shiftmarket:


OK. You have tried desperately to take us from the crust of our discuss. My first post says subsidy is not the issue in Nigeria at the moment, corruption is. I have said this at least 4 times.

Bringing the issue of government refineries vs private refineries is a different topic entirety. Pls stay on topic and teach ur students to do same.

my answer has always been let there be free entry into the running,building of refineries and the only stumbling block is NnPC and subsidy.as long as they control products( corruption will remain).

shiftmarket:


OK. You have tried desperately to take us from the crust of our discuss. My first post says subsidy is not the issue in Nigeria at the moment, corruption is. I have said this at least 4 times.

Bringing the issue of government refineries vs private refineries is a different topic entirety. Pls stay on topic and teach ur students to do same.

Nigeria can no longer afford to pay subsidy on petroleum products full stop. Corruption or no corruption we do not have the money to pay. You have to let it sink in your head. We have an infrastructural decay that will take 200 billion dollars to fix, you have annual 'deficit' budget of less than 20 billion dollars of which 40 percent is used to fund lazy states and you want to continue to spend 25% of your the remaining budget to subsidize PMS?

Hope the apology below helps

You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

Before you critic always put yourself in a leadership position and provide practical solution and stops the too much talk

shiftmarket:


Am not sure I understand you but fact is the whole subsidy issue is shrouded in mysteries. Once the real position of things is known, Nigerians can now decide if they want subsidy or not.

Kindly explain why radio, TV stations, banks and telecoms are shutting down because of diesel. Or is diesel subsidised?

The subsidy issue is not shrouded in mystery. You have chosen to be ignorant. The average price of PMS around the world is about 1.1 dollars per liter. That's 220 Naira per liter. Poorer countries pay this. We produce 2.2 million barrels per day, rich countries like Russia US, China, India UK Brazil that produces up to 5 times more oil than we do pay this. Poorer countries like Haiti Angola Gabon also pay this. Even poorer and remote villages in Nigeria, burutu Nembe, mambila pay 200 plus for a liter. So what is the problem with it all gone? I'm 2012, sanusi and Iwealla with Allison went round TV stations explaining the steps to fully deregulate the downstream sector, no one listened. 65 Naira or nothing was the chant. I remember when Sanusi said the best way to put a fire out is to eliminate the source of the fire.

It was shame that GEJ and his ministers did not have the political tenacity to completely do way with this fire. Buhari seems to have it. He will remove it, fuel will sell at 180-220 per liter and there is nothing you will do.

Sibrah:
If crude price is falling then why isn't diesel and kerosine reflecting this fall in price. Have at d back of ur mind that diesel is unregulated by our govt I.e zero subsidy.

Because the sector is not fully deregulated. The money these marketers get from PMS, they can afford to sell diesel to you at any price. You are lucky. If the sector is fully deregulated, you may buy diesel at 180 Naira per liter.

shiftmarket:


Good. Same thing can happen to petrol even if u remove subsidy or not. So in essence we can both agree that subsidy does not magically solve our problems as u wud have us believe. All the other quoted rhetorics are just that.

A proper investigation will show for example why a refinery is always on TAM as u claim they are. Just for ur info, are u aware that the Nigerian refineries do not get their share of crude to refine?

I believe the reason that the price of diesel is high is because it is not lucrative to import it. The marketers simply ignore it and all rush for the beautiful bride called PMS because of the subsidy they will get from govt. This creates artificial relative scarcity of diesel and the price remains high.

Sibrah:
It all depends of the reputation of the government in charge. If issue of systemic corruption can be tackled by the sitting government then subsidy can go. That's to say If for example Buhari admin is ready to face the challenges of Diesel selling for same rate it sold for in 2012 Jan, when crude price was more than double it is now, then he can remove. If not removal of subsidy will only be a licence for the marketers to form a cabal and be the new government of fuel.

The price of crude oil is not directly proportional to the price of diesel. In other words if the price of crude oil is reduced by 40 percent, the price of diesel will only reduce by 5% or less The reason being diesel is a necessary by product from the very cherished PMS. It's prices are determined by refining margins amongst other factors. These margins are calculated from the composition of crude refined

The price of diesel has dropped in several countries but risen in others. From July 2013 to July 2014 (oil price peak), the retail price of diesel dropped by 3.6 percent in Germany. In Japan, prices increased by 9.7 percent during the same time. The United Kingdom had some of the highest prices for automotive diesel, reaching 1.93 U.S. dollars per liter in July 2014. Today in the UK, the price of diesel is 1.91 U.S. Dollars.

With all due respect do some reading and appreciate international commodity pricing. It's is not as simple as buying and selling tomatoes and pepper. The internet has a huge database base.

ohzee:


I believe the reason that the price of diesel is high is because it is not lucrative to import it. The marketers simply ignore it and all rush for the beautiful bride called PMS because of the subsidy they will get from govt. This creates artificial relative scarcity of diesel and the price remains high.

Fantastic

gohome:


Nigeria can no longer afford to pay subsidy on petroleum products full stop. Corruption or no corruption we do not have the money to pay. You have to let it sink in your head. We have an infrastructural decay that will take 200 billion dollars to fix, you have annual 'deficit' budget of less than 20 billion dollars of which 40 percent is used to fund lazy states and you want to continue to spend 25% of your the remaining budget to subsidize PMS?

Hope the apology below helps

You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

Before you critic always put yourself in a leadership position and provide practical solution and stops the too much talk

Y u choose the option of insulting me in passing ur message beats me.

If u have read all my dialogue with bara, I have always said corruption not subsidy removal is our (Nigerian) problem. Corruption shot up d value from 350billion in 1yr to 1.1T. It is those mysteries that must first be unravelled. Then we can decide and know the exact amount we are removing.
I supported deregulation in 1999, which to my mind is another name for subsidy removal but btw then and now no gained in the whole process. Simply frees up more money for politicians to steal. That is the issue Oga.

If subsidy removal is the only solution to scarcity why is diesel scarce to the extent that businesses were shutting down? Diesel is not subsidised and I believe u know that.

baralatie:

my answer has always been let there be free entry into the running,building of refineries and the only stumbling block is NnPC and subsidy.as long as they control products( corruption will remain).

Good build more refineries. In short force the markerters to build refineries. When you have refineries and the purchasing power of the naira becomes high people will not care about the price.

gohome:


Nigeria can no longer afford to pay subsidy on petroleum products full stop. Corruption or no corruption we do not have the money to pay. You have to let it sink in your head. We have an infrastructural decay that will take 200 billion dollars to fix, you have annual 'deficit' budget of less than 20 billion dollars of which 40 percent is used to fund lazy states and you want to continue to spend 25% of your the remaining budget to subsidize PMS?

Hope the apology below helps

You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

Before you critic always put yourself in a leadership position and provide practical solution and stops the too much talk

You are being myopic in this your analysis, you are not looking at the bigger picture. This petroleum subsidy issue is mired in so much mystery and confusion that nothing definite can be known unless there is a forensic audit of NNPC and the whole process.
We need to know exactly how much fuel is consumed, how much it cost to buy from foreign refineries, how much it costs to ship to Nigeria, how much it costs to distribute to various depots and how much it cost to dispense in your cars.What are the costs of corruption and innefficiencies in the system, then we will be in a better position to debate whether we should retain subsidy or not.

Having said that, i am not a fan of deregulation in a critical sector like the petroleum sector. There is never deregulation in the real sense of the word in any country in the world, government always regulate to some extent all industries in order to prevent abuse, monopoly and to protect public interest. It is the degree of regulation we should be debating about. "Deregulation" is good in situations with efficient market economy with strong institutions, but had been proven to be disasterous in countries with inefficient or underdeveloped markets with very weak institutions. All you will produce is monopoly or Oligarchy and the masses being at the mercy of a few powerful cabals.

This is what we have in almost all sectors of the Nigerian economy that had undergone deregulation. This is why deregulated Diesel and aviation fuel will never be cheap and available. This is why DSTV, MTN, Etisalat, etc can charge the masses very high tarrifs with very poor services. This is why deregulated NEPA is worse than regulated NEPA. I can go on and on. Before Thatcher deregulated or privatized the British economy, she made sure that the public run enterprises were running optimally and efficiently and very efficient regulatory bodies were in place.

Sorry have to go now. will try and continue later.

shiftmarket:


Y u choose the option of insulting me in passing ur message beats me.

Sorry I said you talk too much. Sincere Apologies

shiftmarket:

If u have read all my dialogue with bara, I have always said corruption not subsidy removal is our (Nigerian) problem. Corruption shot up d value from 350billion in 1yr to 1.1T. It is those mysteries that must first be unravelled. Then we can decide and know the exact amount we are removing.

I will say it again. Corruption is one of the problems. Maybe the major problem, but it is not all the problem.

The best way to fight corruption is to totally remove what fuels the corruption. It is that simple. Also 100 billion, 350 billion, !1 Trillion, we do not have the money to pay for subsidy.

shiftmarket:

I supported deregulation in 1999, which to my mind is another name for subsidy removal but btw then and now no gained in the whole process. Simply frees up more money for politicians to steal. That is the issue Oga.

If you can trust them with 4 trillion annual budget, then trust them with 1, 2 300 billion. y dont you go collect the 4 trillion Naira because you dont trust them with it and put in your house. You want to waste 300 billion on petroleum subsidy and blame your government for infrastructural decay, No power, No light, external and internal debt, non payment of salary etc. You want your kids to be out of school, you want your wife to die in the hospital because you do not have good medicare, but you want to fuel your Gen in a leaking house? SMH

shiftmarket:

If subsidy removal is the only solution to scarcity why is diesel scarce to the extent that businesses were shutting down? Diesel is not subsidised and I believe u know that.

Subsidy removal has nothing to do with scarcity. PMS subsidy does not exist in 90 percent of the countries in the world, yet no scarcity. Why should it be scarce in Nigeria. No subsidy in Ghana, Niger, Togo, Benin, Kenya, SA, No scarcity. PMS is available worldwide if you want to have it at 1.1 dollars per liter. The only reason for Diesel scarcity is the fact that marketers refused to lift. If MTN refuses to give you service, Etisalat will. If OandO refuses to give you diesel, Capital Oil will. Deregulate the downstream sector is the only way. 3% of your budget goes to your National Assembly. Let them pass law and implement policies to guide against capitalism excess. Go and read about the meager between ATT and Tmobile.

shiftmarket:


Good build more refineries. In short force the markerters to build refineries. When you have refineries and the purchasing power of the naira becomes high people will not care about the price.

what do think affects the purchasing power of people?

shiftmarket:


Good build more refineries. In short force the markerters to build refineries. When you have refineries and the purchasing power of the naira becomes high people will not care about the price.

what do think affects the purchasing power of people?
let me say and assume that i understand that you don't want a cut throat price regime of capitalist businessmen.
1.this can be achieved by making oil refinery a free entry and free exit license.
2.you can controlled through a neutral body that monitors the price regime for end products excluding over head of whoever wants to do business.
3.encourage production and export of your refined products,

wirinet:


You are being myopic in this your analysis, you are not looking at the bigger picture. This petroleum subsidy issue is mired in so much mystery and confusion that nothing definite can be known unless there is a forensic audit of NNPC and the whole process.
We need to know exactly how much fuel is consumed, how much it cost to buy from foreign refineries, how much it costs to ship to Nigeria, how much it costs to distribute to various depots and how much it cost to dispense in your cars.What are the costs of corruption and innefficiencies in the system, then we will be in a better position to debate whether we should retain subsidy or not.

This analysis has been done by so many Nigerians. It has been done by your neighbors, Ghana, Togo etc. It has been done by your felow African brothers like Kenya SA. The world bank too has done this shockingly. The Average Price (landing cost) of crude oil is +/- 1.1 dollars per liter. It can vary based on Transportation, grade of refine products and taxes.

wirinet:

Having said that, i am not a fan of deregulation in a critical sector like the petroleum sector. There is never deregulation in the real sense of the word in any country in the world, government always regulate to some extent all industries in order to prevent abuse, monopoly and to protect public interest. It is the degree of regulation we should be debating about. "Deregulation" is good in situations with efficient market economy with strong institutions, but had been proven to be disasterous in countries with inefficient or underdeveloped markets with very weak institutions. All you will produce is monopoly or Oligarchy and the masses being at the mercy of a few powerful cabals.

If you do not deregulate, you wont build efficiency in Nigeria. Refining margines are very small with the volatile oil market you have. Big players like Shell BP Total etc would not build refineries if you do not let you government hands off. When Dangote's refinery is ready he will sell to Ghana, Togo and the likes if your Govt does not hands off. Fuel is not cheap. it is 220 Naira per liter. Get use to it.

wirinet:

This is what we have in almost all sectors of the Nigerian economy that had undergone deregulation. This is why deregulated Diesel and aviation fuel will never be cheap and available. This is why DSTV, MTN, Etisalat, etc can charge the masses very high tarrifs with very poor services. This is why deregulated NEPA is worse than regulated NEPA. I can go on and on. Before Thatcher deregulated or privatized the British economy, she made sure that the public run enterprises were running optimally and efficiently and very efficient regulatory bodies were in place.

Sorry have to go now. will try and continue later.

Thats the good thing about deregulation.

MTN better than NITEL
DSTV better than NTA
NESCO better than NEPA.

If you choose to use NITEL because MTN service is not good, go ahead. If you choose to watch NTA, go ahead. If you choose to use NEPA instead of solar and inverter, or NESCO go ahead.

NESCO is an independent power company in Jos that supplies 24 hours light to its customer

baralatie:

what do think affects the purchasing power of people?
let me say and assume that i understand that you don't want a cut throat price regime of capitalist businessmen.
1.this can be achieved by making oil refinery a free entry and free exit license.
2.you can controlled through a neutral body that monitors the price regime for end products excluding over head of whoever wants to do business.
3.encourage production and export of your refined products,

What stops Nigeria from selling only refined products or at least more refined product than crude. Let private individuals build refineries and start exporting the product. Is that also too hard?

shiftmarket:


What stops Nigeria from selling only refined products or at least more refined product than crude. Let private individuals build refineries and start exporting the product. Is that also too hard?

okay let us start with one refinery
1.the p.h refinery(1978) was built at a cost of $500 million

the question is how do you convince and investor to drop over $1 billion dollars to build and run a refinery knowing the following
a. it has a govt body with 40% stake in crude oil with free 450090 barrels to play with.
b.the govt body CONTROL importation,distribution and pricing of refined product
c.oil businesses is under Nnpc and its subsidiaries with statutory legal backing to overtake coys at a single notice.
d.other world oil and gas conglomerates,AP,Total, Mrs are buying and selling at subsidized rates.

if you are the investor you go come.

shiftmarket:


What stops Nigeria from selling only refined products or at least more refined product than crude. Let private individuals build refineries and start exporting the product. Is that also too hard?

It is hard. A refinery of 60000 barrel capacity will cost 3 billion dollars to build. It will cost more in Nigeria because of the cost of doing buisness in Nigeria is very high. Nigeria consumes 40 Million liters a day of PMS, we will need a 1.2 million bbl to satisfy our needs. Go figure. Have you looked at your income and budget? Where will the money come from? After completely satisfying our domestic consumption, then we can export.

shiftmarket:


What stops Nigeria from selling only refined products or at least more refined product than crude. Let private individuals build refineries and start exporting the product. Is that also too hard?

now if go for the option that the govt should take charge
1.to restart the refineries to production!
a.you will need at least 2 years of re- investment into those four refineries before they can come back online.guess how much it will cost.
b.you literarily have to SACK EVERYBODY and employ new skilled operatives to run and manage these facilities
c. don't forget the workers mentality when it COMES TO GOVT OWEND PROOERTIES,THEFT,VANDALISATION AND I DONT CARE ATTITUDE.
2.govt will still need to build extra two refineries. under 6 years concurrent toy before they can meet local demand and begin to export.

gohome:


This analysis has been done by so many Nigerians. It has been done by your neighbors, Ghana, Togo etc. It has been done by your felow African brothers like Kenya SA. The world bank too has done this shockingly. The Average Price (landing cost) of crude oil is +/- 1.1 dollars per liter. It can vary based on Transportation, grade of refine products and taxes.

The analysis was done using wrong parameters and premises. Nigeria own the basic raw materials for making petrol and petroleum products - Crude oil. 450,000 BPD was set aside to take care of domestic requirements, which is not subject to international market price. Nigeria OPEC quota is about 2.2millionBPD, our current production is put at about 2millionBPD, so nothing stops us from removing the 450,000BPD for local consumption. The actual cost of the 450,000BPD will just be exploration, drilling and transportation cost, which should not be more that $20 per barrel. Since we are unable to refine, nothing stops the government from contracting the refining of the refineries abroad and transporting the crude to the refineries and transporting the refined products back into the country.


In the alternative, nothing stops the Federal Government from putting the refineries in order. It is we the masses that makes excuses for government that government cannot run refineries. If we come together and demand that the refineries must work, the refineries will work.

If you do not deregulate, you wont build efficiency in Nigeria. Refining margines are very small with the volatile oil market you have. Big players like Shell BP Total etc would not build refineries if you do not let you government hands off. When Dangote's refinery is ready he will sell to Ghana, Togo and the likes if your Govt does not hands off. Fuel is not cheap. it is 220 Naira per liter. Get use to it.

That is where i disagree with you, deregulation does not lead to efficiency in an inefficient market. Yes, refining margins are very small, that is why i insist that petroleum products should not be left at the hands of the private sector - whether refining or marketing. Availability of cheap fuel must be a fundermental government responsibility as it affects every facet of our lives. Shell, BP, Total, etc cannot and should never be interested in refining, their expertise and interests lies with exploration and exploitation of crude not just in Nigeria but the world over. They are satisfied with the huge margins they make in the 40% they make from all sales of Nigerian oil. If Dangote refinery is ready he can negotiate with NNPC on how much he will buy crude oil, but he must never be subjected to international price since the crude is obtained locally. Besides that should not affect the 450,000 BPD that is meant for the Nigerian people.

Fuel can be cheap, Fuel is very cheap in UAE and most of the Arab countries. Nigerians cannot afford to buy petrol at N220/litre. The cost of transportation of people and goods would sky rocket, most homes burn about 4 litres a day in their generators to get a few hours of electricity. Most businesses from telecommunications to manufacturing to banking depends on diesel. The inflation would be unbearable. The pressure on the Naira would be tremendrous. Devaluation of the Naira would make nonsense of the N220 in no time, as we buyimport our fuel in Dollars. All these while minimum wage will still remain at N18,000.

If you feel we should be paying N220/litre for petrol, how much do you think the minimum wage in Nigeria should be? And how much do you think the various governments can afford?

Thats the good thing about deregulation.

MTN better than NITEL
DSTV better than NTA
NESCO better than NEPA.

If you choose to use NITEL because MTN service is not good, go ahead. If you choose to watch NTA, go ahead. If you choose to use NEPA instead of solar and inverter, or NESCO go ahead.

NESCO is an independent power company in Jos that supplies 24 hours light to its customer

I do not know about NESCO, but Ikeja Distribution Company is horrible. The power situation is horrible and they still have horrible practices like the old NEPA, like high bills, non supply of meters, carrying of ladders up and down, etc.

Like i said earlier critical industries like power and education should not be left in the control of the private sector. It is even a threat to National Security.

baralatie:

now if go for the option that the govt should take charge
1.to restart the refineries to production!
a.you will need at least 2 years of re- investment into those four refineries before they can come back online.guess how much it will cost.
b.you literarily have to SACK EVERYBODY and employ new skilled operatives to run and manage these facilities
c. don't forget the workers mentality when it COMES TO GOVT OWEND PROOERTIES,THEFT,VANDALISATION AND I DONT CARE ATTITUDE.
2.govt will still need to build extra two refineries. under 6 years concurrent toy before they can meet local demand and begin to export.

Maybe I was not clear enough. I will rephrase. Grant licenses to companies that want to build refineries in Nigeria. One of the challenges I have heard is that until they are assured that they can sell their product at the prevailing market price they can not build refineries. So why not allow them build and give assurances that if they chose to sell to outside markets that they are free to.

Refineries do not have to be expensive. If u open up the market, 2 of us can come together and form an alliance and build a small capacity refinery as our power can carry and produce maybe 2 tankers a day and have a customer base of 2 or 3 petrol stations. Some other people do same while DPR monitors us strictly to ensure we comply with industry standard safety rules.

All those illegal refineries are already doing it. How do they do it. It can be remodelled and setup.properly.

gohome:


It is hard. A refinery of 60000 barrel capacity will cost 3 billion dollars to build. It will cost more in Nigeria because of the cost of doing buisness in Nigeria is very high. Nigeria consumes 40 Million liters a day of PMS, we will need a 1.2 million bbl to satisfy our needs. Go figure. Have you looked at your income and budget? Where will the money come from? After completely satisfying our domestic consumption, then we can export.

Maybe I was not clear enough. I will rephrase. Grant licenses to companies that want to build refineries in Nigeria. One of the challenges I have heard is that until they are assured that they can sell their product at the prevailing market price they can not build refineries. So why not allow them build and give assurances that if they chose to sell to outside markets that they are free to.

Refineries do not have to be expensive. If u open up the market, 2 of us can come together and form an alliance and build a small capacity refinery as our power can carry and produce maybe 2 tankers a day and have a customer base of 2 or 3 petrol stations. Some other people do same while DPR monitors us strictly to ensure we comply with industry standard safety rules.

All those illegal refineries are already doing it. How do they do it. It can be remodelled and setup.properly

wirinet:


The analysis was done using wrong parameters and premises. Nigeria own the basic raw materials for making petrol and petroleum products - Crude oil. 450,000 BPD was set aside to take care of domestic requirements, which is not subject to international market price. Nigeria OPEC quota is about 2.2millionBPD, our current production is put at about 2millionBPD, so nothing stops us from removing the 450,000BPD for local consumption. The actual cost of the 450,000BPD will just be exploration, drilling and transportation cost, which should not be more that $20 per barrel. Since we are unable to refine, nothing stops the government from contracting the refining of the refineries abroad and transporting the crude to the refineries and transporting the refined products back into the country.


In the alternative, nothing stops the Federal Government from putting the refineries in order. It is we the masses that makes excuses for government that government cannot run refineries. If we come together and demand that the refineries must work, the refineries will work.





That is where i disagree with you, deregulation does not lead to efficiency in an inefficient market. Yes, refining margins are very small, that is why i insist that the refining of petroleum products should not be left at the hands of the private sector - whether refining or marketing. Availability of cheap fuel must be a fundermental government responsibility as it affects every facet of our lives. Shell, BP, Total, etc can and should never be interested in refining, their expertise and interests lies with exploration and exploitation of crude not just in Nigeria but the world over. They are satisfied with the huge margins they make in the 40% they make from all sales of Nigerian oil. If Dangote refinery is ready he can negotiate with NNPC on how much he will buy crude oil, but he must never be subjected to international price since the crude is obtained locally. Besides that should not affect the 450,000 BPD that is meant for the Nigerian people.

Fuel can be cheap, Fuel is very cheap in UAE and most of the Arab countries. Nigerians cannot afford to buy petrol at N220/litre. The cost of transportation of people and goods would sky rocket, most homes burn about 4 litres a day in their generators to get a few hours of electricity. Most businesses from telecommunications to manufacturing to banking depends on diesel. The inflation would be unbearable. The pressure on the Naira would be tremendrous. Devaluation of the Naira would make nonsense of the N220 in no time, as we buyimport our fuel in Dollars. All these while minimum wage will still remain at N18,000.

If you feel we should be paying N220/litre for petrol, how much do you think the minimum wage in Nigeria should be? And how much do you think the various governments can afford?



I do not know about NESCO, but Ikeja Distribution Company is horrible. The power situation is horrible and they still have horrible practices like the old NEPA, like high bills, non supply of meters, carrying of ladders up and down, etc.

Like i said earlier critical industries like power and education should not be left in the control of the private sector. It is even a threat to National Security.

Thanks for your post I think you even presented my thoughts backed with more facts.

shiftmarket:

Maybe I was not clear enough. I will rephrase. Grant licenses to companies that want to build refineries in Nigeria. One of the challenges I have heard is that until they are assured that they can sell their product at the prevailing market price they can not build refineries. So why not allow them build and give assurances that if they chose to sell to outside markets that they are free to.

Refineries do not have to be expensive. If u open up the market, 2 of us can come together and form an alliance and build a small capacity refinery as our power can carry and produce maybe 2 tankers a day and have a customer base of 2 or 3 petrol stations. Some other people do same while DPR monitors us strictly to ensure we comply with industry standard safety rules.

All those illegal refineries are already doing it. How do they do it. It can be remodelled and setup.properly

My dear it is what it is. Wishes are not horses. A cheap 60K capacit refinery will cost 3 billion dollars. Who do you think will invest 3 billion dollars in refinery with the playing field we have?

wirinet:


The analysis was done using wrong parameters and premises. Nigeria own the basic raw materials for making petrol and petroleum products - Crude oil. 450,000 BPD was set aside to take care of domestic requirements, which is not subject to international market price. Nigeria OPEC quota is about 2.2millionBPD, our current production is put at about 2millionBPD, so nothing stops us from removing the 450,000BPD for local consumption. The actual cost of the 450,000BPD will just be exploration, drilling and transportation cost, which should not be more that $20 per barrel. Since we are unable to refine, nothing stops the government from contracting the refining of the refineries abroad and transporting the crude to the refineries and transporting the refined products back into the country.


In the alternative, nothing stops the Federal Government from putting the refineries in order. It is we the masses that makes excuses for government that government cannot run refineries. If we come together and demand that the refineries must work, the refineries will work.





That is where i disagree with you, deregulation does not lead to efficiency in an inefficient market. Yes, refining margins are very small, that is why i insist that petroleum products should not be left at the hands of the private sector - whether refining or marketing. Availability of cheap fuel must be a fundermental government responsibility as it affects every facet of our lives. Shell, BP, Total, etc cannot and should never be interested in refining, their expertise and interests lies with exploration and exploitation of crude not just in Nigeria but the world over. They are satisfied with the huge margins they make in the 40% they make from all sales of Nigerian oil. If Dangote refinery is ready he can negotiate with NNPC on how much he will buy crude oil, but he must never be subjected to international price since the crude is obtained locally. Besides that should not affect the 450,000 BPD that is meant for the Nigerian people.

Fuel can be cheap, Fuel is very cheap in UAE and most of the Arab countries. Nigerians cannot afford to buy petrol at N220/litre. The cost of transportation of people and goods would sky rocket, most homes burn about 4 litres a day in their generators to get a few hours of electricity. Most businesses from telecommunications to manufacturing to banking depends on diesel. The inflation would be unbearable. The pressure on the Naira would be tremendrous. Devaluation of the Naira would make nonsense of the N220 in no time, as we buyimport our fuel in Dollars. All these while minimum wage will still remain at N18,000.

If you feel we should be paying N220/litre for petrol, how much do you think the minimum wage in Nigeria should be? And how much do you think the various governments can afford?



I do not know about NESCO, but Ikeja Distribution Company is horrible. The power situation is horrible and they still have horrible practices like the old NEPA, like high bills, non supply of meters, carrying of ladders up and down, etc.

Like i said earlier critical industries like power and education should not be left in the control of the private sector. It is even a threat to National Security.

450,000 for domestic consumption does not fall from the sky. You have to produce it. It cost 30 dollars per bbl to produce it. Depending on the oil price, you will likely lose 9 billion dollars a year. This is minus the so called subsidy. With an infrastructural decay that needs hundreds of billions to solve, you want to pay subsidy? You are in a country where the government expenditure per person to tax is the highest in the world and you want to still pay subsidy. Your economy (mass transit, banks and industries) runs with diesel not PMS.

What is the population of the UAE? You are 170 million boy. It is not affordable.

Your budget is a mere 4 trillion. Guess what the budget of New York City with 8.9 million people alone is 15 trillion. Your government is poor, it needs money from anywhere. Help it.

Help it create a level playing field to unlock new opportunities. If we show investors we can buy fuel at 200 to 250 naira a liter, you will see them come. We then will be talking about 200K direct jobs easy and another 5 million indirect jobs.

Your country is poor. You need to start paying 30% tax so your government can run your country.

Buhari will not pay a dime on PMS subsidy. Petrol will sell at 1.1 dollars per liter. Unless he wants to throw away 9 billion dollars (465000 bbl) another form of subsidy. You won't die. My grandma in the village buys petro at 210 per liter, food are transported via diesel, mass transit is via diesel, industry via diesel. Nothing will happen

shiftmarket:


Maybe I was not clear enough. I will rephrase. Grant licenses to companies that want to build refineries in Nigeria. One of the challenges I have heard is that until they are assured that they can sell their product at the prevailing market price they can not build refineries. So why not allow them build and give assurances that if they chose to sell to outside markets that they are free to.

Refineries do not have to be expensive. If u open up the market, 2 of us can come together and form an alliance and build a small capacity refinery as our power can carry and produce maybe 2 tankers a day and have a customer base of 2 or 3 petrol stations. Some other people do same while DPR monitors us strictly to ensure we comply with industry standard safety rules.

All those illegal refineries are already doing it. How do they do it. It can be remodelled and setup.properly.

God bless Nigeria!

gohome:


450,000 for domestic consumption does not fall from the sky. You have to produce it. It cost 30 dollars per bbl to produce it. Depending on the oil price, you will likely lose 9 billion dollars a year. This is minus the so called subsidy. With an infrastructural decay that needs hundreds of billions to solve, you want to pay subsidy? You are in a country where the government expenditure per person to tax is the highest in the world and you want to still pay subsidy. Your economy (mass transit, banks and industries) runs with diesel not PMS.

What is the population of the UAE? You are 170 million boy. It is not affordable.

Your budget is a mere 4 trillion. Guess what the budget of New York City with 8.9 million people alone is 15 trillion. Your government is poor, it needs money from anywhere. Help it.

Help it create a level playing field to unlock new opportunities. If we show investors we can buy fuel at 200 to 250 naira a liter, you will see them come. We then will be talking about 200K direct jobs easy and another 5 million indirect jobs.

Your country is poor. You need to start paying 30% tax so your government can run your country.

Buhari will not pay a dime on PMS subsidy. Petrol will sell at 1.1 dollars per liter. Unless he wants to throw away 9 billion dollars (465000 bbl) another form of subsidy. You won't die. My grandma in the village buys petro at 210 per liter, food are transported via diesel, mass transit is via diesel, industry via diesel. Nothing will happen

@gohome you have spoken so much to the gladness of my innermost hearts. Don't spend all your energy talking to these fellows. Even our Lord Jesus said so..."you will always have the poor with you".

Some uneducated fellows whip up sentiments with "poor masses". But these poor masses where alive and doing fine buying a litre of fuel for 1000ngn in Lagos recently.

AWAY WITH THIS SUBSIDY!

Once more, you have spoken well...I read every letter of your comments!

rolchi:


@gohome you have spoken so much to the gladness of my innermost hearts. Don't spend all your energy talking to these fellows. Even our Lord Jesus said so..."you will always have the poor with you".

Some uneducated fellows whip up sentiments with "poor masses". But these poor masses where alive and doing fine buying a litre of fuel for 1000ngn in Lagos recently.

AWAY WITH THIS SUBSIDY!

Once more, you have spoken well...I read every letter of your comments!

Thank you. I am getting tired already. Because 9 million people with a budget the same as yours can afford it doesn't mean we can.

The UAE is 8 million migrant and 1.4 millions citizens. Budget is in excess of 4 trillion Naira. Economy is so diversed that only 4% of oil revenue go to Dubai city budget. If AkwaIbom gets 4 trillion annually, let me see how it won't be Dubai with free fuel.

i really do not know how to explain to these guys that we cannot afford it. No country with a population of 150 million plus pay subsidy on PMS.

Let them keep hiding under masses. Borrowing money to enrich few rich men. Sometimes I feel like disowning this country. People you try to help are the same people killing you.

We really need God blessings

Sibrah:
It all depends of the reputation of the government in charge. If issue of systemic corruption can be tackled by the sitting government then subsidy can go. That's to say If for example Buhari admin is ready to face the challenges of Diesel selling for same rate it sold for in 2012 Jan, when crude price was more than double it is now, then he can remove. If not removal of subsidy will only be a licence for the marketers to form a cabal and be the new government of fuel.

Its a horrible idea to subsidies petrol for any country wit a population of over 100 million, its bloody expensive.

Russia is highest producer of crude oil worldwide, yet 1 litre of fuel goes for 142 in their country.

onegig:
Another person drawn from the same cloth. Ok. Let me try and explain like you are 5.

Most of us or majority of Nigerians who protested against the subsidy removal didn't do it because they felt it was wrong. They protested the basic fact that.

First, Nigeria does not have any excuse to be importing refined petroleum products as we have refinaries only that the government was inept to manage it. Question was, why would the common man have to pay for government's uselessness and mistakes?

Secondly, the figures were bogus and shrouded in corruption. If anything the price and quantity was manipulated and if facts were to be followed the outrageous amount the FG was banding around then was a farce.

Third., we never trusted the government to do what was right. The jonathan administration was corrupt and it was very obvious even before the removal of the subsidy. And we were right. What do we have to show for the trillions saved from the partial removal since 2012? Where is the turnaround maintenance we were promised? Where are the roads? Where are the increased investment? If we had allowed the full removal, aren't we going to be left disappointed at the end just like we are now.

Basic fact is. The government wanted to remove the subsidy then not because they had plans for any developmental project for Nigerians but like the leprous and insatiable thief that they are they couldn't just keep their eyes of that cookie jar.

Are we justified to have protested? Very well justified.


Subsidy removal is a nice idea but not one that should be posited by crooks and never do wells.

GEJs regime was not corrupt, Its Nigeria that is corrupt.

gohome:


The subsidy issue is not shrouded in mystery. You have chosen to be ignorant. The average price of PMS around the world is about 1.1 dollars per liter. That's 220 Naira per liter. Poorer countries pay this. We produce 2.2 million barrels per day, rich countries like Russia US, China, India UK Brazil that produces up to 5 times more oil than we do pay this. Poorer countries like Haiti Angola Gabon also pay this. Even poorer and remote villages in Nigeria, burutu Nembe, mambila pay 200 plus for a liter. So what is the problem with it all gone? I'm 2012, sanusi and Iwealla with Allison went round TV stations explaining the steps to fully deregulate the downstream sector, no one listened. 65 Naira or nothing was the chant. I remember when Sanusi said the best way to put a fire out is to eliminate the source of the fire.

It was shame that GEJ and his ministers did not have the political tenacity to completely do way with this fire. Buhari seems to have it. He will remove it, fuel will sell at 180-220 per liter and there is nothing you will do.

are you sure? Will Nigerians cope with it....they love complaining alot

gohome:


450,000 for domestic consumption does not fall from the sky. You have to produce it. It cost 30 dollars per bbl to produce it. Depending on the oil price, you will likely lose 9 billion dollars a year. This is minus the so called subsidy. With an infrastructural decay that needs hundreds of billions to solve, you want to pay subsidy? You are in a country where the government expenditure per person to tax is the highest in the world and you want to still pay subsidy. Your economy (mass transit, banks and industries) runs with diesel not PMS.

What is the population of the UAE? You are 170 million boy. It is not affordable.

Your budget is a mere 4 trillion. Guess what the budget of New York City with 8.9 million people alone is 15 trillion. Your government is poor, it needs money from anywhere. Help it.

Help it create a level playing field to unlock new opportunities. If we show investors we can buy fuel at 200 to 250 naira a liter, you will see them come. We then will be talking about 200K direct jobs easy and another 5 million indirect jobs.

Your country is poor. You need to start paying 30% tax so your government can run your country.

Buhari will not pay a dime on PMS subsidy. Petrol will sell at 1.1 dollars per liter. Unless he wants to throw away 9 billion dollars (465000 bbl) another form of subsidy. You won't die. My grandma in the village buys petro at 210 per liter, food are transported via diesel, mass transit is via diesel, industry via diesel. Nothing will happen

Yes, 450,000 for domestic consumption will not fall from the sky, it has to be produced. Are you telling me that NNPC cannot produce 450,000BPD for domestic production, either solely or with partnership with local or foreign companies. You people talk as if NNPC and Nigerian government officials just receive salary and allowances for sleeping in their offices. Some local oil exploration companies produce well over 100,000BPD, for example T Y Danjuma's SAPETRO produces over 50,000 barrels per day, so why cant NNPC produce N450,000BPD?

I doubt it can cost up to $30 to extract Nigeria's crude from the ground, Oil prices fell to just below $40 a few years ago, so it would be absurd to suggest that the government and oil companies will only share $10. Furthermore until this new democratic dispensation, crude prices never went beyond $30/barrel. Under Abacha government it hovered around $16. It even fell then as low as $12/barrel.

How can producing 450,000 for domestic production lead to $9billon a year loss? Your argument is very weak. The 450,000 does not affect our OPEC quota, so it is not gotten from our export quota. We are even finding it hard meeting our export quota of 2.2millionBPD due to having difficulty in finding new markets as the US which used to buy 40% of our production has stopped buying from us. So what happens if nobody buys our crude oil? are you going to see that as a loss? Iran has been under oil sanction for over a decade and they are surviving and even building nuclear plants, so what are you talking about? We should be investing in increasing our oil production to over 3millionBPD, after selling our export quota, the rest should be refined for domestic consumption and export.

Please explain what you mean by "You are in a country where the government expenditure per person to tax is the highest"I do not know what expenditure the government spend on me. I provide my own water, i provide my own security, i provide schooling for my children, i do not get housing or food subsidy. To make thinks worse, i pay 5% vat on all goods and service, i paid 45% import duty on my car, i pay import tax on every thing i consume, i pay company tax, income tax, local government taxes. The government does not give me any thing free of charge, even for driver's licence (a mare ID card), the government charged me over N12,000.


You avoided my questions about the effects a N220 price of fuel would have on inflation and the value of the Naira. If you study all past petroleum increases, the arguments had always been the same, but the economic effects had been a reverse of expectations. Fuel increases always lead to inflation and devaluation of the naira, rendering the increase useless in the first place. At present our manufacturing sector and service sector are groaning under his production costs, increasing energy cost will finally kill off the few industries we have left. The social effect of high energy cost induced inflation is better imagined that experienced. NLC would seek wage increases, Doctors would seek an increase, in fact government would not be able to cope with increased wage demands.

The state of New York's budget is N15 trillion because a substantial part of its 8.9 million population is rich. Nigeria is poor because a substantial percentage of the population is poor. You cannot have a rich country when its people are poor, this is because the wealth of a people lies with its people and not its natural resources. Nigeria is poor because you and the government believes the country can be rich by selling crude oil alone and disregard its people. No amount of crude oil can make Nigeria rich, Nigeria's actual wealth lies in its 170million population. A high energy price would further impoverish the people thereby further impoverishing Nigeria.