Burger01:
Subsidy has got to go. Remove subsidy and let's know what we are facing. Rome was not built in a day. We should be sensitised and palliatives put in place to cushion the effects of subsidy removal. Subsidy must go. It's a thieving conduit for the subsidy cabals.

Nigerians will agree that the government is making good effort to accom­modate the oil marketers

Bevista:
Nigeria's daily consumption of PMS is about 35-40 million litres. At optimal performance, all our Refineries put together can only process 12million litres/day. So you see, even at optimal performance, we will still need to import about 25million of PMS litres/day.

I am not a fan of subsidy, but I'm curious to see how the incoming government will approach the issue.

KEVIND:
When President Jonathan asked for the total removal of fuel Subsidy in 2012. He said Nigeria cannot afford to continue with this fraud (SUBSIDY),But Nigerians called him all kinds of names and even took to the street in protest. Jonathan simply knows that by tackling coruption and to fight the cabals in the oil sector you don't need to put everyone behind bars but simply stop the source of all forms of corrruption and which he has started doing but we never believe in Him. I wish the President Elect success in his fight to end subsidy and deregulate the downstream and upstream sector of the economy.

idupaul:
I want to see how Buhari will tackle this subsidy cartel

MARKone:


It is very simple, get our refineries to work to full capacity, a lot of money have siphoned by these cabals, aided by the FG, all in the name of subsidy.

rychard:
Fuel subsidy should be removed so there can be healthy competition among oil marketers in the downstream sector, and prices determined by forces of demand and supply. The govt. Just like in other sectors should emblace a law enforcing a cap on the pumo prices so it doesn't go above the he market price.

kuntash:
in all these subsidy talk, what did I hear NLC & TUC say? I think the FG has earned more respect that them now because they are yet to conduct a credible election to appoint their leaders... currently they have two factions....

imagine they talking about halting govt if subsidy is removed ...lol

some weeks ago, I was checking the price of a barrel of Brent crude oil in $USD.. and to know the quantity in liters of products that can be gotten from a barrel.

I put myself in the position of a refinery operator/owner, and based on my calculations, to make profit and run the biz efficiently, the pump price of petrol, diesel and Kerosene etc would be higher than what is currently sold. note- this was when a barrel was around $50+

and we have had a barrel hovering more than $100USD...

so based on these, to remove subsidy by govt completely , prices of products would be jacked up a bit..

the likes of Labour Unions and other similar bodies are somewhat lured by those who directly benefit from the subsidy to instigate the workers and average Nigerian to resist this move on their behalf...

Jan 2012 was a period we would sure remember GEJ for, but was thrown off and the Cabals won....

Those who resisted vehemently the subsidy removal of 2012 by insulting the govt and GEJ in particular, would be able to buy 20litres of PMS for N5000 right now, but the vulcanizer and danfo driver that joined them in the campaign can not afford such...

who is decieving who?

VolvoS60:


^^^^
There is a subsidy on imported fuel. Agreed. The landing cost on Nigerian shores of a litre of refined PMS from Venezuela, Norway, Iraq or wherever is definitely above N87 or N97 or whatever price of the month we are being charged for it. The figures are on the PPRA website - the landing cost as at yesterday was N114.76. By the time distribution margins (totalling N15.49 as at yesterday) are factored in, the cost per litre of imported fuel stood at N130.25 as at yesterday, 28th April 2015. The government foots the bill for the difference between this so called 'open market price' of N130.25 and the pump head price of N87.

But is there a subsidy on locally produced and locally refined fuel? This is a question that the government has refused to answer clearly. After several years of controversy on this matter, successive Nigerian governments have refused to come clean on exactly how much it costs to drill and refine a litre of fuel here in Nigeria. Why is it so hard to release this information to Nigerians in a clear and unambiguous manner?

Because if the cost per litre of locally refined PMS (plus distribution margins) is less than the pump price of N87 or N97 or whatever, then there is NO subsidy on locally produced fuel, plain and simple. This is the information that has been carefully hidden from Nigerians for donkey years. The Obasanjo government hid this information. The Jonathan and Yaradua governments also hid this information. Why?

Because access to this information will raise questions as to WHY these governments refused to build local refineries and instead chose to enrich private interests through opaque fuel import license agreements. Fuel import licence agreements that give jobs and revenue to norwegian, venezuelan and iraqi governments and citizens. Fuel import licence agreements that give jobs and revenue to international shipping companies to move refined petroleum products to a country (Oh! Nigeria!) that has the raw crude sitting right under her soil. Fuel import licence agreements that enrich global oil traders like glencore.

If there is indeed a subsidy on locally produced fuel then the government should prove it with facts and figures if they can. The truth will make us free.

tete7000:




As so long as their is subsidy, the incentives to ensure refineries do not work exists. The way to make refineries work is to end subsidy and open up the downstream sector for competition. It's going to be difficult to curb subsidy corruption as long as subsidy itself exists and people can make cheap billions without doing much. We need to stop deceiving ourselves and do the needful. On a short term it will be painful but on the long term we all stand to benefit.

989900:


30-40 million litres/day?

Don't bank on those figures, those figures have been altered to suit the loot on subsidy payments . . . even the products that are being diverted to Cotonou and other neighbouring countries, plus the ones that are just 'virtual/on-paper' products.

XBLadez:

Don't allow hate becloud your common sense of reasoning! If the FG had kept silent and allowed this scarcity trauma to linger, with all the queues and traffic bothering our road, you yourself would still come out yell "clueless"

TheGoodJoe:


When the Marketers control the market and they can hike up Petrol price to whatever benefits them, why will the marketers want Refineries.

Removal of Subsidy does not mean the marketers do not get their money. It means the masses pays them. They will not want the refinery.

The reason we have no refinery is because we have corrupt government officials who prefer to steal from the masses than provide for the masses.

VolvoS60:


^^^^
There is a subsidy on imported fuel. Agreed. The landing cost on Nigerian shores of a litre of refined PMS from Venezuela, Norway, Iraq or wherever is definitely above N87 or N97 or whatever price of the month we are being charged for it. The figures are on the PPRA website - the landing cost as at yesterday was N114.76. By the time distribution margins (totalling N15.49 as at yesterday) are factored in, the cost per litre of imported fuel stood at N130.25 as at yesterday, 28th April 2015. The government foots the bill for the difference between this so called 'open market price' of N130.25 and the pump head price of N87.

But is there a subsidy on locally produced and locally refined fuel? This is a question that the government has refused to answer clearly. After several years of controversy on this matter, successive Nigerian governments have refused to come clean on exactly how much it costs to drill and refine a litre of fuel here in Nigeria. Why is it so hard to release this information to Nigerians in a clear and unambiguous manner?

Because access to this information will raise questions as to WHY these governments refused to build local refineries and instead chose to enrich private interests through opaque fuel import license agreements. Fuel import licence agreements that give jobs and revenue to norwegian, venezuelan and iraqi governments and citizens. Fuel import licence agreements that give jobs and revenue to international shipping companies to move refined petroleum products to a country (Oh! Nigeria!) that has the raw crude sitting right under her soil. Fuel import licence agreements that enrich global oil traders like glencore.

If there is indeed a subsidy on locally produced fuel then the government should prove it with facts and figures if they can. The truth will make us free.

Burger01:
Subsidy has got to go. Remove subsidy and let's know what we are facing. Rome was not built in a day. We should be sensitised and palliatives put in place to cushion the effects of subsidy removal. Subsidy must go. It's a thieving conduit for the subsidy cabals.

kaboninc:


NNPC claims that they buy crude at international market price !

MARKone:


It is very simple, get our refineries to work to full capacity, a lot of money have siphoned by these cabals, aided by the FG, all in the name of subsidy.

kaboninc:


That is exactly what it is. The government foots the fill on subsidy on imported fuel ONLY! Public records have shown that. MOMAN, NNPC and some Independent Oil Marketing companies all Import fuel.



There is no subsidy on locally refined fuel. The local refineries refine their fuel and sell at the market price (I think same as the aggregate price) NNPC claims that they buy crude at international market price and hence must sell at same price. Why has successive government failed to re-position the local refineries? It is because as it stands, importing petroleum products is more profitable to these businessmen and hence will do everything possible to frustrate government's effort at re positioning the refineries - including the labour. Why would people enjoy sabotaging crude oil pipelines? They just don't do it because selling stolen crude oil is lucrative but also destroying the plants that refine the crude oil. A contract will be given to repair the pipelines and money gets wings. I strongly believe all these criminal activities are linked in one way or the other. Focus has always been on the imports segment because the state of the local refineries cannot meet the local demand of PMS. It is believed that kerosene (a commodity that must be seriously looked into) and PMS are products that the Nigerian people can say, yes we are getting a share of the National Cake. Look at kerosene, how can you buy it at 40.90k and sell at over 130 per liter? The excuse is that the aviation companies use this fuel and hence the 'scarcity'. Mind you, these aviation companies were supposed to buy at the current market price. You see, all these contribute to the rot in that industry.

Also, there is the local refinery like the Niger Delta Petroleum Resources (target commodity is diesel) and hopefully, Orient Petroleum which I believe should be working towards establishing one. Then the Dangote Refinery which hopefully, will be coming on stream in 2017. Then Forte Oil, Oando I hope will continue pushing their interest in establishing a refinery in Nigeria.



The current capacity of all refineries is 445,000 barrels per day. NNPC gets this crude at the current international price, and because the refineries are in a comatose state, a fragment is sent to some of these local refineries while the remaining is swapped for other petroleum derivatives from refineries outside the country.

The previous government did try by selling the refineries (at the last minute but was revoked by the incoming government) and this government wanted to curb the rot by removing subsidy. What attracts the continued rot is the subsidy - you can claim to import but never did and get paid for product never purchased in the first place. Have you also observed that the AGO market has not attracted the scandal as with the PMS and Kerosene?


Another issue is the Labour unions.


My advice for the incoming government is to SELL all public refineries, restructure the NNPC and completely remove subsidy as with the recommendations of the Senate Committee and PwC reports. We have the raw products, we have the capability to refine the raw products. We must develop the will to do the job!

Billyonaire:


You should have saved yourself this lengthy grammar by just looking up the word 'importers' in the dictionary. Only importers are paid, what ever is produced locally is not paid. And even at 100% capacity, our 4 refineries can not produce enough for our generators not to talk about cars.

Burger01:

Ohhkay. But, should there be subsidy on locally produced and refined petroleum products

tk4rd:
If not for the mention of "Subsidy" in the whole long story, I was about asking why government should be paying marketers who were already making gains in their normal buying and selling..
I see no reason for such payments oo..

zingywingy:
Kk....please pay up ur debts before May 29, since u never inherited any when u assumed power.

VolvoS60:


^^^^
Sir, perhaps you would deign to explain the meaning of the word 'importer' to me?

Let us go with what you have said. According to you, only importers are paid fuel subsidy and even at 100% capacity, our 4 refineries cannot cope with local demand. Then the question is: why have new refineries not been built? Answer that if you can.

VolvoS60:


^^^

School you? I'm no expert.


I agree broadly with the provisions of the PIB. Its been a while since I looked at its provisions in detail (particularly since there were so many versions of it flying about) but I support the provisions on local content, HSE and regulation of IOCs. However, there are some sections I disagree with.

I disagree with the vesting of ownership of petroleum resources in the federal government. Ownership should reside in individual landowners/communities and taxes/royalties should be paid to municipal, state and federal governments. I recognize that this will require changes to Nigerian law - the Land Use Act for one will have to be amended for my suggestion to have any effect. Whether this will happen now or in the next 1000 years is anybody's guess.

I am also concerned about the powers granted (section 191) to the President to grant PPLs and PMLs in so-called 'special circumstances'. These discretionary powers are one of the root causes of the problems in the sector today. Where is the oversight? What constitutes 'special circumstances'? The President also has broad sweeping powers to hire and fire board and agency members at will. Have we not learnt anything?

I strongly disagree with the exemption of the NPAMCL from the Fiscal Responsibility Act and the Public Procurement Act. How does this serve the public interest?


As to whether the PIB will solve subsidy issues and fuel queues - I have to admit I am a bit unsure. The Bill speaks extensively about gas pricing but doesn't go into similar detail on refined petroleum products - it simply says that downstream petroleum pricing will be deregulated. Curiously, it also states that the regulatory agency will set cost benchmarks for downstream operations. What this means in actual implementation remains unclear.

rychard:
Fuel subsidy should be removed so there can be healthy competition among oil marketers in the downstream sector, and prices determined by forces of demand and supply. The govt. Just like in other sectors should emblace a law enforcing a cap on the pumo prices so it doesn't go above the he market price.

Bevista:
Nigeria's daily consumption of PMS is about 35-40 million litres. At optimal performance, all our Refineries put together can only process 12million litres/day. So you see, even at optimal performance, we will still need to import about 25million of PMS litres/day.

I am not a fan of subsidy, but I'm curious to see how the incoming government will approach the issue.

VolvoS60:


^^^^
Be careful when you say 'subsidy must go'... or those who support the wholesale plunder going on will take those words and run with them. The question you should be asking is for the government to prove there is a subsidy on locally produced and refined petroleum products. Everything else turns on this question. If there is no subsidy on locally produced fuel there is absolutely no reason for routine, continuous importation of costly, dollar denominated refined petroleum products from other oil exporting countries. It makes absolutely no sense to do this.

Avoid repeating slogans or soundbites such as 'subsidy must go' without exploring and understanding the real issues behind them...or you unwittingly become an accomplice to those who have an agenda...