HOW DO WE OPEN THE EYES OF OUR GOVERNORS, THE NASS MEMBERS, THE NLC AND THE MASSES TO UNDERSTAND THAT IT IS TIME TO REMOVE EVERY FORM OF THESE FRAUD LADEN PETROLEUM SUBSIDY SCHEMES AND TOTALLY LIBERALIZE THE DOWNSTREAM OIL AND GAS SECTOR? By Dr. Nnaemeka Onyeka Obiaraeri
HOW DO WE OPEN THE EYES OF OUR GOVERNORS, THE NASS MEMBERS, THE NLC AND THE MASSES TO UNDERSTAND THAT IT IS TIME TO REMOVE EVERY FORM OF THESE FRAUD LADEN PETROLEUM SUBSIDY SCHEMES AND TOTALLY LIBERALIZE THE DOWNSTREAM OIL AND GAS SECTOR?
We need to state the following incontrovertible facts that are not refutable:
1.Continuous retention of the Petroleum consumption subsidies in any kind of forms in Nigeria breeds the vilest forms of corruption, inefficiency and wickedness that benefits only the few facts cats within the corridors of power, while impoverishing majority of Nigerians .
2.Nigeria is the only country within its contiguous neighbourhood sphere that has continued to retain this fraudulent petroleum consumption subsidies schemes that fuels corruption, distorts our economy and funds the consumptions of our neighbours via smuggling.
3.Nigeria is the only country amongst her contiguous neighbouring countries that has deliberately refused to totally liberalize her whole oil and gas value chain, especially, the downstream sector.
4.From 2016 to 2018, over $28billion/N8.7trillion that would have gone into the federation account was misappropriated /squandered through the following means:
(a) By way of phantom/ghost fuel import bills of $14.5billion/N4.4trillion (magical increase in Nigeria’s average daily fuel consumption from 28m-35million liters per day to 56m to 70million liters since 2016;
(b): N3.6trillion squandered by ways of subsidies payment on these ghost portions of our imported petroleum products product of over the last 47 months;
(C.) $389million /N118billion wasted in the Fruitless Turn Around Maintenance Programs of the moribund refineries without any success;
(d) N550billion incurred losses by the NNPC running and managing this moribund refineries.
(e). this cumulative and staggering N8.7trillion would have entered into the Federation account and used to build up our nation.
5.Over 50% of the volume of fuel consumed in Nigeria takes place in Lagos state alone. Over 50% of the consumption subsidies on petroleum products are used to fund economic activities in Lagos state, who enjoy the tax benefits of these economic activities alone.
6.This cumulative N8.7trillion that was wasted, misappropriated and squandered from 2016 to 2018 in bogus and fraud laden consumption subsidies regimes and ghost fuel importations would have been paid into the federation account and shared amongst the three tiers of government. My state Imo state and the other 35 states under a fully liberalized regime in the downstream and gas oil and gas sector would have received at least N100billion each as additional revenues from FAAC and JAAC.
It is the height of ignorance, laziness, and lack of creativity for the Governors, members of NASS, the NLC, and other stakeholders in Nigeria to continue to accommodate this massive heist taking place in our oil and gas sector under the pretence that the full liberalization of the downstream oil and gas sector will impoverish Nigerians the more. FAT LIES.
SUGGESTED SOLUTIONS ON HOW WE CAN EXECUTE THIS SCHEME WITHOUT IMPOVERISHING THE MASSES OR ALLOWING THE PUBLIC SECTOR PLAYERS TO LOOT THE EXCESS REVENUES THEY WILL BE RECEIVING AFTER FULL DEREGULATIONS;
1. The Governors, (if they are sincere) under the aegis of the Nigeria Governors’ Forum can engage creative financial engineers/consultant to help them design /structure a robust PPP driven implementation schemes on how they can apply/utilize of the excess revenues they shall be receiving after full deregulation to provide sustainable palliatives for their citizens. (We are ready to provide such creative consultancy services to them)
2. Remember that under a fully deregulated downstream oil and gas operations, each state and their LGAs shall receive as much as N30billion annually in excess revenues that would have been looted through Ponzi/ghost daily fuel importation volume of 60m liters/subsidy scams.
One of such Palliative measures each governor can embark upon will be to go into PPP arrangement with reputable transport operators to purchase 540 units of brand new 18 seater buses at a cost of not more than N7billion. Also acquire 100 units of long haul wide body buses at not more than N2.17billion and 100 units of haulage trucks at not more than N2billion.
3. The total cost of maintaining these 700 vehicles in each state will not be more than N800million per annum. The total cost of fuelling these 700 vehicles per annum in each state even if the pump price of the pms jumps up to N250/liter after removal of subsidies will not be more than N5.1billion.
Add up these amounts of creating and maintaining these vehicles and you will get N17billion. This is by far less the average excess revenues of at least N30billion that would have come/accrued to each of these states every year from the removal of the subsidies regime.
4. The balance N13billion from this excess revenues can be applied to massively develop on annual bases at least 500km rural roads in each of these states using the Israeli Enzyme based Aggrebind Road Construction Technology across the whole landscape or be applied to develop cottage agriculture farm gates and cottage agro-processing factories under robust PPP frameworks.
5. For enhanced transparency, these excess funds can be warehoused and managed by a licensed private sector trustee or asset managers to give everyone added comfort. This is to avoid criminal minded folks in the public sector from diverting it the way bailout funds released by the FGN was diverted in 2016.
The buses to be purchased and managed under very transparent PPP schemes shall be deployed under such a metered/digital arrangement that will make qualifying indigenes of each of these states to enjoy public transport services at fares that is even slightly less than what they are paying now.
Imagine the positive palliative impact on the lives of the average Nigerian if over 25,900 brand new units of various range of buses, trucks and articulated vehicles fully maintained and fuelled with excess revenues that would have been lost to few greedy fat cats hiding under the bogus subsidy games are released into the public transport system.
Imagine the palliative impacts of having over 18,500 kilometres of brand new rural roads built across the landscape of Nigeria annually?
Imagine the aggregated earning boosting, job creating and poverty alleviating positive impact it will have for us to create over 7,400 cottage agro processing factories and farm gates across Nigeria deploying this excess funds that hitherto were not paid into the federation accounts(we shall have over 500,000 brand new jobs under this arrangement that will grow incrementally.
Finally, full liberalization of the downstream oil and gas sector, privatization of the moribund refineries, unbundling of the NNPC, removal of all manner of consumption subsidies in the downstream oil and gas sector, will spur massive new investments into that sector, remove the rug from under the feet of the few looting fat cats in that sector, eliminate the huge arbitrage incentives for smugglers, lead to emergence of new modular refineries and optimization of revenues available to Nigeria/Nigerians .
Please help us to share this piece to the NLC, your NASS representative and governor. We cannot continue to subsidize criminality, bad behaviours, inefficiencies and destruction of Nigeria.
Let’s join hand to put an end to this rot before June 30, 2019.
God help us
Dr Nnaemeka Onyeka Obiaraeri, FICA, MIRA
09090900989. Info@sefapcol.com
We need to state the following incontrovertible facts that are not refutable:
1.Continuous retention of the Petroleum consumption subsidies in any kind of forms in Nigeria breeds the vilest forms of corruption, inefficiency and wickedness that benefits only the few facts cats within the corridors of power, while impoverishing majority of Nigerians .
2.Nigeria is the only country within its contiguous neighbourhood sphere that has continued to retain this fraudulent petroleum consumption subsidies schemes that fuels corruption, distorts our economy and funds the consumptions of our neighbours via smuggling.
3.Nigeria is the only country amongst her contiguous neighbouring countries that has deliberately refused to totally liberalize her whole oil and gas value chain, especially, the downstream sector.
4.From 2016 to 2018, over $28billion/N8.7trillion that would have gone into the federation account was misappropriated /squandered through the following means:
(a) By way of phantom/ghost fuel import bills of $14.5billion/N4.4trillion (magical increase in Nigeria’s average daily fuel consumption from 28m-35million liters per day to 56m to 70million liters since 2016;
(b): N3.6trillion squandered by ways of subsidies payment on these ghost portions of our imported petroleum products product of over the last 47 months;
(C.) $389million /N118billion wasted in the Fruitless Turn Around Maintenance Programs of the moribund refineries without any success;
(d) N550billion incurred losses by the NNPC running and managing this moribund refineries.
(e). this cumulative and staggering N8.7trillion would have entered into the Federation account and used to build up our nation.
5.Over 50% of the volume of fuel consumed in Nigeria takes place in Lagos state alone. Over 50% of the consumption subsidies on petroleum products are used to fund economic activities in Lagos state, who enjoy the tax benefits of these economic activities alone.
6.This cumulative N8.7trillion that was wasted, misappropriated and squandered from 2016 to 2018 in bogus and fraud laden consumption subsidies regimes and ghost fuel importations would have been paid into the federation account and shared amongst the three tiers of government. My state Imo state and the other 35 states under a fully liberalized regime in the downstream and gas oil and gas sector would have received at least N100billion each as additional revenues from FAAC and JAAC.
It is the height of ignorance, laziness, and lack of creativity for the Governors, members of NASS, the NLC, and other stakeholders in Nigeria to continue to accommodate this massive heist taking place in our oil and gas sector under the pretence that the full liberalization of the downstream oil and gas sector will impoverish Nigerians the more. FAT LIES.
SUGGESTED SOLUTIONS ON HOW WE CAN EXECUTE THIS SCHEME WITHOUT IMPOVERISHING THE MASSES OR ALLOWING THE PUBLIC SECTOR PLAYERS TO LOOT THE EXCESS REVENUES THEY WILL BE RECEIVING AFTER FULL DEREGULATIONS;
1. The Governors, (if they are sincere) under the aegis of the Nigeria Governors’ Forum can engage creative financial engineers/consultant to help them design /structure a robust PPP driven implementation schemes on how they can apply/utilize of the excess revenues they shall be receiving after full deregulation to provide sustainable palliatives for their citizens. (We are ready to provide such creative consultancy services to them)
2. Remember that under a fully deregulated downstream oil and gas operations, each state and their LGAs shall receive as much as N30billion annually in excess revenues that would have been looted through Ponzi/ghost daily fuel importation volume of 60m liters/subsidy scams.
One of such Palliative measures each governor can embark upon will be to go into PPP arrangement with reputable transport operators to purchase 540 units of brand new 18 seater buses at a cost of not more than N7billion. Also acquire 100 units of long haul wide body buses at not more than N2.17billion and 100 units of haulage trucks at not more than N2billion.
3. The total cost of maintaining these 700 vehicles in each state will not be more than N800million per annum. The total cost of fuelling these 700 vehicles per annum in each state even if the pump price of the pms jumps up to N250/liter after removal of subsidies will not be more than N5.1billion.
Add up these amounts of creating and maintaining these vehicles and you will get N17billion. This is by far less the average excess revenues of at least N30billion that would have come/accrued to each of these states every year from the removal of the subsidies regime.
4. The balance N13billion from this excess revenues can be applied to massively develop on annual bases at least 500km rural roads in each of these states using the Israeli Enzyme based Aggrebind Road Construction Technology across the whole landscape or be applied to develop cottage agriculture farm gates and cottage agro-processing factories under robust PPP frameworks.
5. For enhanced transparency, these excess funds can be warehoused and managed by a licensed private sector trustee or asset managers to give everyone added comfort. This is to avoid criminal minded folks in the public sector from diverting it the way bailout funds released by the FGN was diverted in 2016.
The buses to be purchased and managed under very transparent PPP schemes shall be deployed under such a metered/digital arrangement that will make qualifying indigenes of each of these states to enjoy public transport services at fares that is even slightly less than what they are paying now.
Imagine the positive palliative impact on the lives of the average Nigerian if over 25,900 brand new units of various range of buses, trucks and articulated vehicles fully maintained and fuelled with excess revenues that would have been lost to few greedy fat cats hiding under the bogus subsidy games are released into the public transport system.
Imagine the palliative impacts of having over 18,500 kilometres of brand new rural roads built across the landscape of Nigeria annually?
Imagine the aggregated earning boosting, job creating and poverty alleviating positive impact it will have for us to create over 7,400 cottage agro processing factories and farm gates across Nigeria deploying this excess funds that hitherto were not paid into the federation accounts(we shall have over 500,000 brand new jobs under this arrangement that will grow incrementally.
Finally, full liberalization of the downstream oil and gas sector, privatization of the moribund refineries, unbundling of the NNPC, removal of all manner of consumption subsidies in the downstream oil and gas sector, will spur massive new investments into that sector, remove the rug from under the feet of the few looting fat cats in that sector, eliminate the huge arbitrage incentives for smugglers, lead to emergence of new modular refineries and optimization of revenues available to Nigeria/Nigerians .
Please help us to share this piece to the NLC, your NASS representative and governor. We cannot continue to subsidize criminality, bad behaviours, inefficiencies and destruction of Nigeria.
Let’s join hand to put an end to this rot before June 30, 2019.
God help us
Dr Nnaemeka Onyeka Obiaraeri, FICA, MIRA
09090900989. Info@sefapcol.com
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