Nollywood Hardtalk | 3 January 2012 20:49 CET

FGN Pure scam in disguise

Source: Adetokunbo Adedayo Onasanya/

The Federal Government has said that it spends N1.3 trillion Naira annually on fuel subsidies. One is obliged to ask: How much does it to cost to build new refineries or repair and bring the existing ones to full production, in order to avert impending hardship that will be inflicted on Nigerians when petroleum products are no longer subsidized?

Astonishingly, the federal government, under Jonathan, seems to ignore the spiral inflation that that single act will cause on the already impoverished population, with low income, as well as the Naira that has lost much of its value at the international exchange.

If the president doesn't understand the woes that will follow the fuel subsidy removal, then one can reasonably affirm that he does not have the welfare of the masses at heart. This is because the resulting high cost of fuel will be felt on all sectors of the economy - transportation fare, housing, foodstuff, school fees.

Those in the various arms of the governement who earn millions of Naira a month plus allowances that run also in millions will never feel the bites even if 1 liter of petrol costs N500. Yet, those are the very people who should think of the global impact of fuel subsidy removal on the minimum wage-earners - workers who take home N18'000 per month to feed the family, pay rent and discharge other recurrent obligations. The presidency and the legislature won't understand this because their revenue situation is impermeable to inflation.

I hope that President Jonathan understands that by removing the fuel subsidy, the fresh air he promised during his election campaigns has turned sour. This could be the last straw in a country where the security situation is grim. When, in the coming days, the impact of hyper inflation begins to be felt all over the country, the president will understand that he has scored yet another low mark, as he globally has, so far.

Verified Analysis

1) One barrel of Crude oil = 42gallons or 159 litres

... 2) Our Refineries (i.e 4) Installed (combined) capacity = 445,000 ... ... barrels per day

3) Actual refineries capacity due to ageing equipment = 30% i.e. 133,500 barrels per day

4) . . 133,500 barrels = 21.2 million litres

5) Local required consumption (F.O.S) = 12millions litres

6) It means that even our MORIBOND refineries can actually meet our local consumption need of petroleum.

7) The cost structure of crude oil (i.e. Qua Iboe Crude Oil) production; - Findings / development - $3.5 - Production cost - $1.5 - Refining Cost - $12.6 - Pipeline/transportation - $1.5 - Distr/bridging fund Margin -$15.69

8) True cost of one litre of petroleum anywhere in Nigeria; - Total sum cost = $34.8 - 1ltr cost = $34.8/159 litres = $0.219 - Naira equiv. 0.219xN160= N35.02k - Add Tax N5 + N35.02 = N40.02

9) Let FGN refute the above composition and if not, they should tell us how they came about N65/litre.

10) Locally refined products cannot be sold at International price.

11) We really do not need FGN SUBSIDY as there was NONE in the first place.

12) What is LACKING, is the WILL to enforce LAW ON CORRUPTION.

Pls re-post until it gets to the right quarters for their response;

its glaring that the decision of interanational puppet, GEJ does not meet the support of the masses that constitutes more than 90% of nigerians but the question remain who are trust worth & dependable to fight for the masses, NLUC or TUC? Nigerians must strugle for our right, ourselves.

The masses should not hold their peace until FG reverse d situation. Their ar serious issues that need serious attention and not fuel subsidy. If FG wants to cut spending down,it should start from themselves.come to think of it,senators which are not even up to 1% of d entire Nigeria population, taking 25% of Nigeria budget. The government of the western world which we ar imitating will never be this selfish.

We still stand a chance as a COUNTRY.

Analysis done by Professor Tam David West, former Petroleum Minister.

Writen by Adetokunbo Adedayo Onasanya for

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