Apparently the attachment never got through, please see below
http://businessdayonline.com/NG/index.php/news/76-hot-topic/38296-fuel-imports-down-by-27-million-litres-on-subsidy-removal
Fuel imports down by 27 million litres on subsidy removal
Nigeria's daily fuel imports are down 45 percent this year, or by 27 million litres a day, on the back of the partial removal of petroleum subsidies by the Federal Government.
The amount of fuel imported into the country is running at a rate of 32 million litres a day, down from 59 million litres a day, before the 49.2 percent hike in fuel prices, from N67/ litre to N97/litre, and this is having a positive effect on the value of the naira, as well as the foreign exchange (FX) reserves.
"Over the period of many weeks, the naira exchange rate has firmed on the back of a sharp fall in imports of petroleum products," said FBN capital analysts, in a research note released yesterday.
"A reduction in the subsidy does not reduce the total cost of the import but does reallocate the split between the consumer and the provider of the subsidy. A reduction in the volume of imports, by contrast has a positive impact on FX demand and on the public finances.", the note said.
The naira has been relatively stable at the N157 to the dollar level for most of the year, and has advanced 3.2 percent this year, versus the dollar. Nigeria's FX reserves rose to $37.3 billion, a 21-month high, last week, after ending 2011 flat on the year. The reserves are up 13.3 percent year-to-date.
FBN capital says the cut in the subsidy on premium motor spirit (PMS) in January has led to a number of changes in the market and in market practice. The Petroleum Products Pricing Regulatory Agency (PPPRA) has introduced changes in the import regime, such as the appointment of certified cargo inspectors and the launch of a new inspection system, which has helped to cut the number of companies benefitting from the subsidy scheme to 42 from 128 last year. The changes have brought about "striking progress" according to sources at the Presidency, helping to curb fraudulent imports.
In a debate in the National Assembly in February, it emerged that imports had been running last year at 59 million litres while consumption was estimated at 35 million litres. A detailed report by the House of Representatives ad-hoc committee on fuel subsidy recently alleged fraud totaling the equivalent of N1.07 trillion (about $ 6.8billion). Payments totaling N2.6 trillion ($16 billion) in fuel subsidies were made in 2011 through a fraudulent process, the committee said.
"Nigeria consumes about 35million litres of petrol a day. If we assume that all of the petrol consumed in Nigeria is imported and by implication subsidised, then the government should be spending about N1.1 trillion ($7 billion) on petrol subsidies per annum, instead, the government is estimated to have spent more than double that, up to $16billion, on petrol subsidies in 2011." Yvonne Mhango, Renaissance Capital Sub-Saharan Africa, economist, wrote in a recent research note.
The Central Bank of Nigeria's (CBN) Monetary Policy Committee, (MPC) met this week, and referred to the "reduction in arbitrage opportunities" in the industry, as a result of the partial removal of the fuel subsidy. CBN Governor, Sanusi Lamido Sanusi, in a statement made after the MPC meeting hinted at the need for structural reforms to take place in the Nigerian economy, including perhaps a total phase out of the subsidy.
"Our view on fuel subsidy has always been very clear: that we cannot spend 4 percent of our Gross Domestic Product (GDP) on petroleum subsidies. There are of course other issues. These incude issues around the transparency of the entire process, which have come into light, and which are being investigated," he said.
President Goodluck Jonathan this week submitted a report on the $6.8 billion fuel subsidy fraud to the Economic and Financial Crimes Commission (EFCC) for investigation and possible prosecution of oil company officials behind the scam.
The real solution though, would be to move to full price deregulation, according to FBN capital, "This would yield substantial fiscal savings, attract investment in refining, remove the need of the PPPRA and several other public bodies, and in time, improve supplies across the country."
------------------------------------------
We face forward,...we face neither East or West: we face forward.......Kwame Nkrumah
We face forward,...we face neither East or West: we face forward.......Kwame Nkrumah
From: "shina73_1999@yahoo.com" <shina73_1999@yahoo.com>
To: usaafricadialogue@googlegroups.com
Sent: Thursday, 24 May 2012, 20:08
Subject: Re: USA Africa Dialogue Series - Understanding the Struggle
What is the point Okwy Okeke REALLY trying to pass across? I think I miss his argument.
Adeshina Afolayan
And how did you, Okwy Okeke, miss the fact that the anti-subsidy critics who argued that subsidy did not in fact exist (at least not nearly to the extent of the numbers being bandied around by the FG) have been vindicated by the report of the fuel subsidy probe? Have we, the uninformed critics, not been proven right that what exists is a system of fraudulent payments, false import declarations, and round-tripping bazaars that benefits only a few favored oil industry players and their government and political allies? I am shocked and appalled by the escapism of your post, and by its inexplicable removal from the facts of the $7 billion dollar subsidy scam. Even Sanusi Lamido Sanusi is now doing the backslide, asserting that the revelations discredit the case for so-called subsidy removal. Is "subsidy removal" not simply the legalization of a corrupt regime of fuel importation?
--
There is enough in the world for everyone's need but not for everyone's greed.
---Mohandas Gandhi
--
You received this message because you are subscribed to the "USA-Africa Dialogue Series" moderated by Toyin Falola, University of Texas at Austin.
For current archives, visit http://groups.google.com/group/USAAfricaDialogue
For previous archives, visit http://www.utexas.edu/conferences/africa/ads/index.html
To post to this group, send an email to USAAfricaDialogue@googlegroups.com
To unsubscribe from this group, send an email to USAAfricaDialogue-
unsubscribe@googlegroups.com
-- Adeshina Afolayan
Sent from my BlackBerry wireless device from MTN
From: Moses Ebe Ochonu <meochonu@gmail.com>
Sender: usaafricadialogue@googlegroups.com
Date: Thu, 24 May 2012 12:08:52 -0500
To: <usaafricadialogue@googlegroups.com>
ReplyTo: usaafricadialogue@googlegroups.com
Subject: Re: USA Africa Dialogue Series - Understanding the Struggle
On Thu, May 24, 2012 at 11:53 AM, Okwy Okeke <okwudili98@yahoo.co.uk> wrote:
--Many at the beginning of the year were up in arms when the FG attempted deregulating the distribution and sale of pms, though many if not most economists that were not seized by the frenzy of the day argued that the average man on the street would benefit in the long run.At the risk of sounding like a bull-horn for the FG, I wrote in this space that deregulation was the way to go, unfortunately, we ended up with a leg in the world of deregulation, and the other outside of it.Given our import dependence, the common man may have seen material savings (Naira has traded for N160/$ for several weeks now, ~7% appreciation from its November 2012 value), and more importantly, the reduction of rent-seeking activities by government cronies.Opposition is the check a democracy needs to be on its toes, then, we need informed and sophisticated opposition (keyword: informed).Okwy------------------------------------------
We face forward,...we face neither East or West: we face forward.......Kwame Nkrumah
You received this message because you are subscribed to the "USA-Africa Dialogue Series" moderated by Toyin Falola, University of Texas at Austin.
For current archives, visit http://groups.google.com/group/USAAfricaDialogue
For previous archives, visit http://www.utexas.edu/conferences/africa/ads/index.html
To post to this group, send an email to USAAfricaDialogue@googlegroups.com
To unsubscribe from this group, send an email to USAAfricaDialogue-
unsubscribe@googlegroups.com
There is enough in the world for everyone's need but not for everyone's greed.
---Mohandas Gandhi
--
You received this message because you are subscribed to the "USA-Africa Dialogue Series" moderated by Toyin Falola, University of Texas at Austin.
For current archives, visit http://groups.google.com/group/USAAfricaDialogue
For previous archives, visit http://www.utexas.edu/conferences/africa/ads/index.html
To post to this group, send an email to USAAfricaDialogue@googlegroups.com
To unsubscribe from this group, send an email to USAAfricaDialogue-
unsubscribe@googlegroups.com
You received this message because you are subscribed to the "USA-Africa Dialogue Series" moderated by Toyin Falola, University of Texas at Austin.
For current archives, visit http://groups.google.com/group/USAAfricaDialogue
For previous archives, visit http://www.utexas.edu/conferences/africa/ads/index.html
To post to this group, send an email to USAAfricaDialogue@googlegroups.com
To unsubscribe from this group, send an email to USAAfricaDialogue-
unsubscribe@googlegroups.com
No comments:
Post a Comment