A one time petroleum minister during Ibrahim Babangida's military regime, Prof Tam David West breaks down his analysis of the falsehood behind the fuel subsidy that has only enriched a few rich and selfish individuals in Nigeria. See insightful details.
1) One barrel of Crude oil = 42 gallons 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
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
N95/N85 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.
