erico2k2:

I asked three basic question has nothing to do with GEJ or PMB.from your submission I can state that yoy don't know what the concept of su side is.no offence meant with all due respect.most people know the meaning but not the concept.Let me draw you near.Subsidy is the only thing the govt seem to give us without cost to us but to them.Nothing else so U want that taken away?
If the subsidy is removed we will buy petrol at above N200.they import not from Africa but Asia ie Saudi or south America ie venuzuella. Now the cost is $1 to fill your tank there subsidy in venuzuella is %70.@ production not importation so in theory the production cost there would be close to $0.50.in today's money that N100.by the time it gets here it would be X 4.so your guess is as good as mine only if the fg fix the refineries then Yeh they could remove the so called subsidy mayB cost of production might be N120 and they can sell N180 including VAT

Dont say i dont know just because i didnt answer your question the way you want it.

What is subsidy in relation to petrol?

Assuming the total cost to deliver petrol from a refinery in India to my car's petrol tank including profit and transportation is N100/L. If government instructs the marketer to sell to me at N87, N13 will be paid to the marketer as subsidy on my behalf. N13 is a free gift per litre to any one buying petrol orderwise called subsidy.

The problem comes in when i buy 50L in which government needs to pay the marketer N650 as balance of his money but the marketer claims i bought 100L. Government must now pay N1,300 because government's monitoring officals either failed to do their jobs of monitoring what is actually delivered or decided to partake in the fraud. Its not easy to properly monitor and prevent the fraud, it is best to remove the subsidy since N13 wont kill me. After all subsidy benefits the rich more than the poor. A rich man has more cars and more trips to make. He runs more fuel consuming vehiles with full loads having disregard to economy. A rich man may require 50L per day but certainly not a poor man that doesnt have a car. That means the rich man can collect N650 worth of fuel free of charge daily and the poor man that needs such incentives or discount cant claim it. The rich man flies but the poor man travels by road. Is'nt it better for the poor man if the roads are fixed with subsidy funds than on fuel where the rich has more purchasing power.

Lastly, landing cost of petrol was recently calculated to be N86.50k. If we pay the same amount at the pump, how much is subsidy? Zero. We all know the value fluctuates + or - N86.50. The template now is that if the landing cost drops to say N85.50, we still pay N86.50 and they now have negative N1 subsidy which is saved for future situations where subsidy will be positve N1 and government pays with the savings.

In this case government doesnt take money from its coffers to fund subsidy. The aim is to give the pump price a little stability instead of changing price every other week. We will now see more frequent pump price change than before. Its good for me ass long as government agents dont use the subsidy as a means of fraud and rich people benefit from it more than the poor.

This will continue until such a time our refineries can produce to our consumption rate. The cost too will significantly drop since we will not pay for off shore transportation or taxes involved or foreign exchange. Government can even decide Nigerians pay cost of refining, local transportation (cheap if by pipeline) and profit for pumping stations.

Analyst believe that there may not be a significant increase to the price of crude in 2016, so we should expect that for now the pump price will fluctuate witin its present range.

adanny01:


Dont say i dont know just because i didnt answer your question the way you want it.

What is subsidy in relation to petrol?

Assuming the total cost to deliver petrol from a refinery in India to my car's petrol tank including profit and transportation is N100/L. If government instructs the marketer to sell to me at N87, N13 will be paid to the marketer as subsidy on my behalf. N13 is a free gift per litre to any one buying petrol orderwise called subsidy.

The problem comes in when i buy 50L in which government needs to pay the marketer N650 as balance of his money but the marketer claims i bought 100L. Government must now pay N1,300 because government's monitoring officals either failed to do their jobs of monitoring what is actually delivered or decided to partake in the fraud. Its not easy to properly monitor and prevent the fraud, it is best to remove the subsidy since N13 wont kill me. After all subsidy benefits the rich more than the poor. A rich man has more cars and more trips to make. He runs more fuel consuming vehiles with full loads having disregard to economy. A rich man may require 50L per day but certainly not a poor man that doesnt have a car. That means the rich man can collect N650 worth of fuel free of charge daily and the poor man that needs such incentives or discount cant claim it. The rich man flies but the poor man travels by road. Is'nt it better for the poor man if the roads are fixed with subsidy funds than on fuel where the rich has more purchasing power.

Lastly, landing cost of petrol was recently calculated to be N86.50k. If we pay the same amount at the pump, how much is subsidy? Zero. We all know the value fluctuates + or - N86.50. The template now is that if the landing cost drops to say N85.50, we still pay N86.50 and they now have negative N1 subsidy which is saved for future situations where subsidy will be positve N1 and government pays with the savings.

In this case government doesnt take money from its coffers to fund subsidy. The aim is to give the pump price a little stability instead of changing price every other week. We will now see more frequent pump price change than before. Its good for me ass long as government agents dont use the subsidy as a means of fraud and rich people benefit from it more than the poor.

This will continue until such a time our refineries can produce to our consumption rate. The cost too will significantly drop since we will not pay for off shore transportation or taxes involved or foreign exchange. Government can even decide Nigerians pay cost of refining, local transportation (cheap if by pipeline) and profit for pumping stations.

Analyst believe that there may not be a significant increase to the price of crude in 2016, so we should expect that for now the pump price will fluctuate witin its present range.

Ok u still did not give any answer to the question n ways let me ask where did you hear that the landing cost of petrol was N86.50? Can I ask from.what country you think you can land petrol at that price?let me keep it short.I'm hoping ur answer will be short and straight to the point.U can ask me any question too.

erico2k2:

Ok u still did not give any answer to the question n ways let me ask where did you hear that the landing cost of petrol was N86.50? Can I ask from.what country you think you can land petrol at that price?let me keep it short.I'm hoping ur answer will be short and straight to the point.U can ask me any question too.

Check picture below. Row no. 25 Column Naira/L pppra.gov.ng/pricing-template-pms-2/

Any questions?

Most of our imports is from india. Coincidentally most of the crude oil export is to india.

adanny01:


Check picture below. Row no. 25 Column Naira/L pppra.gov.ng/pricing-template-pms-2/

Any questions?

Most of our imports is from india. Coincidentally most of the crude oil export is to india.

Great stuff now let's ask ourselves what's the pump price in India?it was 59 rupees last time I checked so in line with global market it's N176. Lets assume they remove VAT as its export @ %20 say minus N34 we are left with approx N130 something. smell scam yet?
Check thus link and pic

erico2k2:

Great stuff now let's ask ourselves what's the pump price in India?it was $1 last time I checked so in line with global market it's N200.smell scam yet?

You have a point there.

I would only guess that since majority of Nigerian crude ends up in India, they must have reached an agreement. An agreement such that Crude is shipped to India for refining and the cost of refining is paid in equal amount of crude. It is also possible that other range of petroleum products from the crude is kept by the indians. In that case India actually buys its own crude from Nigeria but Nigeria does'nt pay for crude. They just ship to refine, pay and ship back the products. That means India's retail price will include cost of crude oil while our portion does not.

Moreso, theirs will include VAT and alot of other expenses we dont have. You see from the template, there are 3 types of taxes and highway maintenance charges but all with zero charge. India could have charged those and even more.

My only hope for now is for Nigeria to build new refinaries and maintain current ones before crude oil prices go up again.

adanny01:


You have a point there.

I would only guess that since majority of Nigerian crude ends up in India, they must have reached an agreement. An agreement such that Crude is shipped to India for refining and the cost of refining is paid in equal amount of crude. It is also possible that other range of petroleum products from the crude is kept by the indians. In that case India actually buys its own crude from Nigeria but Nigeria does'nt pay for crude. They just ship to refine, pay and ship back the products. That means India's retail price will include cost of crude oil while our portion does not.

Moreso, theirs will include VAT and alot of other expenses we dont have. You see from the template, there are 3 types of taxes and highway maintenance charges but all with zero charge. India could have charged those and even more.

My only hope for now is for Nigeria to build new refinaries and maintain current ones before crude oil prices go up again.

Great.Now as yoy can see it's imposible to just import fuel at stated cost. An I have a friend of mine said out of that pump price approx 30rupee is tax.The refinaries in India are private not state owned so that swop deal won t work.I think they have their own refineries where they refine and repatriate the products or they declare more than lifted. So my friend the SCAM is so massive govt shud focus on building not fixing .A new refinary .then they can subsidise on cost of production not importation. So U see in theory they cannot remove the subsidy it's news of distraction. We ain't going to get anything cheap.

erico2k2:

Great.Now as yoy can see it's imposible to just import fuel at stated cost. An I dan friend of mi e said out of that pump price approx 30rupee is tax.The refinaries in India are private not state owned so that swop deal won t work.I think they have their own refineries where they refine and repatriate the products or they declare more than lifted. So my friend the SCAM is so massive govt shud focus on building not fixing .A new refinary .then they can subsidise on cost of production not importation. So U see in theory they cannot remove the subsidy it's news of distraction. We ain't going to get anything cheap.

What i want you to agree is that Nigeria buys petrol from India and sell to Nigerians for N86.50k without paying a kobo as subsidy. That is a fact they have established. How they were able to buy at the rate they do is a matter of research which neither me or you know right now. The best is to hope we get our refineries before crude oil will go back up.

For long we know the always lift more crude than the records show. That may be this administration's next point of call.

adanny01:


What i want you to agree is that Nigeria buys petrol from India and sell to Nigerians for N86.50k without paying a kobo as subsidy. That is a fact they have established. How they were able to buy at the rate they do is a matter of research which neither me or you know right now. The best is to hope we get our refineries before crude oil will go back up.

For long we know the always lift more crude than the records show. That may be this administration's next point of call.

Hey I agree with you whole heartedly. I do have relations and friends who are multi due to fuel importation I'm afraid and I'm from the Delta and very close to the creeks so I know what they are doing.if yoy check your figures u will know it do not add up even if they buy at that rate.how about logistics ?

anonimi:



You may wish to be educated by the bro below =>

Dumbo. I asked for the OP.

Blizzy9ja:
You're out of ur mind... can u pls compare the price of a barrel of crude oil by den and now?

And what did they do with the surplus earnings?

Don't let your hate kill you.

anonimi:


Buhari said so:


www.nairaland.com/attachments/2589504_subsidy2_jpeg57ea79bc1f8758353f00f8db1d53dbf1

You can't diff btw the 2 statements. Haba! When one say he doesn't know what something is, and a fellow like you likened that to mean that thing doesn't exist, are they the same thing? Answer this pls.

ISpiksDaTroof:
And what did they do with the surplus earnings?

Don't let your hate kill you.

Price of fuel fluctuates. So when it goes below N86.50 say N85.50, N1 is saved for the period it remains above the official.

Since it fluctuates, there is the possibility it will go above the official say N87.50. The deficit is funded by the funds saved during surplus. When the surplus funds is exhausted and the price is still at N87.50, the official price is adjusted up. When official price remains too long on the low, the price is adjusted down. That way, govt dont put money from their pockets.