In my opinion and backed by statistical analysis, there is no way Petrol should still selling for less than N800 per litre.
Note that we are still importing petrol and have not in anyway produced a litre since Tinubu "removed" subsidy.

On May 29, 2023, Dollar exchanged for N451 and later within one month, it rose to N550, then by Dec 2023, it breasted N1065. Today, officially it is N1365. Black market has gone up to N1515 if I am not mistaking.

Now if at the time $1 was N451, FG and NNPCL moved pump price to N670 per litre., with Naira depreciating 3×N451=N1353; tell me the magic that has kept pumping price stable at N670 per litre. Your answer is as good as mine, SUBSIDY payments.

Empirical proof:
In countries we import gasoline from like Singapore, pump price is $2.76 USD per litre for the cheapest grade. That is about the same price in June 2023. Now assume that Nigeria was buying the cheapest and then dilute it with alcohol to bring the price down (yes, it is done world over) by about 30% per liter. So, let's assume for our analogy that we buy a litre off the refinery in Singapore for $1.986, at June 2023, that was N921 per litre at official CBN rate of N464. Again may be because we supply them crude, we technically are able to lower the ex-factory cost. Hence after adding logistics and shipping plus taxes, we were able to sell at the pump for N670 per litre. Put simply we were buying petrol in June 2023 at the cost of N670/N464 = $1.44 (USD) per liter.
Considering that on June 21, 2023, CBN adjusted the rate to N708/$, that price of N670 became subsidized by as much as N349.5 per litre.

Now fast forward to today with official exchange rate at N1365, I would wonder what magic the FG is making to still be selling petrol at N670, when the approximate landing cost is almost about N1966 per litre. Hence we are still paying subsidy at the rate of N1296 (N1966 cost per litre less N670 selling price).

If we are consuming 52 million daily (Average daily petrol consumption drops by 16.8% to 52m/litre – NMDPRA.), that means that FG is technically paying a whopping 52m × N1296 a day. My calculation is that we are paying a total of N67.37 Billion daily. That amounts to N24.6 Trillion in a year of 365 days.

The APC led FG need to come clean. Nigeria is not moving forward and the government is only built on propaganda.

If you have a counter point, state it here. Do not just type gibberish, counter this and I will learn from you.

Peace!.

Yes they are still paying subsides. (Infact, the OP needn't have done all this calculations. Landing cost in October last year was N720. Highest cost of fuel was N700 In the far North, lowest was N580 around Lagos. Landing cost has gone up since then. NNPC Is obviously being forced to subsidise).

NIgerian governments have always sacrificed good economics on the platform of getting elected.

Anyway, let's see what happens when we begin domestic refining. If prices 'fall' , a subsidy is in place on the refineries.

Either way, Nigeria suffers. You do not sell at a loss, and expect things to work well. We lost 4 refineries because subsidy.

P.S

As calculated by the OP...we may pay 24.6 trillion naira this year for subsidy. Last year it was probably around 10-14 trillion, in 2022 it was 10 trillion. And people come here to bash me for opposing subsides.

GEJ wanted to remove subsides because in 2011, he spent three times more on subsides than in 2010. Tell me, if you were in his shoes, you would even remove it and tell the Occupy NIgeria to keep quiet.

The collapse is here...

The propaganda isn't propaganding any longer.

Tinubu don run leave Nigeria when e see wetin pass am.

I go play, I go play....oya wear jersey enter field. First touch, own goal.

Subsidy, removed...
Student loan, approved...

Let the poor, breafff

E think say Nigeria na Lagos state.

The gas you are using now was bought months ago. You don't import stuff like petrol the same way you go to market to buy periwinkle.

Govt has to pay it in order to try and feed idle hands indirectly. The structure we maintain is the issue. Grabbing one region's oil and using it to fund religion, military, and enjoyment for six regions means one thing, theft.
Stealing arrangement breeds corruption from the top. How do you elect a governor whose main job is to spend diplomatic loot and expect him not to steal for himself? That killed the structure needed for production as many people sought to get a piece of the cake. We have no foundation for productive lifestyle so govt has to try and feed the thieving idlers on public payroll.
Have you seen any attempt at clearing rent seekers in Lagos or Anambra from the streets? They help put the govt in position and are best retained than discarded.

We are still playing.

nairalanda1:
Yes they are still paying subsides. (Infact, the OP needn't have done all this calculations. Landing cost in October last year was N720. Highest cost of fuel was N700 In the far North, lowest was N580 around Lagos. Landing cost has gone up since then. NNPC Is obviously being forced to subsidise).

NIgerian governments have always sacrificed good economics on the platform of getting elected.

Anyway, let's see what happens when we begin domestic refining. If prices 'fall' , a subsidy is in place on the refineries.

Either way, Nigeria suffers. You do not sell at a loss, and expect things to work well. We lost 4 refineries because subsidy.

P.S

As calculated by the OP...we may pay 24.6 trillion naira this year for subsidy. Last year it was probably around 10-14 trillion, in 2022 it was 10 trillion. And people come here to bash me for opposing subsides.

GEJ wanted to remove subsides because in 2011, he spent three times more on subsides than in 2010. Tell me, if you were in his shoes, you would even remove it and tell the Occupy NIgeria to keep quiet.

if subsidy didn't kill the Singaporean refineries we bought petrol from, how did it kill ours?

You and this your ogogoro-logic of reasoning again. I tire for you.

RepoMan007:
if subsidy didn't kill the Singaporean refineries we bought petrol from, how did it kill ours?

You and this your ogogoro-logic of reasoning again. I tire for you.

Erm, SIngapore does not pay any subsides on petrol. Infact what they do, as OP said is sell NIgeria petrol, which is then subsidise to sell to end user

You did not read the article.

In countries we import gasoline from like Singapore, pump price is $2.76 USD per litre for the cheapest grade. That is about the same price in June 2023. Now assume that Nigeria was buying the cheapest and then dilute it with alcohol to bring the price down (yes, it is done world over) by about 30% per liter. So, let's assume for our analogy that we buy a litre off the refinery in Singapore for $1.986, at June 2023, that was N921 per litre at official CBN rate of N464. Again may be because we supply them crude, we technically are able to lower the ex-factory cost. Hence after adding logistics and shipping plus taxes, we were able to sell at the pump for N670 per litre. Put simply we were buying petrol in June 2023 at the cost of N670/N464 = $1.44 (USD) per liter.
Considering that on June 21, 2023, CBN adjusted the rate to N708/$, that price of N670 became subsidized by as much as N349.5 per litre

Singapore does not subsidse fuel...infact they even tax every liter sold, and they refused to reduce the tax recently

nairalanda1:


Erm, SIngapore does not pay any subsides on petrol. Infact what they do, as OP said is sell NIgeria petrol, which is then subsidise to sell to end user

You did not read the article.


Singapore does not subsidse fuel...infact they even tax every liter sold, and they refused to reduce the tax recently

so the Singaporean refineries are selling to us at a loss.

RepoMan007:
so the Singaporean refineries are selling to us at a loss.

NO, they sell to us at full price, NNPC sells at a loss to the downstream, and government pays NNPC a subsidy to cover that loss.

RepoMan007:
if subsidy didn't kill the Singaporean refineries we bought petrol from, how did it kill ours?

You and this your ogogoro-logic of reasoning again. I tire for you.

The same people that sold the idea of floating the naira, let demand and supply determine the true value of the naira , na the matter we still they solve now
This people lack what the essence of governance is, they dwell on theory that its impracticable

If govt is paying the loss, how did it kill the refineries

nairalanda1:


NO, they sell to us at full price, NNPC sells at a loss to the downstream, and government pays NNPC a subsidy to cover that loss.

Tinubu’s concern now is not even about all these but how to embezzle his personal trillions to fuel his insatiable greed

DMerciful:
If govt is paying the loss, how did it kill the refineries

At the end, subsidy covers the difference between production cost and the set govt price. And most of the time it does not even adequately cover the resulting loss from selling below the production cost

Note that for a profit to be made, the NNPC and marketers has to sell above the production cost. Subsidy forces them to sell below the production cost, and the loss is covered by subsidy.

Even if subsidy covers the loss, it would be like me buying bread at N1200, selling it at the government price of N800, and government pays me N400. NIce, but at the end, I don't make a profit. I just get back my money. Meanwhile..if i sold it at N1500 a loaf, I would get back my money and make a profit. (Yes, that is how the actual market works).

So whose covering all the loses from imported fuel since dollar keeps increasing

nairalanda1:


At the end, subsidy covers the difference between production cost and the set govt price. And most of the time it does not even adequately cover the resulting loss from selling below the production cost

Note that for a profit to be made, the NNPC and marketers has to sell above the production cost. Subsidy forces them to sell below the production cost, and the loss is covered by subsidy.

Even if subsidy covers the loss, it would be like me buying bread at N1200, selling it at the government price of N800, and government pays me N400. NIce, but at the end, I don't make a profit. I just get back my money. Meanwhile..if i sold it at N1500 a loaf, I would get back my money and make a profit. (Yes, that is how the actual market works).

DMerciful:
So whose covering all the loses from imported fuel since dollar keeps increasing

The government, naturally.

THere is a reason why I oppose subsides. At the end, there is too much opportunity for waste and stealing.

The thing is, if we had allowed NNPC to sell fuel at a profit from the refineries, and let the market set the price, NNPC would have been working for its money, and there would have been reduced stealing and no issues. Of course, no subsidy payments, so that issue is over.

Ever hear of sabotage, loss of equipment, etc , etc....at Glo, MTN, or even Nestle Nigeria? Sell at a profit, and you would ensure everything works well enough to make enough money. Don't sell at a profit, bring in subsides, then there would be no profits to pay for improvements, and the result would be scarcity and shortage.

We saw that in many communist countries where there was scarcity because government tried to subsidize food. Then they got rid of communism. Now, they are not perfect, but the shelves are full...plus crucially, you have your choice of brand...not just the old days when it was 'bread, meat, etc'.

The truth is govt cannot run a profitable business or organization and that why Nigeria as a country is not being ran profitably.

Nitel, delta steel, NNPC, NEPA etc could not be ran profitably due to monumental govt corruption. Has nothing to do with subsidy

nairalanda1:


The government, naturally.

THere is a reason why I oppose subsides. At the end, there is too much opportunity for waste and stealing.

The thing is, if we had allowed NNPC to sell fuel at a profit from the refineries, and let the market set the price, NNPC would have been working for its money, and there would have been reduced stealing and no issues. Of course, no subsidy payments, so that issue is over.

Ever hear of sabotage, loss of equipment, etc , etc....at Glo, MTN, or even Nestle Nigeria? Sell at a profit, and you would ensure everything works well enough to make enough money. Don't sell at a profit, bring in subsides, then there would be no profits to pay for improvements, and the result would be scarcity and shortage.

We saw that in many communist countries where there was scarcity because government tried to subsidize food. Then they got rid of communism. Now, they are not perfect, but the shelves are full...plus crucially, you have your choice of brand...not just the old days when it was 'bread, meat, etc'.

DMerciful:
The truth is govt cannot run a profitable business or organization and that why Nigeria as a country is not being ran profitably.

Nitel, delta steel, NNPC, NEPA etc could not be ran profitably due to monumental govt corruption. Has nothing to do with subsidy

IN the case of NEPA, NNPC, and NITEL, it had a lot to do with subsidy.

You run at a loss, issues result. Heck NITEL's GSM subsidiary MTEL ran at 'cheap prices'. Result...they could not compete with MTN and now AIRTEL...and they collapsed. (Glo that charged high prices is still there ).

NEPA...cheap prices, plus too much power theft....disaster. Even now that it is largely privatised, government is still setting their prices (In 2019, Moghalu stated that the DISCOS were charging for power at a loss...of N20-30 per kwh sold. And..it had been like that for 2 years). Result, most parts of Nigeria don't have light, and people have to buy transformer and suchlike because .....your disco does not have the profit to buy them for you. (And government pays them a subsidy that barely covers the losses..if at all).

MOdified

IN communist countries, a lot of government companies were around, and ran at cheap prices. The ones that did not collapse after the fall of the USSR and its satellites were those that switched to profit mode on time...usually automotive and aircraft.

surgical:
The same people that sold the idea of floating the naira, let demand and supply determine the true value of the naira , na the matter we still they solve now
This people lack what the essence of governance is, they dwell on theory that its impracticable

he is an agent of destruction clearly. Always advancing silly argument with lies.

Can you buy fuel at almost 2k per litter. Jobless Nigerians make a lot of noise on the Internet, if its easy go and contest, and win. Lets see the difference you will make. Talk is very cheap

vanitybutiwanti:
Can you buy fuel at almost 2k per litter. Jobless Nigerians make a lot of noise on the Internet, if its easy go and contest, and win. Lets see the difference you will make. Talk is very cheap

The people can buy fuel at 2k if government makes minimum wage to be 250,000 naira.

Ebubu2:

The people can buy fuel at 2k if government makes minimum wage to be 250,000 naira.

200k from where there are roads, hospitals, schools that needs to be fixed

vanitybutiwanti:
200k from where there are roads, hospitals, schools that needs to be fixed

Who told you the government doesn’t have money? Shey they can give it to private constructors to build and toll? There are different ways to sort that out.
Loan et cetera. They just want more money available to steal.

Ebubu2:

Who told you the government doesn’t have money? Shey they can give it to private constructors to build and toll? There are different ways to sort that out.
Loan et cetera. They just want more money available to steal.

There's no money, don't be deceived, the reason we're in this mess is because there's no money.

vanitybutiwanti:
There's no money, don't be deceived, the reason we're in this mess is because there's no money.

because less than 100 people stole trillions of Naira.

There is money, stop stealing so that the money will be available .

Ebubu2:
because less than 100 people stole trillions of Naira.

There is money, stop stealing so that the money will be available .

you have no idea about the monthly wage bill for civil servant, you're advocating for 250k minimum wage, I hope you're aware that if it's implemented, the increase I wage will be across board, people earning 1m monthly will be earning over 4m, like I stated earlier, talk is very cheap, most Nigerians do not know the state of the countries finance or the reason why there is a surge in commodity prices, they just call out government on the Internet as if they will do better if they are in that position, you want government to increase salary by 1000% at a time when the country is not earning more?

If its done, all the revenue generated by the government will be channel into paying salaries, healthcare and other infrastructural projects will be neglected. Most of you have the notion that the FG generates money from thin air, what a joke!

vanitybutiwanti:
you have no idea about the monthly wage bill for civil servant, you're advocating for 250k minimum wage, I hope you're aware that if it's implemented, the increase I wage will be across board, people earning 1m monthly will be earning over 4m, like I stated earlier, talk is very cheap, most Nigerians do not know the state of the countries finance or the reason why there is a surge in commodity prices, they just call out government on the Internet as if they will do better if they are in that position, you want government to increase salary by 1000% at a time when the country is not earning more?

If its done, all the revenue generated by the government will be channel into paying salaries, healthcare and other infrastructural projects will be neglected. Most of you have the notion that the FG generates money from thin air, what a joke!

people that print more money and steal ?

Gentlemen, what exactly is subsidy?
We extract crude in Nigeria sell at intl crude price(a), bring it back at intl crude price + refining and logistics cost(b) and we shout that there is subsidy because govt reduced price(b)! If we were refining in govt refineries, we(govt) could sell to ourselves(citizens) at any price higher than cost of drilling + refining.. would u still call that subsidy cos it is not at intl price + logistics(b)?

I as a village king produce yam from some of the farmlands owned by the village(NOT ME) at total cost of N25/yam. I decide to sell to my villagers at N40 though market price (inter village price) is N80.. Do we call the N40 price a subsidized price from N80 or in fact a N15 taxing of the villagers per every yam bought- because they all jointly own the farmlands?

The OP is only saying the obvious.

There is no way one will not appear stupid when trying to defend this government in anyway.

vanitybutiwanti:
Can you buy fuel at almost 2k per litter. Jobless Nigerians make a lot of noise on the Internet, if its easy go and contest, and win. Lets see the difference you will make. Talk is very cheap