Facts You Must Know About Subsidy Made Simple (SMS)

1) .Definition:To subsidize is to sell a product below the cost of production. Since the federal government has been secretive about the state

of our refineries and their production capacity, we will focus on importation rather than production. So, in essence, within the Nigerian Fuel Subsidy context, to subsidise is to sell petrol below the cost of importation.

2) THE UNSUBSTANTIATED CLAIMS OF THE FEDERAL GOVERNMENT

The Nigerian government claims that Nigerians consume 34 million litres of petrol per day. The government has also said publicly that N141 per litre is the unsubsidised pump price of petrol imported into Nigeria. (N131.70 kobo being the landing price and N9.30 kobo being profit.)

3) ANNUAL COST OF IMPORTATION

Daily Fuel Consumption: ​​34 million litres
Cost at Pump: ​​​​N141.00
No. of days in a regular year: ​​365 days
Total cost of all petrol imported yearly into Nigeria:


Litres Naira Days
34m x 141 x 365

= N1.75 trillion

4) COST BORNE BY THE CONSUMERS

Nigerians have been paying N65 per litre for fuel, haven’t we? Therefore, cost borne by the consumers =

Litres Naira Days
34m x 65 x 365 = N807 billion

5) COST OF SUBSIDY BORNE BY THE GOVERNMENT

In 2011 alone, government claimed to have spent N1.3 trillion by October – the bill for the full year, assuming a constant rate of consumption is N1.56 trillion.

Consequently, the true cost of subsidy borne by the government is:
Total cost of importation minus total borne by consumers, i.e. N1.75 trillion minus N807 billion = N943 billion.

Unexplainable difference: N617 billion

The federal government of Nigeria cannot explain the difference between the amount actually disbursed for subsidy and the cost borne by Nigerians (N1.56 trillion minus N943 billion = N617 billion).

6) BOGUS CLAIM BY THE GOVERNMENT

A government official has claimed that the shortfall of N617 billion is what goes to subsidising our neighbours through smuggling. This is pathetic. But let us assume (assumption being the lowest level of knowledge) that the government is unable to protect our borders and checkmate the brisk smuggling going on. Even then, the figures still don’t add up. This is because even if 50% of the petrol consumed in each of our neighbouring countries is illegally exported from Nigeria, the figures are still inaccurate. Why?

WORLD BANK’S FIGURES: POPULATIONS OF WEST AFRICAN COUNTRIES

NIGERIA:​​158.4 million

BENIN:​​8.8 million

TOGO:​​6 million

CAMEROUN:​19.2 million

NIGER:​​15.5 million

CHAD:​​11.2 million

GHANA:​​24.4 million

The total population of all our six (6) neighbours is 85.5 million.

Let’s do some more arithmetic:

a) Rate of Petrol Consumption in Nigeria: Total consumed divided by total population:

34 million litres divided by 158.8 million people = 0.21 litres per person per day.

b). Rate of Petrol Consumption in all our 6 neighbouring countries, assumed to be the same as Nigeria: 0.2 litres x 85.5 million people = 18.35 million litres per day

Now, if we assume that 50% of the petrol consumed in all the six neighbouring countries comes from Nigeria, this value come to 9.18 million litres per day.

1) PATHETIC ABSURDITY

There are two illogicalities flowing from this smuggling saga.

a) If 9.18 million litres of petrol is truly smuggled out of our borders per day, then ours is the most porous nation in the word. This is why: The biggest fuel tankers in Nigeria have a capacity of about 36,000 litres. To smuggle 9.18 million litres of fuel, you need 254 trucks. What our government is telling us is that 254 huge tankers pass through our borders every day and they cannot do anything about it. This is not just acute     incompetence, but also a serious security challenge. For if the government cannot stop 254 tanker trailers from crossing the border daily, how can they stop importation of weapons or even invasion by a foreign country?

b)2nd illogicality: Even if we believe the government and assume that about 9.18 million litres is actually taken to our neighbours by way of smuggling every day, and all this is subsidised by the Nigerian government, the figures being touted as subsidy still don’t add up. This is why:

Difference between pump price before and after subsidy removal = N141.00 – N65.00 = N76.00

Total spent on subsidizing petrol to our neighbours annually = N76.00 x 9.18 million litres x 365 days = N255 billion

If you take the N255 billion away from the N617 billion shortfall that the government cannot explain, there is still a shortfall of N362 billion. The government still needs to tell us what/who is eating up this N362 billion ($2.26 billion USD).

1) ILLOGICAL ASSUMPTIONS


i) We have assumed that there are no working refineries in Nigeria and so no local petrol production whatsoever – yet, there is, even if the refineries are working below capacity.

ii) Nigeria actually consumes 34 million litres of petrol per day. Most experts disagree and give a figure between 20 and 25 million litres per day. Yet there is still an unexplainable shortfall even if we use the exaggerated figure of the government.

iii) Ghana, Togo, Benin, Cameroun, Niger, and Chad all consume the same rate as Nigeria and get 50% of their petrol illegally from Nigeria through smuggling.

These figures simply show the incompetence and insincerity of our government officials. This is pure banditry.

1) FACT 9: The simplest part of the fuel subsidy arithmetic will reveal one startling fact: That the government does not need to subsidise our petrol at all if we reject corruption and sleaze as a way of life. Check this out:

a)NNPC crude oil allocation for local consumption = 400,000 barrels per day (from a total of 2.450 million barrels per day).

b)If our refineries work at just 30%, 280,000 barrels can be sold on the international market, leaving the rest for local production.

c)Money accruing to the federal government through NNPC on the sale, using $80/bbl – a conservative figure as against the current price of $100/bbl – would be $22.4m per day. Annually this translates to $8.176bn or N1.3 trillion.





d)The government does not need to subsidise our petrol imports - at leastnot from the Federation Account. The same crude that should have been refined by NNPC is simply sold on the international market (since our refineries barely work) and the money is used to buy petrol. The 400,000 barrels per day given to NNPC for local consumption can either be refined by NNPC or sold to pay for imports. This absurdity called subsidy should be funded with this money, not the regular FGN budget.

If the FGN uses it regular budget for subsidising petrol, then what happens to the crude oil given to NNPC for local refining that gets sold on the international market?

1)TACTICAL BLUNDER

The federal government is making the deregulation issue a revenue problem. Nigerians are not against deregulation. We have seen deregulation in the telecom sector and Nigerians are better for it, as even the poor have access to telephones now right before the eyes of those who think it is not for them. What is happening presently is not deregulation but an all-time high fuel pump increase, unprecedented in the history of our nation by a government that has gone broke due to excessive and reckless spending largely on themselves. If the excesses of all the three tiers of government are seriously curbed, that would free enough money for infrastructural development without unduly punishing the poor citizens of this country.

Let me just cite, in closing, the example of National Assembly excesses and misplaced spending as contained in the 2012 budget proposal:

1. Number of Senators​​​​​​109

2. Number of Members of the House of Representatives​​360

3. Total Number of Legislators​​​​​469
4. 2012 Budget Proposal for the National Assembly ​​N150 billion

5. Average Cost of Maintaining Each Member​​​N320 million

6.Average Cost of Maintaining Each Member in USD​​$2.1 million/year

Time has come for the citizens of this country to hold the government accountable and demand the prosecution of those bleeding our nation to death. Until this government downsizes, cuts down its profligacy and leads by example in modesty and moderation, the poor people of this country will not and must not subsidise the excesses of the oil sector fat cats and the immorality cum fiscal scandal of the self-centred and indulgent lifestyles of those in government.

Here is a hidden treasure of wisdom for those in power while there is still time to make amends:

PROVERBS 21:6&7

“Getting treasures by a lying tongue is the fleeting fantasy of those who seek death. The violence of the wicked will destroy them because they refuse to do just.”

A word of counsel for those who voted for such soulishly indulgent leadership:

“Never trust a man who once had no shoes, or you may end up losing your legs.”

This is the conclusion of the matter on subsidy removal:

1. “If a ruler pays attention to lies, all his servants become wicked.”(Proverbs 29:12) 2.“The Righteous God wisely considers the house of the wicked, overthrowing the wicked for their wickedness. Whoever shuts his ears to the cry of the poor will also cry himself and will not be heard.” (Proverbs 21:12&13) Thanks for your attention. God bless you all. Pastor ‘Tunde Bakare Sunday, January 15, 2012

PRESS RELEASE The Good people of Nigeria. The Nigerian Bar Association Ikeja Branch strongly and unequivocally disassociates itself from the recent announcement of the suspension and truncation of the protest and strike of the Nigerian people against the hike in fuel price by the NLC/TUC. Even before Monday, the 9th day of January 2012, the Ikeja Bar had started a campaign against the said hike in line with the directives of the National Executive Committee meeting of the NBA held at Eket in November 2011. From the 9th till today the 16th January 2012, the Ikeja Bar was in the forefront of the protest against the fuel price hike using the platform of the organised labour as well as that of the Civil Society Group whilst not losing our lawyers identity. Much to our chagrin, grave disappointment and unimaginable shock, labour which had appeared seemingly resolute in the stand against the hike in fuel price suddenly capitulated, dramatically somersaulted and shamelessly backpedalled on the very popular stand that the pump price of PMS remains N65. We make bold to say that the announcement by Labour that it has accepted the N97 per litre price of PMS as unilaterally fixed by the repressive Federal Government of Dr Jonathan is completely unacceptable to us. We consider the acceptance by Labour to be a betrayal of the masses of Nigerian people and an unholy compromise of the sovereignty of the people of Nigeria with a Government that has shown gross insensitivity to their needs, demands and yearnings. Our position on this matter is that the Nigerian masses should ignore Labour and continue their peaceful opposition to the increase in the pump price of PMS. We have said it before that Government cannot be above the Governed since the former is the servant of the latter and the vast majority of the Nigerian people after listening to all manners of argument on the issue have remained resolute that pump price should remain at N65. We call on all other professional groups whether blue collar or white collar to join us in continuing the peaceful protest and resistance to the increase in pump price. Nigeria belongs to all of us and not only to the cabal and their cohorts in Government who believe that they have a monopoly of wisdom and are the Encyclopedia of knowledge. The blockade, the invasion and unlawful occupation of the Gani Fawehinmi Freedom Square Ojota and several parts of Lagos like Yaba, Ojuelegba, Palmgrove, Anthony and Maryland by millitary personnels and other security forces is unconstitutional, oppressive, obnoxious, abuse of power, reckless, provacative and a disturbing throw back to the fascism of the millitary years. Likewise, the tear gassing of our colleagues, Bamidele Aturu, Ebun Adegboruwa and other citizens this morning whilst in a peaceful procession along Ikorodu Road as well as the prevention of Femi Falana from accessing Gani Fawehinmi Park Ojota and the NLC Secretariat, Yaba by the military is equally unconstitutional and condemnable. Nigerains have a right to go to every part of Nigeria in peaceful assembly and without participation in any criminality. Both Sections 40 and 41 of the Nigerian Constitution 1999 supports this contention. Finally, our passionate appeal is that the protest against increase in pump price MUST continue. N65 or nothing! DATED THIS 16TH DAY OF JANUARY 2012. ADEBAMIGBE OMOLE.                                                 ADESINA OGUNLANA (CHAIRMAN).                                                               (GENERAL SECRETARY)

Two rescued passengers were South Koreans on their honeymoon

Rescuers reached two trapped honeymooners in the interior of a cruise ship more than 24 hours after it ran aground off a picturesque Italian island, killing three people, injuring 20 and leaving dozens unaccounted for.The South Korean passengers, each 29, heard searchers calling out on the Costa Concordia, Italy's ANSA news agency reported early Sunday. They were located in a cabin and taken ashore. Video showed them being taken to a waiting ambulance.

The captain of the ill-fated vessel, which turned over on its side after the grounding, was arrested late Saturday and was being investigated for abandoning ship and manslaughter, a local prosecutor said.

With perhaps up to 50 people unaccounted for, divers suspended their efforts at dark, with plans to resume the search in the azure waters off the island of Giglio at dawn Sunday.

Accounts of the chaos from many of the 3,200 passengers were reminiscent of a maritime disaster 100 years ago this April -- the loss of the RMS Titanic.

"For me, the worst part of the whole ordeal" was when a lifeboat crew member told those boarding that it was "women and children first," said passenger Benji Smith of Boston.



"All these families who were clinging to each other had to be separated," Smith told CNN.

Some passengers fell into the chilly waters during the rescue, ANSA reported.

Questions abounded: Why was the colossal ship so close to the shore? How fast was it moving? How well did the crew respond? According to many passengers, the evacuation was disorganized and no one seemed in charge.

"Every crew member who walked past shouted instructions, but the instructions contradicted each other," Smith said.

Concordia's captain, Francesco Schettino, was interviewed earlier Saturday about what happened when the ship struck rocks in shallow water off Italy's western coast Friday evening, said officer Emilio Del Santo of the Coastal Authorities of Livorno. Local fishermen say the island coast of Giglio is known for its rocky sea floor.

Schettino said "that rock was not indicated on the chart," according to ANSA. "Me and the crew, we were the last to abandon ship," he said.

The ship was 2.5 miles off route when it struck the rocky sandbar.

"There are rocks, they are on the maps," said Capt. Cosimo Nicastro of the Italian Coast Guard. "What we know is the ship went really close to these rocks. ... We don't yet know why."

The ship began taking on water Friday evening and the crew kept going because they believed the vessel could normally keep sailing, Nicastro said. Realizing there was a significant safety problem, the commander steered the Costa Concordia closer toward port.

Authorities also were looking at why the ship didn't hail a mayday during the accident.

"At the moment we can't exclude that the ship had some kind of technical problem, and for this reason moved towards the coast in order to save the passengers, the crew and the ship. But they didn't send a mayday. The ship got in contact with us once the evacuation procedures were already ongoing," Del Santo said prior to the announcement of the captain's arrest.

Giuseppe Orsina, a spokesman with the local civil protection agency, said 43 to 51 people were missing, though authorities are reviewing passenger lists to confirm the exact figure.



"These people could be still on the island of Giglio, in private houses or in hospitals," Orsina said.

Two French tourists and a crew member from Peru were killed, Port authorities in Livorno said. One of the victims was a 65-year-old woman who died of a heart attack, according to authorities.

Nautilus International, a maritime employees trade union, called the accident a "wake-up call" to regulators.

"Nautilus is concerned about the rapid recent increases in the size of passenger ships -- with the average tonnage doubling over the past decade," said Nautilus general secretary Mark Dickinson in a statement. "Many ships are now effectively small towns at sea, and the sheer number of people onboard raises serious questions about evacuation."

Gianni Onorato, president of Genoa-based Costa Cruises, expressed "deep sorrow for this terrible tragedy," but said the cruise line was unable to answer all the questions that authorities are now investigating.

The vessel, plying the waters from Civitavecchia to Savona, Italy, struck a submerged rock, Onorato said in a statement before the announcement of the captain's arrest.

"Captain Schettino, who was on the bridge at the time, immediately understood the severity of the situation and performed a maneuver intended to protect both guests and crew, and initiated security procedures to prepare for an eventual ship evacuation," he continued. "Unfortunately, that operation was complicated by a sudden tilting of the ship that made disembarkation difficult," Onorato said.

Rosalyn Rincon, a member of the cruise ship staff, said the captain told passengers there was an "electrical problem."

Concordia was carrying about 3,200 passengers and 1,000 crew members when it ran aground.

"I'm not surprised that it (the ship) would wind up tipping like this," said Neil Gallagher, professor of naval architecture at the Webb Institute on Long Island, New York. "Something had to go wrong with either the controls or the navigation to get it to this condition."

Chris B. McKesson, adjunct professor of naval architecture at the School of Naval Architecture and Marine Engineering at the University of New Orleans, said, "from the size of the gash, she must have been steaming at a pretty good pace."

Fear and panic aboard crippled ship

Panic spread as people scrambled to find lifeboats in the dark as the ship quickly leaned to one side late Friday. Access to some lifeboats was hampered by the ship's tilt into the water.

With the ship's staircases flooded, Smith and others made rope ladders to climb from the outer fourth deck to the third. They were eventually rescued more than three hours later by a lifeboat that had returned from dropping passengers ashore.

At least three lifeboats, each with a capacity of more than 100 people, apparently malfunctioned due to technical or crew error, Smith said. "The people manning these boats were just cooks and shopkeepers," Smith said.

Cmdr. Buddy Reams, chief of the U.S. Coast Guard's Cruise Ship National Center of Expertise, said, "when it comes to cruise ships, in the event of emergency, cabin stewards or others would have safety roles," he said.

The Coast Guard inspects foreign-flagged cruise ships in U.S. waters twice a year, studying the competency of the crew during fire and abandon-ship drills, Reams said.



Many passengers asked why they had not yet received an obligatory safety briefing when disaster struck around dinner time, only hours into their journey. The timing of the safety briefings and muster drills depend on the length of the cruise, Reams told CNN.

Many of those rescued in the early hours were taken to small churches and other buildings around the island for shelter. Some were still wearing the pajamas and slippers they had on as the ship went down.

Vivian Shafer, a passenger from Maryland, told CNN there was no initial announcement after the vessel began its tilt. Others reported being unable to clearly hear instructions.

Once ashore, no one from the crew assisted them, Shafer said. Rather, it was up to islanders.

"There didn't seem to be anybody in charge," she said.

Costa Cruises, owned by parent company Carnival Corp., said it was focusing on the final stages of the emergency operation and helping passengers and crew return home.

"It is a tragedy that deeply affects our company. Our first thoughts go to the victims and we would like to express our condolences and our closeness to their families and friends," the line said on its website.

The Concordia, built in 2006, was on a Mediterranean cruise from Rome with stops in Savona, Marseille, Barcelona, Palma de Mallorca, Cagliari and Palermo.

Most of the passengers on board were Italian. CNN affiliate America Noticias, in Peru, said a group of 32 Peruvians were also onboard. Brazil's state-run Agencia Brasil said 53 Brazilians were on the cruise ship. An estimated 126 Americans were also on board, according to the U.S. State Department. There were no reports of injured Americans though the U.S. Embassy in Rome said it was unable to account for all U.S. citizens believed to be on board the ship at the time of the accident.

Another Costa ship was involved in a deadly 2010 accident when the Costa Europa crashed into a pier in Egypt's Sharm el-Sheikh during stormy weather, killing three crew members. Honeymooner, if they had know they would have remain in their home. Sha no place save sef.

Breaking news: Meeting Between Nigerian Government And Labour Reps Ends In A Deadlock Again

The meeting between the Nigerian Labour Congress and The TUC on one side and the Jonathan regime on the other ended in another deadlock tonight as labour leaders refused to back down from its earlier position that President Jonathan revert to N65 price for petrol as earlier but the Good News is that there will be another Meeting tomorrow. Let hope something good comes out of it!!! Let #Occupy ASOROCK this time so that they go really feel our MADNESS. Sha they Say Any Man Wey Like SHOE No Get Heart Sef.... No be me talk am o!