Re: USA Africa Dialogue Series - How do Nigerian fuel subsidies work, what are their purposes, and who benefits?

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Dearest Dr. Falola,

Your leadership has caused an upturn in all of our spirits. The freshness of your perspectives and your positive and inspiring energy continue to be laudable. We appreciate your tutelage and guidance on challenging issues. Thank you for helping us to always keep focus. We thank God for you. You are a blessing to the world and a great pride to Nigerians. We bid you keep up the good work.

Here is an insert of USA AFRICA DIALOGUE as a valuable world community resource on AV: http://www.africanviews.org/component/content/article/1064-civil-society/48573-usa-africa-dialogue-series

We intend to motivate organizations and scholars working to improve our humanity to have a logically collated and coordinated web presence that reflects accurately their activities. So that we can continue to build a robust intelligence that serves for an even more vibrant efficacious society.

Much love kind sire.

Sincerely,

Wale

Perhaps you remember us meeting briefly at the ASA Conference in New Orleans 09, Dr Mazrui, and Dr. Zeleza were present

 

 

On Wed, Jan 11, 2012 at 2:22 PM, Toyin Falola <toyin....@mail.utexas.edu> wrote:

A FRAMEWORK  FOR GLOBAL INTELLIGENCE ON AFRICAN AFFAIRS

 

Wale Idris Ajibade

How do Nigerian fuel subsidies work, what are their purposes, and who benefits?
http://www.africanviews.org/Pundits/2012/01/10/How-do-Nigerian-fuel-subsidies-Work-what-are-their-purposes-aND-who-benefits/Comment-page-1/#comment-698

How do Nigerian fuel subsidies work, what are their purposes, and who benefits? | African Views Intelligence

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How do Nigerian fuel subsidies work, what are their purposes, and who benefits?

Posted on
January 10, 2012
by AV

A FRAMEWORK FOR GLOBAL INTELLIGENCE ON AFRICAN AFFAIRS
Dear Friends and colleagues
The questions remain: How do Nigerian fuel subsidies work, what are their purposes, and who benefits?

Nigerians and sympathizers took to the streets in DC, London, New York, DC, Vienna, Dakar, and Jo-burg and all over Nigeria to protest the Government decision to remove fuel subsidy from its expenditure budget. It appears that the government is caving in to the pressure from the people according to the latest information that the Senate will mediate between the government and striking labor unions to end the deadlock and recent announcement made by the Minister of Finance and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, saying that state governors entered into an agreement with the Federal Government on the removal of the fuel subsidy 6 months before she took office ( see full article in Tribune ). This indicates that she doesn't want to be solely responsible for the decision made by her office. Okonjo-Iweala had previously argued in favor of the Subsidy removal, saying that Nigerians won't suffer in vain - (see full article in Punch) How Iweala convinced Jonathan et al (see full article in Vanguard). Okonjo-Iweala once asked a Chinese foreign mister about how to deal with Nigerians because they are undisciplined (See this article on Ted)
 

Like most scholars around the world, we have buried our heads in research materials trying to figure out how removing the subsidy is a necessary course to address the root cause of poverty in the nation. In our observation, we found Nigerian scholars to be engaged and committed, while some few people especially on the listserv and discussion boards reacting very impulsively - disrespecting, attacking and breaking each other's spirit using unworthy nouns like mad, stupid, fool, etc..(We decline to mention names). Psychological violence on the discussion forum is not too far from far from those looting and burning on the streets, as well as police atrocities in this time of crisis. We consider all of these factors as part of the collective consciousness or collective neurosis of the Nigerian crowd. People are watching and listening all over world. Everything Nigeria stands for and how its people handle crisis are now under the microscopes and constitutes the nation's contribution toward its role in world peace and global stability.
Clearly, Nigerians are incredibly clever people, and that may in fact be a problem. Simply because they know that they are and therefore their social relationship is rigged with suspicion of one another and is often grappling with the illusion of limited resources. When this is the case, intense competition drives people to outsmart, outrun, or take out one another in order to have access and control of obvious resources. As a matter of fact, survival becomes the daily Modus operandi. Smart Nigerians are never to be under-estimated under any circumstances. It is not a surprise that Nigerians make the highest educated expatriates in Diaspora. Nigerians are worth much more abroad than at home. That's one of the main reasons that people emigrate. They bail the rat race at home. Nigerians at home will often say that if you can't beat them, join them. This mean they won't change, which in turns mean that many do not believe in ideas. Power talks but money is the ventriloquist. Money talks though power in various ways: government, religions, media, etc. So no one ever really sees the puppeteer. This is analogous to the dilemma of the government.

The Government of Nigeria had a problem from the beginning. It had never acknowledged that it was handed a broken clay pot from the colonials, so the illusion of plenty persisted as well as the anxiety of insufficient creates a heritage of greed and corruption. Let's be candid. A broken clay pot can never be fixed. It has to be remolded from scratch. These are no criticisms, many Nigerians are well aware of the fact that things are not working as they ought. However, many optimistic Nigerians are proud of their nationhood or what they envision it to be. They are committed to talking, singing, and writing about fixing the broken clay pot. Pessimistic Nigerians simply blame the government for all the social ills in the country. People tend to forget that governments are people. Just like looking at one self in the mirror, they reflect the collective consciousness of both the optimists and pessimists.
This incumbent government has a trust issue, just like those before them. This is best analyzed by Onyekachi Ubani during this interview on Fuel Subsidy Removal (http://www.youtube.com/watch?v=pMD79XImgqo) it is not the first time they removed this subsidy. Our take is that the government underestimated the intelligence of its people (once again). The government argued that it will "put the money into areas that will facilitate production, such as provision of power supply, providing state-of-the-art hospitals, especially to curb the maternal mortality rate. Government would invest heavily in refineries, which will be sustained by private investors, as well as hydro power projects. This, including others, would create more jobs for our people." The government cannot be telling people to expect things whilst putting measures place to protect itself against the very same that people are afraid of. The fact of the matter is that one cannot attempt to do right in one department of life whilst doing wrong on the other.
 

Best analysis of Nigerian Fuel Subsidy Crisis by Onyekachi Ubani
 
In due course, deregulation is a good thing, but one has to get to the river before you can cross it. The fact remains that Major oil-producing countries continue to direct higher tax rates at oil and gas extraction income. Generally speaking, the tax rates imposed by those countries on oil and gas income are 10-60% higher than the generally applicable tax rate. In Saudi Arabia, for example, the income tax on oil and gas extraction income is 85%, while the non-petroleum tax rate is 20%. In Nigeria, the petroleum tax rate is 85%, while the generally applicable rate is 30%. In the United Arab Emirates, the petroleum tax rate ranges from 55-85%, while the general rate is 20%. See details here: Comparing U.S Govt.
 


Fuel prices: For OPEC members, it is different tales for different states:
http://www.tribune.com.ng/index.php/features/30760-fuel-prices-for-opec-members-it-is-different-tales-for-different-states
 
The government ought to be investing in the people and not exploiting them. Clearly the Nigerian government is not doing enough to encourage home grown producers. Oil production tax is one of the highest in the world. Take for example OANDO: a Pan- African multinational energy corporation. Headquartered in Lagos, Nigeria, and active in various African countries, it is engaged in every aspect of the energy value chain, including Petroleum marketing, exploration and production; refining, and power generation. Oando is Nigeria's largest non-government owned company in the energy industry. Nigeria produced an average 2.2 million barrels of crude a day in December, according to data compiled by Bloomberg, and is the fifth-largest provider of oil imports to the U.S. At least 90 percent is pumped by Shell, based in The Hague, Exxon Mobil, San Ramon, California-based Chevron Corp., Total SA and Eni SpA in joint ventures with state-owned Nigerian National Petroleum Corp. Gasoline prices in Nigeria, where two-thirds of the population of about 164 million live on less than $1.25 a day, more than doubled after Jonathan abolished the subsidies on Jan. 1. The price had been capped at 65 naira a liter, undermining investment in refineries that forced the nation to import about 70 percent of its fuel. Note that Oando is the only corporation that is drilling, refining and distributing in Africa. OANDO is doing great things but needs even more government leverage. See information about deregulation here: http://www.oandoplc.com/industry-topics/deregulation/

Nevertheless, comparing consumers' subsidy and producers' subsidy is like comparing apples and oranges. The government failed to convince its people with sufficient evidence that the benefits from removal of the fuel subsidy can outweighed the present hardship the people are facing. So in all aggregate the protesters (peaceful demonstrators) were right to voice out their concerns and we hope that the Nigerian governments as well as other African states start to respect and consider the wishes of their subjects.
 
We hope that the people of Nigeria win this round of the battle towards rights of citizenship and government call to order. We encourage Nigerians to continue to demand integrity, accountability, and transparency and not to give up because the purpose of a government is to serve and invest in its people.
 
Article by Wale Idris,
Executive Director, African Views
AV is a framework for global intelligence for African Affairs
Relevant Resources:
Fueling America: Key Facts and Figures: https://docs.google.com/viewer?url=http%3A%2F%2Fwww.nacsonline.com%2FNACS%2FResources%2Fcampaigns%2FGasPrices_2011%2FDocuments%2FGasPriceKit2011.pdf
ANALYSIS OF THE SCOPE OF ENERGY
SUBSIDIES AND SUGGESTIONS
FOR THE G-20 INITIATIVE
http://www.iea.org/weo/docs/G20_Subsidy_Joint_Report.pdf
Nigeria Federal Budget Office for Revenue and Expenditures
http://www.budgetoffice.gov.ng/
Gasoline Prices, OPEC, and Biofuel:
http://www.farmfoundation.org/news/articlefiles/1698-zilberman.pdf
Estimating U.S.Government Subsidies to Energy Sources:
http://www.elistore.org/Data/products/d19_07.pdf
Fuel Subsidy Removal with Onyekachi Ubani:
http://www.youtube.com/watch?v=pMD79XImgqo
How Gas Prices Work: http://auto.howstuffworks.com/fuel-efficiency/fuel-
consumption/gas-price.htm
What causes gas prices to rise?
http://curiosity.discovery.com/question/causes-gas-prices-rise
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This entry was posted in Government Activism, Government Activity, Human Rights, Pundits, West Africa and tagged and who benefits, Fuel, Iweala, nigeria, Nigerian fuel subsidies work, Occupy Nigeria, Onyekachi Ubani, what are their purposes. Bookmark the permalink.
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One Response to How do Nigerian fuel subsidies work, what are their purposes, and who benefits?
    .      
        .       test1 says:
January 10, 2012 at 11:43 pm
Fueling America: Key Facts and Figures: https://docs.google.com/viewer?
url=http%3A%2F%2Fwww.nacsonline.com%2FNACS%2FResources%2Fcampaigns
%2FGasPrices_2011%2FDocuments%2FGasPriceKit2011.pdf
ANALYSIS OF THE SCOPE OF ENERGY
SUBSIDIES AND SUGGESTIONS
FOR THE G-20 INITIATIVE
http://www.iea.org/weo/docs/G20_Subsidy_Joint_Report.pdf
Nigeria Federal Budget Office for Revenue and Expenditures
http://www.budgetoffice.gov.ng/
Gasoline Prices, OPEC, and Biofuel:
http://www.farmfoundation.org/news/articlefiles/1698-zilberman.pdf
Estimating U.S.Government Subsidies to Energy Sources:
http://www.elistore.org/Data/products/d19_07.pdf
Fuel Subsidy Removal with Onyekachi Ubani: http://www.youtube.com/watch?v=pMD79XImgqo
How Gas Prices Work: http://auto.howstuffworks.com/fuel-efficiency/fuel-
consumption/gas-price.htm
What causes gas prices to rise?
http://curiosity.discovery.com/question/causes-gas-prices-rise
Like or Dislike:  0  0

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