Hi People,

Could someone kindly explain what Deregulation is about and how it affects the average man and what role NNPC plays (if any)

Thank you, All responses are welcome

(p.s. if U wanna use rice and beans to explain sef, U're free to), I dey wait, Make una no fall my hand o,

Not actually paying the real amount for the commodity,because somebody somewhere as assisted to cushion the high price and allows you to buy at a reduced price.

Hi Olas2olu,

Really appreciate your response but its not quiet explanatory.

I mean whats d real price?
who sets it?
why are they removing it now?
who are the benefactors etc

I no say my questions plenty, I just need asnwers

whether me sef go start to dey ship in Petrol, and subsidise it

Well that was just a lay man,s defination,but the Nigeria oil subsidy argument is possible a fraud on the citizens.I may not be right if i write the way i understand it.But i think is a fraud

In my opinion,i do believe it is a laudable concept.
The Government due to the inadequate refining capacity,has to buy crude oil at the international price at which it is valued.
It then gives import(of refined products)permits to certain companies who then bring in refined products,due to the exchange parity and the cost at which it is sold at the pumps,the subsidy paid is the difference between the cost of import and the selling price at the pumps.
The real price should be the actual price it costs to land it at the point of sale bearing all logistics.
The goverment is removing it now due to inadequate management of the whole process

Hi All,

Thanks for the response,
The question which I still havent gotten an answer to is this -

"How much is the international price of Petrol as at today?"
and what will the landed cost in Nigeria be today?

Thank you, Just looking for answers, thats all!!

Simple assumption.

My analysis is assumming for every 1 barrel of crude oil refine = 1 barrel of petrol.

Although, this is reality at all. The dynamics that plays into refining crude oil depends on a lot of factors including; type of crude (light, heavy), characteristics of the crude (sweet, sour, PONA classification etc), crude assay (amount of crude you can actually convert to gas, petrol, kerosenes, other distillates, cokes and others), type of refinery you're running (simple refinery, complex refinery or very complex refinery), and your mode of operation (selectivity-what is driving your production in terms of market) and other factors

Global Price of crude oil ~ $95 / barrel ( todays global price)
Cost of refining the crude @ 20% ($95) = $19
Logistic, tarrif, taxes @ ~ 12% (95+19)= $15.32
marketing profit margin @ 15% (95+19+15) = $22 / barrel
Selling price / gallon = $147 / 42 = $3.50 (assuming 42 gallons /barrel)
Selling price / litre = $3.5 / 3.8 = $0.92 (assuming 3.78 litre/gallon)
Selling price of petrol after deregulation (N) = ($0.92*(N160/$1)) = ~N147

I hope this gives you a feel for what to expect after deregulation.

International price of petrol differs per country, depending on each country's objective towards consummation of petroleum products, regulation structure, tariff system, taxes and others. Hence, you cannot use international barometer to gauge what Nigerian petroleum products prices should be.

I think the goverment is making a point here. Let fuel subsidy go so that the price of fuel will go up, then private and foriegn investors will come in because of the apparent boom in the businness, then competition will arise and that will lead to a fall in price and steady availability of the commodity.
Although we are going to exprience hardship at first because of the policy but with time we shall find light at the end of the tunnel.
Come think of it we still  have some fears; which is we don't know wether the money gain from the removal of subisdy will be used to achieve what is planned for maybe becuase of poor management of fund becuase goverment can never be trusted. May God help Nigeria, Amen![color=#990000][/color]

We are now in the future today,who was right,fraud

When someone asks to get an explanation in layman terms what he means is can you help me break it down so that even if I haven't been to school before I can understand enough to teach someone else. I can't say you have in any way achieved that in all responses here. But its alright.
What I think they are all sayin OP is that supposing the real price for importing refined crude in the form of PMS (actual price not known) is 147 per litre, the federal government pays 66.50k to make you buy at 87.50k per litre (maybe cos we have crude as a natural resource) as a way of making life easier for you.
Now Nigeria cannot any longer continue to do that because of the collapse in our economy so they are removing the AID and thereby making you buy it at the actual rate you should buy it.
I hope I did help you.