 The federal, state and local government could have less money to share next month when they gather for the monthly federal allocation committee, and that's because the NNPC could remit next to nothing for the month of May. In a leaked letter to the federal government, the NNPC said its remitant will be zero. The corporation says it's spending so much on patrol subsidy, at least 111 billion Naira will be deducted from its April 2021 proceeds for patrol importation. Energy analyst Balazaka joins us to take a look at this. Good morning, Mr Balazaka. Thank you and good morning viewers. Good morning. So we have this information here from the NNPC. They're saying fuel subsidy is hitting into its revenue and that, you know, it might be remitting almost nothing to, you know, the Federation Accounts Allocation Committee. What would be the likely impact of this on the Nigerian economy, seeing that the NNPC makes up, you know, contributes the bulk of the revenue that's distributed to states across Nigeria? Well, based on the kind of system we are using of revenue sharing for the formula, or the modality, or the methodology, of course, the impact is going to be a very heavy one. Then the effect is going to be negative. The social life of Nigerians will be affected. The image of Nigeria before the international community will also be rubbish. But I am personally not surprised, and I'm not really disappointed, because it was something I expected was going to happen. We were moving to, we were grinding the economy gradually to the point where some of us knew that the economy will eventually get to a cul-de-sac. And if it doesn't get to a cul-de-sac, it will get to a tipping point where the economy will go off the cliff and only into the valley. And that's exactly what is happening. All right. I want to go into the discussion on subsidy proper. But before we get there, I want us to play a short clip from 2015 from President Mohamed Ablaari. So we'll be back after this. We'll listen to this. If you're going to the field, it's Nigerian chapter. It's Nigerian poem. What I understand Nigeria should charge Nigerians is the cost of one barrel at the wellhead, and when the cost of transportation to the refinery, the cost of refining it, and its cost at the pump. If anybody said he is subsidizing anything, he is a fraud. All right. President Mohamed Ablaari back then saying, anybody saying he is subsidizing anything, the person is a fraud. So now let's bring this to 2021. And NPC can't remit to the FFAC, rather, because they apparently are paying subsidy. What's your response to this? And would you also say that it's not really, really possible to completely end subsidy? Yes, looking at how the economy is today, you can never stop subsidy. If you stop subsidy, Nigeria will go into anarchy. Quote me, quote me, and quote me. When the president was talking like that, he was talking in line with the concept and thinking and the idea, and the national behavior of people like Professor Tam David West. I believe that Professor Tam David West, I believe in the model, I believe in the output. And if we had put it into practice, it would have worked. The only reason why we are subsidizing today, first of all, because we, our leaders cause the problems we are going into. But first of all, let me define subsidy. Subsidy is a globally accepted economy cushioning concept. Subsidy is not a Nigerian concept. Subsidy is not a Nigerian innovation. It's a globally accepted concept of reducing the pains of citizens of a country. In other words, you get subsidy in education. Citizens get subsidy in health. Citizens get subsidy in accommodation, in housing, and in the rest. And when it comes to energy sector and agriculture, they get subsidy. And when they get this subsidy, it helps them to be able to carry on. Because the government of their respective countries cannot provide the jobs for all of them. So when you give them subsidy, with that subsidy, they will be able to be on their feed. And some of them will be able to invest. And when they invest, they will employ fellow citizens and create what we call aggregate economic mobility and move the country forward. So when I hear people say we don't need subsidy in Nigeria, it gets me surprised. The only reason why subsidy is looking like an evil is because the economy has been mismanaged to the point where any attempt to give citizen subsidy is seen as something that will disrupt the wrong economic part that we are on. But unfortunately, if you don't give this subsidy, Nigeria, especially in petrol, Nigeria's economy will grind to a halt. If you try removing subsidy completely today, then a price of petrol will get to like 300 Naira, or may get to 350. Then you ask from 87 Naira to about 350. That means almost 300 or 400 percent increase. Then ask yourself a very simple question. Has the health of Nigerians improved by 100 percent? Has the revenue of Nigerians, I mean, income, this possible income of Nigerians improved by 400 percent? You know, has the quality of education improved by 400 percent? So when you look at it from that, and that is when you will know that removal of subsidy will really lead to anarchy. Indeed, Mr. Zakhar, that's what Millicare, the GMD of the NNPC said. He said that petrol really should cost between 211 Naira to 234 Naira. But it's not so because somebody else is paying the cost. He added that the price of petrol is really underpriced right now. But what really is the impact of this? When we're seeing just how this would begin to affect revenue by states? No, it's not a question of revenue. If revenue goes to the states, what are they supposed to do with the revenue? They are supposed to back up the lives of Nigerians. But what I'm telling you is this, if you remove that or you deregulate, that was why so many of us have been talking about being against and personally against the kind of deregulation we adopted because you are deregulated based on importation and you are importing knowing that your country has a very weak currency. You are also deregulating knowing that inflation is very high. You are also deregulating knowing that disposable income is very low. You are deregulating knowing that the balance of trade is almost negative. No country works like that. So the country is going to grind to a halt or collapse into the valley. And the crude oil that we of course have in enormous quantities, it is expected that there's many derivatives of crude oil that we should be able to earn from. So how disappointing is this that we can't raise any money aside what we've all used to pay off subsidy by the NNPC? The answer is very simple. The problem has to do with planning and lack of focus. And as I speak to you, because you brought this aspect, quote me anywhere in this world, tell anybody who cares to leave him from the president to the unborn baby that I said as of today, when you talk about drilling, there are less than six drilling rigs in Nigeria. In those days, you used to only have one operating company having more than six rigs. In those days, you will have like 30, 40, 50 rigs drilling at a time. People were busy. But in the world of Nigeria today, when you talk about drilling campaign, you have less than six rigs drilling in the world of Nigeria. Is that good for the image of Nigeria? The answer is no. And as I speak to you today, there is no exploration campaign. That means we are no more reserves. And if we are not building more reserves, we are only consuming and depleting the reservoirs that we have. That means we time as I'm speaking to you. Even the reserves that Nigeria is claiming to have will be fake. Oh, that's scary. See, Kerry also mentioned that for the month of June, there will be no increase in the price of patrol. But we've seen in history that once he makes such statements, he begins to have semblance of fioscacity, panic buying, and all of that. Why is that so? Well, the reason why Kerry saves so much is because it's just like when you talk about trying to create an artificial buffer. It is artificial because we know that the economy is growing. So they are looking for everything they can do as government to make sure the price does not go up. But we are saying combat and internally refine. That is the only way out. Get the crude oil from the wellhead within Nigeria in Nigeria. Move it to the respective refineries, header to pipelines, wagons in Naira. Refine in Naira. Save to sell to Nigerians in Naira. Preserve yourself in Naira and save yourself from exchange rate pressures. That is how you fix economies. Even when you talk about most of these developed worlds, you talk about when you go there, what do they do spatial from us? They only have good health care centers. And we go there to import all medical, all health care centers. The same thing with also the aspect that has to do with education. When you talk about capital, it's just because their schools are good. So it's the same thing with the refineries. If we refine internally, we will not have a need to go and import those derivatives. And if we don't have a need to import those derivatives, we will save the cost of importation, save the cost of insurance, save the cost of security, save the cost of demo rates. All right, Mr. Zaka. So everyone is talking about this deregulation so that we will continue to import. That person is an economic vampire and an economic maruda and a traitor. So this challenge is your highlight, Mr. Zaka. Would you say that's also one of the reasons why the NNPC recorded a revenue shortfall of 111 billion Naira in February 2021? The general non-performance of NNPC is known to everybody. We know that there is mismanagement. The refineries have not been maintained. When it comes to contracts, there is so much delay in contracts. When it comes to even awarding of oil blocks or licensing, you know some delay. When it comes to responses to what we call joint venture cash relationship, that delay has always been there. But that one also has to do with the way and manner the people running those places were promoted or recruited in the first place. If you recruit the wrong people, of course, you will have mediocres working for you. But if you recruit the right people in national interest, of course, those people will also work in national interest and put you on the right pedestal. But as far as I'm concerned, NNPC has some of the best brains that I knew in those days. But the question is this, are they placed in the right positions? And if they are placed in the right position, could it be that there is political interference so that they will not be able to do their jobs, especially probably during procurement or during maintenance? That's all I can say. But I am tempted to feel that there is political interference and that's why NNPC staff or personnel are not doing well. Political interference and probably nepotism, sectionalism and sectarianism. But as individuals, they are great guys because I knew some of them and I still know many of them. Does this also include the Minister of Petroleum? Well, as far as I'm concerned, the Minister of Petroleum is an appointee. So if you are appointed, the first thing that is supposed to happen is your appointee is supposed to assess you based on competence and what he or she wants to achieve. So if by the assessment of Mr. President, the person he appointed as a Minister of Petroleum qualifies to have the management dexterity and the acumen and to deliver what the President wants to see delivered, so be it. So it is only the President that can answer that. Because it's only the President that will also assess him and manage the individual. But as far as I'm concerned, generally the oil and gas industry is not doing well. And there's also been so much talk about unbondling the NNPC and of course deeper questions into the running of the NNPC in the last couple of years. People have also had conspiracy theories about the NNPC not even knowing exactly how much oil is drilled every day in Nigeria. But I want us to look at the 1.5 billion dollars that is meant to be used to fix the Portakat refinery. From your analysis, if we had a refinery or our refineries functional, that might be the answer to some of our economic challenges and reduce the amount of money we're spending on subsidies. So do you support fixing the Portakat refinery 1.5 billion dollars and maybe even more? I support it 100% and the only reason I said I support it 100% is this. The last time we constructed a refinery was around 1989. We announced in 2021, 32 years ago. Okay, the leaders that have been there refused to maintain the refineries that we inherited and refused to build new ones. What is the result today? The result today is calamity and disaster. So it simply means we need to go back. And there is this saying that even if you have traveled a million miles, if you are on the wrong road or the wrong track, it's better for you to go back. Okay, they refused to construct new refineries. Are we faring better now? We decided to adopt the system of importation of these leads. We're being better. We decided that we are going to be swapping our goods for petty products. Are we doing better? So when you look at the practical realities, Nigeria is not doing better. What about privatization? It's better. Okay, when you talk about privatization, this is my take on privatization. For all those who are saying we need to privatize, the question I just want to ask is this. Those who want to buy these privatized assets, if truly they want to go into refining or refinery business, why are they insisting in the government on sold to them? Why can't they adopt the dangote initiative? If truly they mean well for the country. Why must you tell me to sell my vehicle to you if I'm a public ministry for you to go into transportation? If you truly want to do transportation, I know to go and get your own vehicle either on hire, purchase, or whatever. Is the general national transportation precious? Why must I sell government vehicles to you? And if you tell me to sell government vehicles, I will tell you that you are among those who don't even have the government vehicles to work, but that it will be sold to you. And when it is sold to you, you will now go into business of transportation. So to me, that is a suspect. And are we also saying that the leaders in those days that decided to put those national assets were their fools? The leaders that put all those national assets, the national assembly, the asshole rock, all those places were their idiots. And if they were not idiots, when they put all those things, if they hadn't put them, those who are talking now, will they have found places to be? But to me, that aspect of privatization is a suspect. If truly you want to go into that business, don't insist on buying the work of the government. Go and look for loans. Open a consortium and construct your own refinery. National assets are national assets. All we need to do is to get the right people to manage our national assets. But as long as leaders continue to be nepotical, political and sectarian, national assets will not be managed properly. All right. Energy expert Balazsaka. Thank you very much for your insights on the breakfast. Thank you. All right. So that's where we... And you are speaking with him? Call it a wrap today. Talked about security. Talked about the SSS questioning a certain position for his views on national security. Talked about a national strategic plan to reduce poverty in Nigeria. And now talking about the NNPC, its remittances for the month of May, which is very likely to be zero. And we hope you enjoyed every aspect of our conversation today. Do follow us on all our social media platforms and on YouTube, especially with our new YouTube channel that's at PLOS TV Africa Lifestyle. I am Annetta Felix, thank you very much for joining us. And I am Osawa Gi Obama, wishing you a very interesting Thursday ahead.