. In 2012 labor called for her removal for even attempting to suggest that subsidy must be removed .
        It is only a sound economic manager who says it as it is and does not use such serious issues for politics.
        Kay what we need to do is ensure that this entire subsidy is removed completely. The sector must be liberalized and barriers to entry created by the government eliminated. Once this is done the craving for importation would stop as it would become uneconomical to do so.
        Individuals would surly vote by the feet. Indeed an opening up of this sector would allow all these local refineries to upgrade their processes. All these boys in the Niger Delta refining crude using drums and simple heating technology would be encouraged to upgrade their production techniques.
        Kay you would be amazed at how resilient and innovative our people are. We can bridge the gap in a short time. The technology for refining products is old. Individual Nigerians have the capacity to build refineries using local technology with only 20 percent of the parts coming from outside.
        I refer you to a Nigerian who did just that in warri – The Late George Enemoh of Ascon Oil who built an entire refinary in Warri using local materials and using ex Warri and kaduna refinary staff to accomplish this feat. This modular refinary is still in warri and would have been operational if the man had not died in the 2005 bel view crash- we lost a great Nigerian. The entire refinary was designed and fabricated here in Nigeria. The only portion that was to be imported was the catalytic cracking unit. So what this means is that the technology and skills to design and develop these refineries exist here in Nigeria and the right incentives – economic would invigorate the entire industry.
        Other examples are there I refer you to what our Ibo brothers did during the civil war. Most of the petroleum products used in Eastern Nigeria during the civil war was refined in locally fabricated refineries in Various parts of the East.
        After the defeat of the ibos the federal government should have encouraged the dissemination of this technology- one wonders where the industry would have been if we had adopted this economic policy initiative.
        NOI should send the right signals to the sector by removing this subsidy immediately.
        I agree that it has been difficult dealing with this sector and with Nigerians as a whole but as a policy maker she must continue to sensitize Nigerians on the need for change. She should not relent. In the end people would see the importance of removing this big drain pipe on our economy
        Kay assuming what you are saying is even true that part of this money is going to PDP which I doubt because Wale Tinubu would never hand GEJ one Kobo , it means that a complete removal of this point of leakage would ensure that GEJ does not get a any money corruptly from this source
        So get your APC friends to sign on to the removal of the subsidy now.
        They should not play politics with this issue.

        • Kay Soyemi (Esq.)

          Bruv, you are preaching to the converted.

          I have always been in support of deregulation and the passing of the PIB; in addition to resource control because I feel this would wake up the latent creativity in the Nigerians.

          Having stated this, neither PDP nor NOI would deliver these if they have failed to do so in circa six years when they had plain sailing.

          I note you have not addressed the matter of inequity that the sop to the oil marketers represent. Does that mean you agree with the GEJ admin that the other economic actors are less deserving of compensation for the losses triggered by government inefficiency and incompetence?

  • amazing2012

    …..courtesy of economic think thank, Harvard graduates, economic experts etc ! Confirmation of failure !!

  • mambo

    $30 billion for what? That is almost half the country’s annual oil revenue. These so called economists are being deceived, and must not understand anything about finance, or they are colluding with the oil marketers to defraud the country big time. That money could comfortably build 6 new refineries. if that money is paid the country will soon go broke, and whoever wins the election will have nothing left to carry out development projects. This oil marketer stuff and oil block idea are the main things draining the country. Looks like no hope for Nigeria, regardless of who wins the election.

    • ivelyne

      Maybe. But right now we need a quick solution to fix the current problem. We can’t make do with fuel queues for the next three years while they rebuild new refineries. We need measures that alleviate the current crisis while preparing the ground work for a future solution. GEJ has already started the change process. All we need now is continuity…

      • Johnson Omale

        You should be ashamed to say that ‘GEJ has already started the change process’ after 6 years? The refineries if well managed, there wouldn’t be need to import fuel. 6 years, a clueless president could not find solution to fuel problem and you’re he has already started the change process. Yes, the process of vacating the Aso Villa, nonsense.

    • Kay Soyemi (Esq.)

      Bruv, I am sitting here and shaking my head with sadness and thinking “How did we get here?”.

    • share Idea

      Leave PT, they just inserted dollars to deceive unsuspecting public. How can the differentials be higher than the actual amount, I suspect the coordinator of the economy must have been quoted out of context. The only plausible amount could have been 30 billion naira…

  • Jessica

    I think it is a smart move on the part of the government. GEJ is always quick to take the initiative.

    • Jones

      Giving promissory notes on debts is in your warped mind a smart move. Where have all the money gone? May your generation be blessed with President Jonathan’s quickness in resolving national issues. If not for elections, the president. ..

      • sawston

        No responsible CEO will import fuel based on IOU at a time when there is potential change of government. No bank will open LCs without cash backing. Ngozi is appealing to CEOs patriotism? To support a clueless government and run your company to bankruptcy is not patriotism.

        • Charles Owolabi

          Sawston please ask questions before posting rubbish . SDNs are financial instruments similar to bonds that are tradeable
          These instruments are used for such complex transactions that are repetitive in nature. Banks often discount the said instruments which the hold as part of their asset base and redeem same from government at a future date. The fact that it is used as a form of payment is not unusual and does not signify that a country is broke. The United states is the largest issuer of debt instruments – bonds etc- would you say the US is broke?
          I think people should be careful with the words they use.
          Indeed governments deliberately use such instruments to deepen their securities market. The more sophisticated a financial system there is , the more funding instruments you would find
          Please stop displaying your ignorance
          Nigeria is far from broke.
          The country is still meeting its obligations internally and externally.
          Further we must move to close up this drain pipe- how you understand

          • sawston

            Nigeria is broke that is why it is issuing IOU. Why do you assume I am ignorant when you don’t know my educational background. You can make your point without being insulting. Of course the US is also broke that is why the government is borrowing money and issuing people with bonds which is a fanciful name for IOU. The value of the bond depends on whose issuing it. That’s why you have rating agencies and why some governments have their bonds declared as junk and no one will touch it. With a declining external reserve that cannot support 10 months of imports, what is the rating of FGN bond by rating agencies? JP Morgan is already threatening to remove Nigeria from its index of emerging economy currencies.

          • Charles Owolabi

            Saws ton if you are suggesting that because a country issues a bond means that it is broke then there is truly nothing to discuss with you because the foundation of the entire global economy is based on the issuance of securities which are used to finance development. Most developed countries and advanced economies have a highly developed securities market that allows for the efficient utilization of money within their system
            It is indeed to simplistic to say because an individual issues a bond then he is broke.
            Money like any other commodity has a time value. A country may have the resources to undertake a project but still issues a bond for a variety of reasons for example they may do so because of more favorable interest rates obtainable overseas
            Yes the party issuing the bond matters. However I totally disagree that reserves are the major determinant of bond grade and yield that is false economics.
            The underlaying determinant of the bond grade rests in consumer confidence. In other words the perception that the issuing party would meet its payment as at when due. A host of factors are at play in this regard- the productive capacity of the economy is primary
            A country might have huge reserves but still have a low bond and credit rating because of political and social unrest examples are countries like Libya , Algeria , Iran etc to name a few.
            Nigeria on the other hand may not have as much of a reserve as Libya but has a more favorable rating because it is viewed as more politically stable. Investors would therefore be more inclined in investing in Nigerian securities because they feel their investments are safer in Nigeria than Libya in our example
            Our credit rating was just affirmed as BB- and stable by Fitch. This is despite the global fall in crude oil prices.
            Fitch pointed out that Nigeria had embarked on a diversification program that was bound to be beneficial to the country in the medium term. They sited growth sectors like Agriculture housing transportation power as areas that had the potential of propelling the growth in our economy further . Manufacturing and processing were also identified as areas that had huge potentials. They commended the economic managers for instituting policy iniciatives that would unlock these sectors
            So my dear brother while you look at a static figure – reserves as the sole determinant others are looking at levareaging greater value within the Nigerian economy for more inclusive growth and development
            I hope this is clear
            Your educational background means nothing to me. Lots of Nigerians have certificates but don’t really understand what they studied.

  • warry

    If Nigerians had listened to GEJ in 2012, instead of listening to the ‘Change ‘ people and NLC,we would not have found ourselves in this mess. Remove subsidy and everything will be normalized in due course like privatization ongoing in the power sector.

  • favourtalk

    they knew this before but decided to leave nigeria in bad shape and even cause a bigger problem with scarcity of fules around the cities in nigeria, they feel no heat despite the fact that they know the consequencies of such on the head of the common man. we cant continue this way, we need change to salvage this nation