Nnaemeka Onyeka Obiaraeri.
It is only a retrograde country, governed by mostly incompetent/ unthinking folks, who are worshipped and defended by mostly ignorant folks , that will continue to stubbornly /criminally subsidize petroleum consumption /import , when all their poorer neighbours have fully deregulated their downstream oil and gas sector and removed subsidy and still expect to put a final stop to smuggling through border closure.
It is the continued retention and perpetuation of these Ill advised economy destroying policies, that are supported by some ignorant folks, that have contributed immensely to the deepening poverty and very slow economic growth in Nigeria.
It is not lack of political will that has made those in power to retain and keep this petroleum consumption subsidies. It is not lack of political will that has stopped them from totally liberalizing the Down Stream oil and gas sector and privatizing the moribund and huge loss making Refineries .
The major motivation for retaining and pursuing this poverty deepening and economy destroying programs is because it offers them the opacity and unaccountable /non transparent avenues to loot, misappriopriate and waste our commonwealth without trace and track.
The other day, PPPRA came up with a report that closure of the border resulted in 10m liters drop in daily consumption of the pms in Nigeria. The ignorant herds clapped and said yes, we are winning. Winning how ? For how long will you continue to consume opium or marijuana as temporary relieve from the pains of a terminal illness instead of seeking for permanent cure?
They never bothered to interrogate the report and ask pertinent questions… 10million litres means 303 units of big 33,000 liters capacity trucks.
Nigeria daily PMS consumption is not more than 35m liters a day max . It hovers between 28m to 32m liters. Yet, we are being told by the NNPC that we import/consume an average of 60m of the PMS per day.
That simply means that over 25m liters of the pms are either smuggled or not actually imported , but the funds cornered by some fat cats in Abuja.
Let’s even assume that they did not loot any part of these monies claimed to have been used to import the 60m liters of the pms everyday. This means that we have excess daily import volume of 25million liters. This volume will require about 757 trucks of 33,000 liters capacity or 555 trucks of 45,000 liters capacity to truck, move and ferry the products accross the border.
Now the big question begging for answer is… how can 303 trucks or 555 trucks or 757 trucks daily pass through our borders to Neigbouring countries without the mass of corrupt uniformed thugs, we call Customs officials not being able to detect and stop it if they are not the coordinators of this smuggling ring?
What are the roles of the Army, DSS and other security officials in this whole sordid mess?
It is the same criminal ring in the border security network that is responsible for the rice smuggling ring from Benin Republic.
In 2018, Benin Republic imported over 1.69billion kg /1.69m tons or 33.8million 50kg bags of rice from Thailand, which ofcourse has its final destination as Nigeria.
To smuggle that bulk of rice into Nigeria will require between 56,333 -112,666units of long trailers per annum or 154 to 308 long haul trailer trucks crossing our land borders daily. So where were the customs officials and other security agencies at the border posts, as these trucks passed into Nigeria daily? Where are the intelligence and surveillance units?
How can over 1000 large trucks smuggle rice and petroleum products both ways across the Nigerian border without the security agencies knowing about it ? Please let’s stop fooling ourselves in this country.
We must either agree today to build a country that vests all of us with honest and all inclusive prosperity, or continue to nurture her as criminal jungle, where the hyenas and jackals prey on the rest while the elected/appointed authorities chase shadows. We can stop these elitist gansterism against the poor masses in Nigeria and the rape of our economy without shutting down our land borders for a day if we are collectively honest and sincere. We have preferred pragmatic and foolproof solutions. Let them implement it .
If we needed to shut the borders to stop this mass smuggling of the pms , why do we still waste taxpayers monies retaining the services of these vastly corrupt and incompetent folks? Why not adopt the modified Georgian Cleansing model and other creative reform solutions we have long advocated for our dear Nigeria?
From Niger to Chad , to Benin Republic, to Cameroon , to Togo to Liberia, to Burkina Faso to Ivory Coast to Ghana, their downstream oil and gas sectors are fully liberalized and consumption subsidies removed.
The average cost of a liter of petroleum products in those countries range from N301 to N540. Thus, the incentives for most of these criminally compromised uniformed thugs, we employed to guard our border posts to connive with some of the dubious government officials, petroleum marketers, truck owners etc who buy this product at the subsidised rate of N117.68 per liter from the PPMC and kite it over the border for a huge haul of over 100% return on investment while sabotaging our economy are quite huge and irresistible.
Interestingly, based on global pricing variables, the average price of a liter of the pms is so high in these other countries because they do not have the kind of private sector led large economy of scale downstream oil and gas purchases, logistics, storage and distribution infrastructure and facilities we have in Nigeria. If they do, the prices will crash in their markets.
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Even with the border closure, based on the report of a member of the national assembly representing Katsina state, these illicit activities still take place at night. These conniving men of the underworld paid with our taxpayers’ money still engage in these criminal trades.
SOLUTIONS… The only lasting, sustainable and one fit all solutions to this seemingly intractable economic challenge is to totally liberalize the downstream oil and gas operation, remove all consumption subsidies and totally privatise the refineries and the whole downstream oil and gas assets being controlled by the inefficient public sector.
By doing this, and executing some of the sustained palliative measures and schemes we advocated, Nigeria within the next 2 years will be able to refine all her white petroleum consumption needs and still export the excess to Neigbouring West African countries.
The economics and competitive advantages of setting up and operating refineries in a fully deregulated Nigeria market, looking at the vast contiguous 600m population markets around us , leveraging on the ACTFA are quite tantalizing if only we have visionary, creative thinking , selfless and sincere folks leading us .
In a fully deregulated Nigeria downstream oil and gas market, the prices of a liter of the pms will spike up by about 20 to 30% in the short run. But in the very medium to long run… 2 years, we shall see a liter of the pms sell for less than N145 per liter and then have a vast Sub Sahara Africa market to sell our excess refined product to as we achieve domestic refining self sufficiency.
We shall also be having other refined petroleum by products that we can use in other industries when we refine our crude oil domestically.
We shall retain the jobs that we export when we import consumption goods that we can conveniently produce here.
Waiting for Aliko Dangote to finish his refineries in 2023/2024 before full deregulation, will only end up creating a monopolist that will exploit the system and not force the price of the commodity down.
We all see what is happening in the cement industry today where Dangote has near-monopoly. The average price of a 50kg bag of cement around the world is $ 3.5, but in Nigeria it is over $7. Yet we have huge 20million housing deficit, valued at over N110trillion to cover.
Can’t we see the mega revolution taking place in the telecommunicaton industry with 4 strong and capable competitors /players and other smaller ones play competitively in that field?
Please what can we do to make these our maximum rulers and their vast ignorant vuvuzellas to embrace common sense and problem solving economics? It is well .