NIGERIA…Strike spells doom

Nigeria is Africa’s biggest oil producer, but still imports refined petrol. The country produces about 2.4 million barrels of crude oil daily which is exported to be refined abroad; however due to years of corruption-fueled neglect the domestic refineries are inoperative. As a consequence, Nigeria imports 70% of its gasoline (about 250,000bpd of petroleum products) into the country for sale to its citizens. The price of petrol has increased from 65 naira ($0.40; £0.26) per litre to at least 141 naira in filling stations and from 100 naira to at least 200 naira on the black market, from which many Nigerians buy their fuel.

With the majority of Nigerians living on less than $2 per day, cheap petrol is viewed by many Nigerians as the only tangible benefit they receive from the state, hence the widespread disapproval. In addition, the economy is heavily reliant on crude oil (amongst other reasons, due to absence of essential infrastructure and services such as constant electricity). A consequence of this is that other seemingly unrelated items are tied to the price of fuel as has occurred from previous price hikes. Due to the absence of stable electricity, gasoline generators are a common energy alternative for small businesses and residences.

With each hike, there is a commensurate rise in the cost of production of goods and services which would be transferred on to the consumers, leading to widespread inflation. Unfortunately, even when fuel price hikes were reversed in the past, the increase in the cost of goods and services (inflationary reaction) remained.

The removal of the subsidy took effect from Sunday, 1 January 2012 as announced by the Executive Secretary of the Petroleum Product Pricing Regulatory Agency, PPPRA Reginald Stanley.

I have been a spectator to the Occupy Nigeria protest and its day 6, rest day declared by the NLC and organizers. Nigerians have had a rather sad experience with the government on trust, currently the population of Nigeria stands at 167 million people and majority of them live under the dollar mark, there are no roads, no power, no electricity, no jobs, no good health care, infact there’s nothing in Nigeria that would make you want to spend time here. During elections, Government promises the people of so many things and months, years down the line, nothing has been done in that regard. Now the government has decided to remove the subsidy on fuel making the price of fuel rise as high as N141 per liter, this price increase would automatically mean increase in the price of everything in Nigeria, from price of sachet water to food in the market, to clothes.

Government has given a comprehensive breakdown on cost of managing the economy and the impact of the subsidy on the cost of government. The president said Nigeria pays N1.3 Trillion as subsidy per year, and if this is removed the amount would be put into building infrastructures and maintaining existing ones. But the major question now is, Why remove the subsidy in fuel from the oil sector because you claim there is major corruption in that sector and invest it in another sector where the officials there have anointing for corruption.

The major problem in Nigeria I can say is corruption, if we can successfully tackle corruption, then we can progress as a country, the strike has lasted for 5 days now and the country has lost about N760 Billion. The main problem is the communication gap in carrying out removal, done in the most stupid way and now the impact of the strike now talk of the loss of lives is most felt by all Nigerians.

Government has inaugurated 1600 buses to help the transport sector and I ask for those who have cars how does this help? The prices of goods would not respect the 1600 buses, the prices of clothes would not respect the 1600 buses. I wonder why this subsidy was not done in phases, with removal of N20 after every 6 months, then put the revenue gotten into repairing roads and building factories. Nigerians have heard too many promises, it’s time we see some actions. Only a few Nigerians have hijacked this economy, enriching themselves with the subsidy grants, expanding their portfolios and diversifying into other business, they live big lives, buying properties in high braw areas etc.

I got a mail from a friend detailing all companies in the downstream sector and construction that shared over N1.4 Trillion between January and August 2011, you can see the big wigs in the country and those who made Forbes list of wealthiest people in Africa.

1-      Oando Nigeria Plc- N228.506 Billion

2-      MRS                      – N224.818 Billion

3-      Pinnacle Construction- N300 Billion

4-      Enak Oil and Gas         – N19.684 Billion

5-      Conoil                          – N37. 960 Billion

6-      Bovas & Co. Nig Ltd    – N5.685 Billion

7-      Obat                            – N85 Billion AP N104.5 Billion

8-      Folawiyo Oil                – N113.3 Billion

9-      IPMAN Investment      – N10.9 Billion

10-  ACON                          – N24.1 Billion

11-  Atio Oil                        – N64.4 Billion

12-  AMP                            – N 11.4 Billion

13-  Honeywell                   – N12.2 Billion

14-  Emac Oil                     – N19.2 Billion

15-  D.Jones Oil                  – N14.8 Billion

16-  Capital Oil                   – N22.4 Billion

17-  AZ Oil                          – N18.61 Billion

18-  Eterna Oil                    – N5.57 Billion

19-  Dozil Oil                      – N3.375 Billion

20-  Fort Oil                        – N8.582 Billion

21-  Integrated Oil and Gas- N30.7 Billion

Now see the amount disbursed to these companies and the impact on Nigerians is not seen, we have not been in the mix of things, just a group of people called the CABAL enjoy the wealth of Nigeria.

The voices of the growing protesters at the Gani Fawenhinmi freedom park at Ojota keeps the president and all awake all day as they say “ENOUGH IS ENOUGH” we can no longer take this, the government has ruled us so long and now we have the speak up, I would relate this to what happened in Tunisia, Egypt and Libya, people now know what they can get when they come together with one voice, Nigeria has gotten to that point where they would not turn back except their demands are met. This country is heading for the pit with the security issues in the North and the strike that has crippled the economy, it is certain Goodluck Jonathan and his team have no clue about what they would do.

I would continue to pray even when I’m tired for this country. But those in authority should wake up from their sleep and see what is happening to our dear Nigeria, they should know that the people have woken from their sleep and they now know what the time is, we can no longer be fooled for so long, its time it’s our call. See below the table from other countries and how they live.

OPEC Member

PMS Price/Litre

Minimum Wage


Production ‘000 bPD (2007)

Venezuela 3.61 Nigerian naira 95,639 Nigerian naira 29,105,632 2,340
Kuwait 34.54 Nigerian naira 161,461 Nigerian naira 3,566,437 2,340
Saudi Arabia 25.12 Nigerian naira 99,237 Nigerian naira 27,136,977 9,800
Iran 102.05 Nigerian naira 86,585 Nigerian naira 75,330,000 3,700
Qatar 34.54 Nigerian naira 101,250 Nigerian naira 1,696,563 810
UAE 78.18 Nigerian naira   8,264,070 2,500
Algeria 63.55 Nigerian naira 55,957 Nigerian naira 36,423,000 1,360
Libya 26.69 Nigerian naira 23,813 Nigerian naira 5,670,688 1,650
Iraq 59.66 Nigerian naira 25,813 Nigerian naira 30,399,572 1,481
Nigeria 140-200 Nigerian naira 18,000 Nigerian naira 167 million 2,250

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