XBLadez:

Don't mind them. I think the price was 149 naira per litre; as at then Ghana was paying more and nobody was complaining

Burger01:

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

tete7000:


If the market is appropriately deregulated and enough market operators licensed, you can't have arbitrary price increase because competition forces the price down. It is the situation we have now whereby NNPC controls the market and prices that discourage competition. If I may ask you: As an individual, can you invest in a market that fix price and discourages you from making immediate profit on your investment? Marketers buy products, sell at govt price and wait for months to get the excess they incurred. Within that period their money is held down and they can't turn it around. If you do basic economics, you will know money has time value and holding peoples' money down itself is a discouragement to investment. Many people who would have invested in the downstream of our oil sector would because of that rather invest their money elsewhere where they can immediately get return on their money. One of the real reasons why about eleven private refineries licensed by Obasanjo never took off.
It is not marketers that prevent refineries from working, it is people in government who benefit from importation created by a regulated economy. If the market is deregulated, many of the marketers have a lot to gain by pooling resources together to build refineries than continuously depending on importation. Subsidy effectively creates corruption and even if you choose to run after the cabals, the money that would be spent chasing them itself is going to enormous and can be invested elsewhere. Why don't we just deregulate, open the market to competition and save ourselves all these stress.

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.

VolvoS60:


^^^^
The key question I have asked several times is this: what are the unit costs per litre of producing and refining petroleum products here in Nigeria? Is there a subsidy on local drilling and refining of petroleum products in Nigeria? That is the question on which everything else turns but the authorities have refused to provide an answer.

If petroleum companies can drill and refine locally, add margins for distribution and profits, etc., and all this comes to less than the pump head price of N87 or whatever then there is NO subsidy. Period.

Your comments about petroleum marketers buying products and having their money tied down (while waiting for subsidy reimbursements) are for those who import refined petroleum products. Once the true cost profile of domestic drilling and refining of petroleum products becomes public knowledge then the scales will fall off our eyes. Even on this thread, some fellow has admitted that there is no subsidy on local drilling and refining. What does that tell you?

You raise an important point about the eleven private refineries that were licensed and yet never started operations. It would be interesting to know if any or all/some of these licensees are currently involved in petroleum products importation. What reasons have they given for failing to start operations? Has the government asked why? Have they failed to start operations because these licencees have their eyes on the extremely profitable PMS importation racket - a racket that will disappear if the government were truly serious about ending it (by building refineries itself)?

We were told some years ago that the market for kerosene and diesel had been completely deregulated. Yet in the intervening period we have had scarcity of both diesel and kerosene - products which had supposedly been fully deregulated. How do you explain that? All over the globe, petroleum products prices have been declining at the pump head because of the fall in crude prices. What do you have to say about the price of diesel and kerosene in Nigeria - why have they not fallen in tandem with the rest of the world?

jpphilips:


Why does the government need to prove that to you when the Govts position is in line with common sense!! now tell us, why do you think that Locally refined products should not attract a subsidy?

VolvoS60:


We were told some years ago that the market for kerosene and diesel had been completely deregulated. Yet in the intervening period we have had scarcity of both diesel and kerosene - products which had supposedly been fully deregulated. How do you explain that? All over the globe, petroleum products prices have been declining at the pump head because of the fall in crude prices. What do you have to say about the price of diesel and kerosene in Nigeria - why have they not fallen in tandem with the rest of the world?

VolvoS60:


^^^^
I have not said locally refined products should or should not attract a subsidy. What I have asked for is the cost profile of domestic/local drilling and refining - information which has suspiciously remained inaccessible to Nigerians for far too long. The current price of PMS at the pumphead is N87. If all costs of domestic/local production and refining plus a markup is less than N87, then where is the subsidy?

The information we need to have is the cost of producing and refining a litre of PMS locally. Is it more than, equal to, or less than N87? That's all I'm asking for!!!

jpphilips:


The information you are asking for is surprising because every Nigerian who care have it, now let me answer it for you.
The oil we send to our refineries, (let us even assume they are working optimally, for the sake of argument) where does it come from??

jpphilips:



AGO has been deregulated DPK still attract subsidy.

TheGoodJoe:


The Cabals did not win anything. The Cabals are GEJ and his cohorts. Why do you think we have missing billions of dollars in the NNPC?

Diesel has no subsidy and when the international price of Petroleum products dropped, Diesel price in Nigeria did not drop, Why? Because the Marketers controlled the Market. That'd is the kind of Plan GEJ had and the people succeeded. Not GEJ and his cabals.

NOI said they wanted to increase NEPA tariffs but they did not because of the fear of Protest. That was a victory of the people. Slowly, the people will control the government and not crooks like the one from Otuoke.

989900:


How much does it cost to produce a litre of PMS, and DPK through our local refineries?

I think the drift is straightforward.

989900:


How much does it cost to produce a litre of PMS, and DPK through our local refineries?

I think the drift is straightforward.

VolvoS60:


For now, I will leave the question of why DPK pricing policy has continued to somersault. Since AGO was deregulated some years ago has there ever been a shortage of the product and why? I would also like it if you could provide information of the extent to which AGO pump head prices have declined in Nigeria since the global price of crude fell.

I would also like your comments on the rest of my post about costing of locally produced petroleum products.

“Let me tell you, on the is­sue with oil marketers, we have been really working with them. We have been dialoguing with them. We paid them N350 bil­lion in December. We paid them N31 billion as foreign exchange differential and by tomorrow (to­day), we will be paying them the N100 billion which we will give them as IOUs as well as their interest rate differential of N56 billion.

jpphilips:



How can you ask how much it will cost to refine when you have not told us what you will refine and where you want to get it from/ dont you think that the source will determine the cost?

tete7000:


If the market is appropriately deregulated and enough market operators licensed, you can't have arbitrary price increase because competition forces the price down. It is the situation we have now whereby NNPC controls the market and prices that discourage competition. If I may ask you: As an individual, can you invest in a market that fix price and discourages you from making immediate profit on your investment? Marketers buy products, sell at govt price and wait for months to get the excess they incurred. Within that period their money is held down and they can't turn it around. If you do basic economics, you will know money has time value and holding peoples' money down itself is a discouragement to investment. Many people who would have invested in the downstream of our oil sector would because of that rather invest their money elsewhere where they can immediately get return on their money. One of the real reasons why about eleven private refineries licensed by Obasanjo never took off.
It is not marketers that prevent refineries from working, it is people in government who benefit from importation created by a regulated economy. If the market is deregulated, many of the marketers have a lot to gain by pooling resources together to build refineries than continuously depending on importation. Subsidy effectively creates corruption and even if you choose to run after the cabals, the money that would be spent chasing them itself is going to enormous and can be invested elsewhere. Why don't we just deregulate, open the market to competition and save ourselves all these stress.

Billyonaire:


Built by who ? Who should build the refinery ? Government is unable, world over to manage businesses. Nationalism is a wrong economic model; Capitalism with government holding minor equity in the consortium for regulatory mandate has been the successful model globally. Then, if Capitalism is the way forward, who is a Capitalist ? Majorly private investors or foreign direct investors in JV partnership with local enterpreneurs. Good, that takes us to profiteering. The sole aim of doing business, for a capitalist is profit, and so, if the Government of Nigeria is paying subsidy, only a mad man will put his money where there is government subsidy cos at the end of the day, its like building a restaurant close to the welfare foodstamp place. Who wants to come and buy your food, when there is free good food served on the same location.

Listen, I didnt make money being ignorant, I didnt make money being emotional. I study every model and module and research before I make statements on this issue. Unless and until the Government stops subsidy, not even Dangote will start building refineries. Why should I build refinery in Nigeria under government subsidy when other countries are begging me to build it there and sell at higher price regime ?

This is not about politics, this is business.

jpphilips:


You have managed to ask the right question, AGO price will NEVER fall in Nigeria unless there is a drastic government intervention, this present govt will not intervene because they have already lied that removing subsidy will bring competition that will drive down the price.
The sad news is this; THERE IS NO COMPETITION IN THE DOWNSTREAM SECTOR AT THAT LEVEL.

About the Global crude pricing, Nigeria has two major issues, a drop in crude prices and a devalued currency, both attract subsidies, now listen to okonjo iweala herself from the article we just read;



if you understood this part of that article, you will realize that most of your questions have been answered. Why will you expect drop in crude price to affect the price of AGO when you just devalued your currency??
The Govt is not always stup!d, we as citizens should try to understand better what is going on in our country before trading blames.

jpphilips:


The masses (myself and organisation inclusive) fought for it not because we don't know that it is no longer sustainable but for the express reason that Jonathan lied to Nigerians. Do you expect me to pay for Govt's inefficiency?

Few of those lies are;



**Subsidy is paid on imported products ONLY
**The oil importers want the subsidy to stay (cabals) whereas the oil importers are praying daily for subsidy to be removed.
**He lied that Nigerians are not benefitting from the subsidy (in the real sense, Nigerians living in places where Govt has failed were not benefitting eg SE.
**He lied that if subsidy is removed, competition amongst importers will drive the price down. (AGO subsidy removal actually put him to shame on this one)
** He lied that building new refineries will end the import regimen, (we are still asking why those refineries were not built, guess he now knows what we know).


In the face of these lies, no sane Nigerian will support subsidy removal.

989900:



Elusive/evasive is my personal inference from your response.

Because 'Volvos60' already mentioned about those missing/fluid parameters that we need to be conclusive. And we thought you had them.

jpphilips:



If Volvo needs a lecture, he can as well gain an admission, very well then, tell him the price without knowing the source!!
what are you? magician?

MizMyColi:

Your reply has caused me to read up.
Thanks, I'm enlightened.

VolvoS60:



^^^^
I am not sure you really understand my position on quite a few of these issues being discussed. Perhaps you should go through my posts again.

Are you not aware that government saw all the dire financial straits coming and wanted to re-position but Nigerians refused. Now, most state governors cannot pay salaries. Most IOCs saw this coming and have taken survival decisions and positions. Propaganda blinded our eyes and minds and now we are here.

Whether lies or not then....now, our government cannot pay salaries. Subsidy MUST GO if the country must survive. GMB may stabilize oil prices all he wants, this will not help either because again, the traditional buyers of our crude are turning to cheaper source of energy and gas is inclusive. This means that demand is dropping...

You just have to face the reality....

Nigeria is sinking fast and one of the fastest way out of this mess is to STOP SUBSIDY NOW!

VolvoS60:
We do not even have to use Norway as the sole example. What of Petrobras? Petronas? Aramco? How do they do it? Rather than make sweeping generalizations such as 'governments are unable, world over to manage business', you should say Nigerian governments are unable to manage business. The next assignment will be for Nigerians to ask WHY this is so .

rolchi:


Boss,what is happening now?

Are you not aware that government saw all the dire financial straits coming and wanted to re-position but Nigerians refused. Now, most state governors cannot pay salaries. Most IOCs saw this coming and have taken survival decisions and positions. Propaganda blinded our eyes and minds and now we are here.

Whether lies or not then....now, our government cannot pay salaries. Subsidy MUST GO if the country must survive. GMB may stabilize oil prices all he wants, this will not help either because again, the traditional buyers of our crude are turning to cheaper source of energy and gas is inclusive. This means that demand is dropping...

You just have to face the reality....

Nigeria is sinking fast and one of the fastest way out of this mess is to STOP SUBSIDY NOW!

jpphilips:


You are indirectly saying, You know nothing about the workings in the downstream sector, shouldn't you be in school or something rather than coming here to increase your nuisance value, no offence!!

Do you know it is unethical to comment on an issue you know nothing about?

TheGoodJoe:


Your answer lies in Diesel. After taking Subsidy off Diesel, the money from that avenue vanished, we are not seeing the so called competition from marketers. The same crew do the imports. The masses take the burden and no refinery came out from taking away Diesel subsidy.

The same will happen with Petrol if Subsidy is lifted.

Simple, if people rot in jail and lose their assets due to corrupt practices, the system will be sanitized.

tk4rd:
America and Saudi-Arabia has downstream sector in their systems too.??
You are among the Nigerians that accepted the scam we call "system" in Nigeria and sheepishly regard it as what should be.. No offence., but tell me why the so-called downstream sector is not operating in other sectors of the economy, especially solid minerals

jpphilips:


Do you even know why it is called "Downstream" sector? Enjoy your ignorance bro, guess what it? TGIF on Thursday