jamace:
A cabal is siphoning Nigeria money in the name of subsidy. Buhari needs to personally investigate this subsidy of a thing. I suspect a great fraud going on.

Wake up
Can you investigate yourself and the cronies you positioned to do your dirty deals while you wear the integrity cloak for the camera

Mcreloaded:
Excuses being made in advance to cover up the planned looting from the impending war between Iran and USA that will make oil prices go up.
They forgot they told Nigerians that consumption of oil has reduced since the border closure.
The question now is, if the consumption of oil has reduced because of border closure ...........

What's reduced is the smuggling of oil across the border...to the tune of 6 million litres of fuel per day...out of about 50-70million liters of fuel per day...which while welcome, isn't enough in savings.

But the border closure is being used as a means to avoid the alternative, removing fuel subsidy, which would actually end smuggling across the broder.

(I mean, I buy subsidesed Nigerian fuel at N140-5 NAIRA in Nigeria, head to Niger, Benin or Cameoon and sell at N300...their offical price...and above...that's a decent profit there.)

chloride6:
What a moronic article...

Subsidies increase but oil revenue increases faster...

And much of the increase in oil revenue goes to paying off debts taken.

That's what it is like to be an oil dependent country....oil price crashes, you take on more loans, then the oil price rises, and you pay off the loans while taking on more loans.

The only oil producing countries that can survive such a mess are ocuntries like Saudi Arabia, who produce five times more oil than Nigeria, and have a population of less than 15 million people.

Gwilym:


I don't support this government, or the ones before it, yet have been convinced that subsidy has to go since 2011...when GEJ attempted to remove it...because the arguments made sense.

I mean, the Emir of Kano is probably not on GEJ's BFF list...yet he supported the subsidy removal then or now.

The truth is, if you were in business, and you bought goods at N1000 and sold at N1500...and government steps in and tells you to sell at N750...and pays you subsidy of N250...how would you make a profit.?

I mean, why set up a refinery, refine fuel at N150 and above...and then sell it at N140??

That's how we have been doing our fuel industry. Add the corruption and the mess around subsidy payments...and the whole problem is compelte.

It is a fraud. When crude was selling at $100 per barrel, the pump prise was put at #140. Crude is selling at $70 and yet PMS is selling at #145 yet someone is still talking about subsidy. Even if PMS was selling at #170, they will still talk about subsidy.

Awoo88:

It is a fraud. When crude was selling at $100 per barrel, the pump prise was put at #140. Crude is selling at $70 and yet PMS is selling at #145 yet someone is still talking about subsidy. Even if PMS was selling at #170, they will still talk about subsidy.

1.At $100...we had enough dollars flowing in to keep the value of the naira high...that's why the pump price was at N140.

2.At $70, the value of the naira has fallen, because we have a reduction in the flow of dollars...hence fuel is at N145.

(In fact , N145 is the same in value as N65 was in 2008...when oil was above $140 per barrel for a few months...).

3.The truth is, subsidy exists because it is poltically expident. If there was no subsidy, fuel would cost N200-300....so that refining and importation costs would be covered adequantely, and businessmen make a profit to be able to pay workers a decent wage, and build a house for the wife, the mistress, and the side chick. And even if new refinereis were built...the owner has to pay off loans, contractors, etc...and make a decent profit..so fuel stays above N200-300.

(Even in the US that has acheived self sufficeincy in fuel production, fuel is about N350 per liter there..if not higher)

Gwilym:


What's reduced is the smuggling of oil across the border...to the tune of 6 million litres of fuel per day...out of about 50-70million liters of fuel per day...which while welcome, isn't enough in savings.

But the border closure is being used as a means to avoid the alternative, removing fuel subsidy, which would actually end smuggling across the broder.

(I mean, I buy subsidesed Nigerian fuel at N140-5 NAIRA in Nigeria, head to Niger, Benin or Cameoon and sell at N300...their offical price...and above...that's a decent profit there.)

On subsidy removal you are very right as Nigeria cannot grow subsidising oil at this rate.
Then whats the solution, upgrade our customs, make our refineries work, remove oil subsidy etc.
The mistake was made when the elite and politicians and labour ganged up against Jonathan when he tried removing subsidy and as such how can Nigerians believe our present government that was against oil subsidy removal then to now want to remove the same subsidy.
Lets be patient and see what effect Dangote refinery will have on this issue.
We know subsidy is a scam

Mcreloaded:


On subsidy removal you are very right as Nigeria cannot grow subsidising oil at this rate.
Then whats the solution, upgrade our customs, make our refineries work, remove oil subsidy etc.
The mistake was made when the elite and politicians and labour ganged up against Jonathan when he tried removing subsidy and as such how can Nigerians believe our present government that was against oil subsidy removal then to now want to remove the same subsidy.
Lets be patient and see what effect Dangote refinery will have on this issue.
We know subsidy is a scam

I don't think Dangote would have much effect. The guy has loans to pay, and he has to pay his employees in the refienry a decent salary..and then there is the refienry maintenance costs....

So, not much effect, am afraid.

Expect more of these kind of stories till they remove fuel subsidy and the money gets diverted into govt officials pockets.

Gwilym post=85604799u:


They would shout, and yes, in the short term, food prices would rise.

But the thing is, Nigeria is not really earning enough cash. And since 2012...and even since 2017...oil has to be above $120 before we can even make a decent enough income



The problem is, it costs at least N180 (estimates)...to refine one liter of fuel. Would you build a refinery, refine fuel at N180, and sell to marketers at N140...and all you get is N40 from government for every liter of fuel sold in lieu of profit? Or would you prefer a government that allows you to refine fuel at N180 and sell at N200 and above...and make a decent profit that enables you to pay workers decent salaries, and keep the refinery well maintained and pay for upgrades where needed.??

I mean, you see why out of 61 licneces issued since 2011...less than 5 are buidling something.

The issue is subsidy would force a refinery owner to run at a loss. That's why apart from Dangote and a few others...no one is building refinereis, and why NNPC does not have the money to build new refineries.

You are right, but few peoples opinions don't count like the masses, it's because you understand how the subsidy issue works that why you won't mind if it's remove, what about those that don't understand the subsidy thing?
Secondly on NNPC, why they can't build new refineries? Let break it down on a lay mans way or the way Nigerians will take it, if nnpc says they want to build new refineries in ph, marinated and warri let say the double amount dangote spent on his refineries what will you think Nigerians will say?
If Nigerian as allowed obasanjo sell the refinery then things won't be like these, hope you remembered the outcry then? Again lot of people are making money from these scam down to the filling station. Imagine thou I won't mention my company's name, they bring in let say 5, 000 MT of pms but the bill of laden says will say 15,000 mt of pms the thief dpr guy Will sign the document after collecting his share, npa will collect, naval will collect, nupeng too and my company still makes billions, filling stations too will scam there's, hope you know filling stations sells below the normal price, when you calculate the cost of buying product and transportation they are a loose, so government subsidies by paying too according to the destinations, now if you buy product going to the north the amount they will pay you will be different from the one going to east or west, so what the do is when writing despatch bill for them instead of them to put Lagos they will change there destination to maduiguri just to collect more PEF fund. So you see the cabal is too much that why they can always pay people to protect or go on strike, they all make crazy money. These is Nigeria you block were they eat they hate and find a way not to allow the system work.

zakim:

https://www.dailytrust.com.ng/oil-price-fg-revenue-shrinks-as-petrol-subsidy-rises.html

Government should rather remove totally all petroleum subsidy as one of Nigeria's ill-conceived policies that is hurting the economy for years. Government should rather use the money to improve education and health care delivery and the rest of the amount should be used as social security for the poorest of the poor and improve the lot of graduates and other youth of the country. Otherwise what we will continue to see see is border shipment of our resources for feather neighbouring parasitic countries. This is the bitter truth embrace it and be happy.

AMERICAisKING:

Yoruba Muslim your end is near, keep on reading your terrorist manual called Koran first!

Lol. Amelika will grant you visa to visit their embassy soon. Keep it up.

Keemsleek005:



You are right, but few peoples opinions don't count like the masses, it's because you understand how the subsidy issue works that why you won't mind if it's remove, what about those that don't understand the subsidy thing?
Secondly on NNPC, why they can't build new refineries? Let break it down on a lay mans way or the way Nigerians will take it, if nnpc says they want to build new refineries in ph, marinated and warri let say the double amount dangote spent on his refineries what will you think Nigerians will say?
If Nigerian as allowed obasanjo sell the refinery then things won't be like these, hope you remembered the outcry then? Again lot of people are making money from these scam down to the filling station. Imagine thou I won't mention my company's name, they bring in let say 5, 000 MT of pms but the bill of laden says will say 15,000 mt of pms the thief dpr guy Will sign the document after collecting his share, npa will collect, naval will collect, nupeng and my company still makes billions,

Well, Dangote spent something like $11 billion on his refinery. ...out of which $3billion is his own money, the rest came in the form of loans from foreign banks and the African Development Bank.

If NNPC was to build three new refienres...it would cost at least $33-36 billion in total. Our foreign reserve is $40 billion, and our budget is $22 billion. So, NNPC would have to take a loan....or raid the foreign reserves (and have Emefiele and Ahmed on their case for life).

Then it costs at least 160 NAIRA to refine one liter of fuel...may be as high as N200. Meanhwile, you would probablyu expect NNPC to sell at a loss of N40 by selling fuel to marketers at N140....

At the end of the day, NNPC own't be making a profit, and the refienreis would break down, and we would be back to square one.

The thing is, you cannot have more refienreis without allowing subsidy removal. There is no other way. At least more refienreis on stream means that the price could fall due to compettion.

Gwilym:


Well, Dangote spent something like $11 billion on his refinery. ...out of which $3billion is his own money, the rest came in the form of loans from foreign banks and the African Development Bank.

If NNPC was to build three new refienres...it would cost at least $33-36 billion in total. Our foreign reserve is $40 billion, and our budget is $22 billion. So, NNPC would have to take a loan....or raid the foreign reserves (and have Emefiele and Ahmed on their case for life).

Then it costs at least 160 NAIRA to refine one liter of fuel...may be as high as N200. Meanhwile, you would probablyu expect NNPC to sell at a loss of N40 by selling fuel to marketers at N140....

At the end of the day, NNPC own't be making a profit, and the refienreis would break down, and we would be back to square one.

The thing is, you cannot have more refienreis without allowing subsidy removal. There is no other way. At least more refienreis on stream means that the price could fall due to compettion.

So on point sorry I didn't finish writing before I mistakenly submitted it, have finish writing, least I feel good talking with someone that knows it. Happy New year

Gwilym:


I don't think Dangote would have much effect. The guy has loans to pay, and he has to pay his employees in the refienry a decent salary..and then there is the refienry maintenance costs....

So, not much effect, am afraid.

Then how will he settle all these financial burden where our own refineries have failed again and again.
Unless there is something he knows that we dont know.
Will he sell the oil to Nigeria in dollars or Naira, will government subsidise the oil they will buy from him albeit cheaper as cost of shipping the oil is out of the equation or will government do to oil what they did to cement that gave Dangote the edge over cement importation then why did government not do the same for our own refineries.
As far as I am concerned the refineries should all be sold and let there be competition.
The issue of subsidy is still there and yet Dangote is building a massive refinery here in Nigeria where other investors fear to tread. So whats his end game

The way Buhari administers Nigeria's economy is baffling. They claimed Nigeria had it better under Jonathan with oil price up to $100. Now conditions are gearing back towards it and they are complaining of bankruptcy. Yet Buhari pays far more less for fuel subsidy than Jonathan. With pump price at N145 against N97.

Buhari is the greatest scam that ever happened.to Nigerians.

Fix our refineries and subsidy will no longer be here

Meh. Nigeria is still making more money at the end of the day. And Nigeria has more than oil, unlike the Arab degenerates who rely on it.

Keemsleek005:


So on point sorry I didn't finish writing before I mistakenly submitted it, have finish writing, least I feel good talking with someone that knows it. Happy New year

Happy New year to you too.

mrvitalis:
A country that makes less than 20 billion dollars from oil wants to subsidies fuel for 150 million Nigerians ....I laugh in Spanish

Because the alternative is being removed from office .

Subsidy is a bad economic decision,but since Nigerians are 'poor'...we must needs keep subsidy, even when it is bleeding the economy dry and preventing job creation.

Gwilym:
Happy New Year.

1.Basically, as oil prices go up , the cost of fuel goes up, the cost of importing fuel goes up, and the cost of subsidy goes up.

2.And the reason why we cannot produce fuel at home in Nigeria is because subsidy means that any fuel NNPC refines at home would be sold at a loss, reducing incentive to build new refienreis. It is the same reason why very few people, apart from Dangote (who has adequate sources of cash eslewhere) are building new refinereis.

3.The subsidy thing too is fuelling corruption.

4.Basically, oil subsidy MUST go...for

a) More investment in refinereis, since people can now refine and sell fuel at a profit.

b) An end to smuggling, and thus an end to broder closures...since no one would be buying fuel at N140 and selling it in Benin and Niger for N300 and above, and pocketing the profit at our expense.

c) More refienreis, which means more jobs.....and more income...as we become an exporter of fuel.

d) Finally, an end to fuel subsidy cabals, and more savings for government...meaning less recourse to taking loans.

Oil subsidy must go.

Your number 2 is illogical. Do you realise the reason we have subsidy is because we don't produce locally? It follows then that local production is automatically subsidy removal. So how did you arrive at local production being at a loss because of subsidy?

Mikelarteta:
I thought the Dullard said there is nothing like subsidy? God will surely punish all these APC members, they lied their way to power and still lying to remain in power. Imagine after increasing pump price from N87 per litre to N145 per litre these idiots are still talking about subsidy and some morons here on NL will still carry Buhari for head.

This ship has sailed a long time ago.

Everyone is cynical of the government till they get elected.

Gwilym:


Because the alternative is being removed from office .

Subsidy is a bad economic decision,but since Nigerians are 'poor'...we must needs keep subsidy, even when it is bleeding the economy dry and preventing job creation.

When the average Nigerian earns just 1650 from oil in a month ?
20 billion dollars is too small to some a state in Nigeria not to talk about the whole country

Mikelarteta:
I thought the Dullard said there is nothing like subsidy? God will surely punish all these APC members, they lied their way to power and still lying to remain in power. Imagine after increasing pump price from N87 per litre to N145 per litre these idiots are still talking about subsidy and some morons here on NL will still carry Buhari for head.

Even if the increase the price of fuel to #200 per litre, they will still subsidize. The solution is not in increasing fuel price, but to deal with the canals behind this. Big men are killing this country.

Agboriotejoye:

Your number 2 is illogical. Do you realise the reason we have subsidy is because we don't produce locally?

Actually, we have subsidy because Nigerians don't want to buy fuel at high prices. Subsidy was there when all our fuel was refined at home back in the 1970's-90's and it has increased in costs because the amount of fuel we use is far more than we have been able to produce

(Keep in mind that the last refinery we have was built in 1988...meaning even if all our refienreis worked...Nigeria cannot meet domestic needs.)

It follows then that local production is automatically subsidy removal. So how did you arrive at local production being at a loss because of subsidy?

OK...let's explain how subsidy works...

Nigeria as at 2018 was importing refined fuel at 200 naira via NNPC(the price has gone down to N170-180, this is for illustration only, mind) , selling it to marketers at N137-40, and marketers now sell at N145.

That means that as at 2018 we were subsidsing fuel at N60 per liter sold..that's the difference between the cost of importation and the actual price of fuel on the market. Part of that is paid by government, the other part by NNPC....from its profits...which it also uses to import fuel too).

Meanwhile, according to NNPC, if all the fuel was refined at home, we would be selling at N165 and above. At the same time, subsidy means a marketer sells fuel at N145.

So, in an ideal situation, if we refined at home, and did not import...that means we would be refining fuel at N165....and the refienreis would be selling to marketers at N145...MEANING...every refinery owner loses N20 per liter sold.

Marketers too lose money on transport costs, etc.

That's how subsidy works.

Whereas, if there was no subsidy, yeah fuel would cost N200 and above per liter...but at the same time, it would be profitable to build refinereis at home...so NNPC and private investors would come and build refienreis, make their profit, priduction goes up...and eventually prices come down due to competiton. Meanwhile, government stops paying at least 400billion naira annually (actually more than that) for subsidy

(DANOGTE is building his refinery for 11 billion dollars, 8 billion of that is in the form of loans...so whatever Dangote refines...he won't be refining fuel below N170 per liter.)

This is where it concerns us ad a people

Gwilym:


Actually, we have subsidy because Nigerians don't want to buy fuel at high prices. Subsidy was there when all our fuel was refined at home back in the 1970's-90's and it has increased in costs because the amount of fuel we use is far more than we have been able to produce

(Keep in mind that the last refinery we have was built in 1988...meaning even if all our refienreis worked...Nigeria cannot meet domestic needs.)





OK...let's explain how subsidy works...

Nigeria as at 2018 was importing refined fuel at 200 naira via NNPC(the price has gone down to N170-180, this is for illustration only, mind) , selling it to marketers at N137-40, and marketers now sell at N145.

That means that as at 2018 we were subsidsing fuel at N60 per liter sold..that's the difference between the cost of importation and the actual price of fuel on the market. Part of that is paid by government, the other part by NNPC....from its profits...which it also uses to import fuel too).

Meanwhile, according to NNPC, if all the fuel was refined at home, we would be selling at N165 and above. At the same time, subsidy means a marketer sells fuel at N145.

So, in an ideal situation, if we refined at home, and did not import...that means we would be refining fuel at N165....and the refienreis would be selling to marketers at N145...MEANING...every refinery owner loses N20 per liter sold.

Marketers too lose money on transport costs, etc.

That's how subsidy works.

Whereas, if there was no subsidy, yeah fuel would cost N200 and above per liter...but at the same time, it would be profitable to build refinereis at home...so NNPC and private investors would come and build refienreis, make their profit, priduction goes up...and eventually prices come down due to competiton. Meanwhile, government stops paying at least 400billion naira annually (actually more than that) for subsidy

(DANOGTE is building his refinery for 11 billion dollars, 8 billion of that is in the form of loans...so whatever Dangote refines...he won't be refining fuel below N170 per liter.)

Lol. Who in the world wants to buy anything at high price? Is the aim of free market not to increase production and reduce prices?
Where exactly are you getting this figures from?
I hope you realise that what drives the cost of fuel up is the landing cost not production cost per se. I'll really like to see evidence that Nigeria pays subsidy on locally refined fuel in the 70s cause if that were to be true, then it reinforces my belief that subsidy is not the reason why refineries are not being built in Nigeria since your can build a refinery and still claim subsidy.
US for example sells fuel at 30cents per litre which means the production cost will be somewhere between 20 to 25 cents. Bear in mind that US actually imports crude oil. For a country like Nigeria, we can actually sell at lower prices for our refineries like other oil producing countries do. Thus, if we are to be realistic and serious, we don't even need a dangote sized refinery since kerosine and diesel are already deregulated. What we actually need is modular refineries that will produce petrol to meet local demand. If we're serious as a govt, we can build five modular refineries in a year. Have you asked yourself why all the licences given for modular refineries never worked? Simple. The subsidy cabal sabotaged the effort just as they did the refineries. So what it takes is govt sincerity and political will to turn this around not necessarily subsidy removal
P.S: Petrol sells for about 30cents per litre in the US which will equate to about 100naira here. So you can imagine why the landing cost is between 165-200naira per litre

Just imagine the amount they would have been claiming as subsidy if they were the ones in charge when crude was as high as 100 dollars per barrel and we were buying PMS at N89 naira

Gwilym:


I doubt it would cost more than the cement (lol.)...but you are right.

The truth is, Dangote took a loan to build that refienry...and he has to pay it back.

and its the nigerian car owner who should pay it? nice hustle.

And where is Save or Occupy Nigeria that were at Ojota in 2012?God shall punish all of them n their Families IJMN.

I pity all those that trusted Buhari

Subsidy is a scam and he is paying it out more than any other president