 Tunibu's subsidy removal announcement and Kainu State Governor-Elect gets Certificates of Return and Promises Infrastructure Revival. This is Plus Politics. I am Mary Anacom. In a knee-jerk reaction to the confirmation of fuel subsidies removal by President Bola Mertunibu's administration, marketers and operators have increased petrol pump price to 500 Naira per litre. In his inaugural speech on Monday, the president said since the immediate past President Mahmoud Buhari did not budget for fuel subsidies in the second half of the year, the payment is gone for good. In Lagos, the sharp increase in fuel pump price is almost 100% as legosians purchase the product for 500 Naira per litre from 118 Naira per litre. These prices change have happened less than six months or six hours after Tunibu's announcement during his inaugural speech at the Eagle Square in Abuja. Second guess, a new president. You know, this is a pronouncement and I think it's unfair on all of our major marketers who want to begin to seize opportunity in Naira where it's not. I mean we all need to be sincere in this country, if we really. Well joining us to discuss this is Nick Agouleh. He is a public affairs analyst. Nick is so good to have you join us. Good evening. Good evening to our viewers. Great. That's dissenting views on this particular issue. Since Tuesday morning, there's been chaos. There's the he said, she said situation. A lot of people are blaming the president for mentioning, even mentioning in his speech on Monday. And there are those who are also saying look, it's okay that this is being done right now instead of postponing doomsday. But what are your thoughts on how this has been, you know, this has played out? Thank you very much for that question. It's a very important question because few subsidy is the main topic that is trending in Nigeria now because every one of us have one thing or the other to do with petrol. Even if you don't use petrol directly as you don't have any machine, whether a car or a bike or anything or a generator that uses petrol, you will still be affected if the cost of food, for instance, in the market is high as a result of the increase in transportation. So you also be affected if you have to go to work with public transportation. So petrol is a commodity that affects all of us in Nigeria, whoever that you are. So this trending topic is actually needed because the president in his inauguration speech made a categorical statement that few subsidy is gone. I believe those were his exact words. Now there are two aspects to this speech. The first thing is that we all have to agree that few subsidy needs to go because I mean when we say few, it's not actually few. We should be very specific. Petro because few is a compound word that includes petrol, diesel, kerosene, aviation fuel and all of that. So it's not even few subsidy because there are no subsidies on all the other products, all the other few products. There is only subsidy on petrol, which is the premium motor spirit. So to be specific, petrol subsidies on petrol needs to go. That is incontestable because not only has that subsidy scheme not delivered to Nigeria's what the value that is required, it has been used by people to loot the common weight of this country. And the fact that petrol is the only subsidy that the federal government decides, I mean is the only commodity that the federal government decides that they will pay subsidy on. It's also questionable because we go to the market to buy food and in the same market you can buy a tube of yam at different prices depending on your bargaining power, depending on the trader you are dealing with. That's what we call market forces. So even the cost of the vehicles that the federal government is paying subsidy on petrol for, the cost of the vehicles is totally deregulated. People bring in a vehicle and sell it at a price that gives them a profit. Even if you have a vehicle and you have petrol in the vehicle, the petrol alone is not going to move that vehicle. The vehicle needs other things like engine oil. And the price of engine oil is totally deregulated. People are buying engine oil in bargains between seller and buyer. So it's not very clear why the federal government of all the commodities in Nigeria including pharmaceuticals which are so needed to keep us alive that the federal government doesn't bother about the price of those commodities. The federal government doesn't bother about the price of diesel. And diesel is the fuel that is used in the manufacturing. The federal government does not bother about the price of kerosene which is used by the poor. So the question is why was the federal government so concerned with one single commodity petrol and we have been spending trillions of naira on this commodity. So that aspect is that the subsidy needed to go. But then there is a second aspect. The second aspect is that how? How? For me, the president-elect needed to take office and then call all the players involved in this subsidy scheme together and understand this subsidy thing properly because he was outside the corridors of power. He didn't have the data. He didn't know anything that was happening as far as this scheme was concerned. So he needed to invite all the parties into a room so that they can break down the data for him. It is when he sees the data that he's not able to make decisions, smart decisions where he will be able to now take those steps that will ensure that it's a win-win both for the government and the people of Nigeria. So I would have expected him to have exercised better wisdom in his speech, in his inaugural speech to say, we are going to address the matter of fuel subsidy. And Nigerians should look forward to a statement from my government on what is going to happen to fuel subsidy. I'm curious, Nick, why would the president just mentioning that fuel subsidy is gone begin to cost the kind of chaos that we've seen between Monday and today? Nothing has been put out. A statement or a joint statement was not put out by the NNPC in collaboration with marketers. Nothing. So I mean, if president can mention this, it doesn't mean that we should have this kind of rippling effect. Or was it just that these people were already waiting for an opportunity to take advantage of Nigerians, especially when we're facing a downturn in the economy? Yes. So the president made the inaugural speech on Monday, the 29th of May. On that Monday, there was no problem at the petrol stations. On Tuesday, there was no problem at the petrol stations. Oh, there was. That's when it begun. Okay. I think it was Tuesday when he started. Okay, sorry. So let me take that back. So president made the speech on Monday, no problem. On Tuesday, the NNPC, who is the sole importer and supplier of petrol in Nigeria, and that is another issue I'm going to address, decides on its own to increase the price of petrol that is given to the petrol stations to 500 plus. The NNPC actually published a list, which I have seen, where they have different price regimes, but not less than 500, within 500 or something around the country. And that is what has resulted into this price hike that we are seeing. It is the NNPC that caused this. And I don't understand why the NNPC decided to do this. The reason is this. The Buhari government told us, and we have actually seen, that there is provision for fuel subsidies up to the end of June. And the NNPC, even in the run-up to the inauguration, told us that they had several weeks of petrol in stock to take care of demand. The petrol that was in stock already had subsidy paid on it. So, why would the NNPC then wake up one day and decide to hike the price of petrol on stock, from which Nigeria's money has already been used to pay for subsidy? These are the questions that I expect the media to process and be the NNPC group managing director as to his actions. Brutals were brought in, subsidy was paid. These things were in the tanks. And then you wake up one day and increase the price of petrol upon which we have already paid subsidy? How does that work? So, if the NNPC increased the price of petrol from 1st of July, as we understand. Because then we know that the budget that was provided for subsidy up to 30th of June was used to provide the subsidy. So, that is one side. The other side is that, why is it that it's only the NNPC that is importing and distributing petrol in Nigeria? Why? This is the question that we need to ask ourselves. Of all the commodities that we consume in Nigeria, I mean pharmaceuticals, pharmaceuticals to me are even more important than petrol to humanity. Because if you are sick and you don't take a drug, you will die. Whereas you wake up in the morning and you don't use petrol, you can see a leap. So, something of pharmaceuticals, government has allowed local manufacturers, government has allowed people to import and everybody is selling their pharmaceuticals at their prices that will give them a profit. Why is it that only NNPC is importing petrol? If government totally deregulates this sector and says Nicaragula petrol company limited, if you like, you can import. Anybody that wants, you can import petrol with the government will only be responsible for checking the quality of the petrol that you are bringing in. And when you bring that petrol in, sell that petrol at a price that will give you a profit. What will happen immediately is that those who already have the facilities to import petrol and bring it into the country, they will be the ones that will be doing the business and any humongous profits. But as people watch them make profit, there will be entry of more players into the sector. And as more and more players enter the sector, so the price of petrol will continue to fall because there will not be competition. This is what we are experiencing in telecom for instance. So that is one of the questions that I expected President Tinibu to sit these people in the room and ask. Why is it that NNPC is the only one importing petrol? He needed also to ask them what is the landing cost of this petrol that you are bringing in. He needed to ask them what is the actual quantity that is being consumed. Show me evidence of the quantity of petrol that is being consumed by asking these questions. President Tinibu would have seen the two aspects of the subsidy. There is one aspect of the subsidy that is legit because there is actually subsidy. If there was no subsidy, petrol would say more than 195. That is just the fact. Then there is another aspect of the subsidy that is fraud. That one is looting. President Tinibu just needed to do a little bit of homework to justify the two so that he can see the legit subsidy and then he can see the looting. And then he will cut away the looting. Immediately he cuts away the looting. The subsidy bill I cannot imagine in my head that the subsidy bill will come down by about 50% to 60%. But simply cutting away the looting. And then the next thing President Tinibu needed to do was to ask the question why are Nigeria's core refineries not working? That is the next question I wanted to ask. But before we go to that, you talked about Melikeari. Melikeari has been talking to the media. He was on a morning show on a different station this morning and he was speaking about the spike of prices. And in fact, he was quoted to say that the spike in prices would lead to a competition. I wonder what competition that will be because as we speak, just as you said, the NPC has that monopoly. But he said that the recent increase in fuel pump prices will lead to heightened market competition. He also said the removal of fuel subsidies and the alignment of prices with market rates will attract more oil companies to invest in Nigeria's oil market and they will also benefit from the economy or rather the economy will benefit from it. And then lastly, he talked about the fact that the market would regulate itself. It would reduce inefficiencies and fuel smuggling while it will make industry data more credible. But how can all of these things happen if we cannot even attest to how much fuel consumption we do in a day for so many years? The NPC has been unable to tell us how much fuel that we consume as a country every single day. It's almost impossible. We're always speculating. Again, you've also talked about the issue of refineries. Many had said that, oh, maybe with the dangote refinery we're probably going to have a bit of competition. But there are also those who query if there will really be a competition of sorts when dangote eventually decides that he's going to start producing. And then also the other question I want to ask is, how soon will that be? Thank you very much. I wish it was you who was interviewing the CEO of the NPC so that you take him apart. You know, your inquisitive questions now. I wish they were put to him so that he can explain it to us. How can you say there'll be competition when you are the sole importer? You are a monopoly. You are the only one bringing in this product. So how can you, the only person bringing in the product, set a price of 537, for instance, and expect someone else to set a different price? You know, and to me, this is what President Tini Boone, it's not even late. I think that President Tini Boone made that broadcast in his inaugural speech. I think he should, if he's watching me or any of his advisors are watching me, I am still advising that President Tini Boone should draw these people into a room. He should bring the NNPC into the room. He should bring Nigeria's downstream regulatory authority into the room. He should bring the major marketers into the room. He should bring the labor unions that are dedicated into the room. And he should just bring civil society into the room and he should bring the everyday consumer of petroleum products into the room so that he can ask these questions. Like you already said, there is a dark box in this subsidy scheme. We don't know the landing cost because it is the landing cost that will determine what subsidy is. If the NNPC tells us that we are landing petrol at 600 Naira per litre, then government cities sell at 195. We know what subsidy is because subsidy will be the difference between the landing cost and what government says we should sell. Again, by 2015, Nigeria was said to be consuming 30 million litres of petrol. As we are speaking today, they are talking about 60 million. There was a figure of about 70 million litres that was put out there. As the number of cars doubled on Nigeria roads, they jumped in the quantum of petrol that we are consuming. Is it consistent with other nations? Is that how other nations, petrol consumption also jumped? No, you can clearly see that there is racketeering with this number. These two key metrics that are needed to compute subsidy. There is racketeering with them. That is the landing cost of the quantity consumed. Now, what President Tinibu just needs to do in the interim is to say, NNPC, I know you are an oil company, please step aside. I want every other person who can bring petrol into Nigeria to go and bring their petrol. Downstream authority have a very strong testing regime at the port so that when the petrol comes, you must test it and ensure that it is fit for consumption. Everybody should bring their petrol in and sell it at a price that will make them a profit. In the UK, where I live, you can have two petrol stations. I used to work for an international oil company. We had two petrol stations on the A4. There was also no London. The A4 is the road that leads London to the Heathrow Airport. They were opposite to each other and the prices of petrol and other products in the two stations were different. Because it depends on the dynamics of the market. Let us have a situation where if the NNPC like, let them be selling their petrol at 5.30pm. If somebody succeeds in bringing in their petrol and sell it at 4.50pm, let them be carrying the market. So that another person who brings in and is able to sell at 3.00pm, let them be carrying the market. Before you know what is happening, if the true competition will lead us to the market prices for these products and the racket theory will just disappear. But that should have just been an interim measure. The real question is Nigeria has got four refineries four refineries with combined capacity of 450,000 barrels of crude oil to be refined daily. Presidentinupu needs to ask the singular question NNPC why are these refineries not working? GMD CEO as he calls himself not changing nomenclature, not changing behaviour. CEO of NNPC, if you don't get these refineries to work for me in six months, I am sucking you from your job. But Nick, these refineries as we all know from some of the research and visibility studies that have been carried out on these refineries, they have become more bound. They are no longer a state of the art. They are not as good as what is used in today's refining. So, I mean, there is money trillions and trillions have been thrown at turn around maintenance. But how workable will these refineries be being that refining has taken a new turn and these refineries are really old and from way back when. How can he accomplish that in six months? And how are we certain that even if a lot of more money is thrown into making the refineries work that they will be up to the task? So, this is a situation that I cannot make a categorical statement about because I don't have the technical background to the refineries as we have them today. But if I can go by what consistently told us, the NNPC, you know all this work that these refineries have not worked. The NNPC still pays staff who are in those refineries. And the NNPC tells us that they are paying those staff because the staff are taking care the staff are taking care of the minimum maintenance activities that will make these refineries to still be viable. So, if I take the NNPC by their words the refineries should still be viable. And if President Thinibu can commission a study he can commission a forensic study of Nigeria's four refineries. Not by the NNPC, not by the Minister of Petroleum not by the downstream regulatory authority, but by independent experts independent experts of repute both Nigerians and experts from above from abroad to study the four Nigerian refineries and see their viability. And if those refineries are viable I will actually advise President Thinibu to hance off those refineries. Just hance off because the NNPC hasn't been able to operate them in the matter of 20, 30 years. So President Thinibu then needs to put up those refineries either for sale or for lease and operate. So that operators in the downstream sector who are already into refining business can take those refineries and work with them. You see, you know in 2007 in 2007 as the Obasanjo regime was about to leave office they sold those refineries they sold those refineries and the buyers of those refineries must have bought them only after they had commissioned technical studies and commercial studies or the viability of those refineries they would not have put their money there. But that sale was reversed. I mean the likes of a family of 10 of that were some of the people who paid to get that refinery but then that was reversed. But let's quickly because we don't have time let's move quickly to the situation of things on the ground. Let's look at the crippling, let me not even say it the crippling effect of this subsidy removal and the way and manner in which it's been gone about. Let's quickly take a look at the reactions of Nigerians around town and how they're reacting to the situation of things. Within five minutes all the petrol stations have closed. After all they have stock in their they will have, unless they get new stuff, I don't expect anybody to increase fuel by every one couple. I understand some people have started selling at the rate of 300 fondage how do you justify that? For how many hours? Since 2 o'clock at the yard I have not taken my breakfast. Even lunch I have not taken lunch. Nigeria accept that accept that the case we have taken to Trabuna is decided as it should be. Then as a matter of fact the subsidy has just begun. First subsidy as a matter, it's a policy matter of government. And it's not what you come to the open to talk about but the incoming president had mentioned that the implication is what you find or grab. So what was his expectation when he was making that statement? What did he think? So today we are ridiculing so it explains what we have to see the next four years or less something drastically apple. Just few minutes ago I bought four years 502. Yes, Mr. President may have announced that subsidy is gone. That's just a few people giving you the reaction to what's happening. Now in the interim how do Nigerians survive? Because salaries are not going to be increased, the cost of living is continuously going higher transportation is a total mess because people can't even afford it. Take home pay will now only just be transport pay. In two minutes where do we go from here? I feel very sad. When I watched Nigerians lament about petrol like this something they have been there from since 4am, some sleeping on the queue. It's like a farmer one of the biggest farmers of Yang in the world. The children are perpetually hungry. You know, it's a shame and I believe that the government should do something quickly about this. So where do we go from here? My advice to President Tinibu is number one, sit all the experts and all the stakeholders that are needed in this few subsidy in a room, understand what it is but the immediate step that needs to be done is totally deregulate this downstream sector. Make it open that from tomorrow, if anybody wants to import petrol and sell it at a price that will make them a profit, let them do so. And from tomorrow, President Tinibu should begin to talk about the refineries. He should do something about the refineries. And my advice to him is that, he should just simply sell those refineries. President Tinibu can sell each of the four refineries at one dollar. One dollar. And how do I mean? The people that buy the refinery at one dollar will now use the money they would have ordinarily built another refinery or refurbished another refinery to now refurbish these refineries so that they can start producing petrol for us. And I can tell you that if we refine locally, the petrol will be far cheaper than what the NNPC is forcing down our throats now. Because what the NNPC is forcing down our throats now is the cost of buying crude in Nigeria the cost of shipping the crude to Singapore, the cost of refining the crude in Singapore, the cost of moving that refined product from Singapore back to Nigeria with insurance costs, with the handling costs, with the port charges, with the demolition rates, and everything is inside that 537 Naira that the NNPC is forcing down our throats if we are refining our products locally. We are not going to pay a dime in all those costs I have mentioned. So that is the solution that President Tinibu needs to go to. Well let's hope that he's listening and something will obviously be done about it but Niko Gule is a public affairs analyst always a pleasure to have you on the show Niko. Thank you for coming. Thank you and Nigeria's let's keep hope alive. Tomorrow will be better. Well we'll take a quick break. When we return we'll be discussing the promises made by the governor of Kanu state to the people and of course setting the agenda. If still plus politics we'll be right back.