emiye:

Ofcourse Naira,
and since Naira is stronger than the currencies of those countries the fuel is smuggled to, dont you think it still creates lots of room for the smuggling to thrive ?

so it is naira.

fuel smuggled to benin republic on who's accord ? The government or private investors ?

at what point is the subsidy paid, is it when it has already been signed at the port that the refined fuel has arrived or when it is till on sea ?

if when it has arrived, then who's fault is the smuggling, private investor or the NNPC for not keeping track record of the oil brought into the country.

if on shore, then there is NO SUBSIDY PAID TO THE INVESTOR.

If the difference is in taxes then there is no gain from smuggling since that has to be paid anyway.

Plus, after you account for the "cost of smuggling" the remaining profit might not be worth it, even if there are no taxes.

In any case, it wouldn't matter since the government pays nothing - only the importer has to make sure he is fully reimbursed for the cost of his sales. He could care less where it is sold - in Nigeria or Benin or Ghana.

emiye:

 hmmm  OK,  but something is puzzling, how come ghana now sell petrol @ 187/litre?

why have they not imported from the same legitimate place @141/litre?

koruji:

If the difference is in taxes then there is no gain from smuggling since that has to be paid anyway.

Plus, after you account for the "cost of smuggling" the remaining profit might not be worth it, even if there are no taxes.

In any case, it wouldn't matter since the government pays nothing - only the importer has to make sure he is fully reimbursed for the cost of his sales. He could care less where it is sold - in Nigeria or Benin or Ghana.

Don't you think you are assuming that the difference in price is simply due to taxes?

I am still not convinced that with the subsidy removal, smuggling will reduce substantially !

alj_harem:

so it is naira.

fuel smuggled to benin republic on who's accord ? The government or private investors ?

at what point is the subsidy paid, is it when it has already been signed at the port that the refined fuel has arrived or when it is till on sea ?

if when it has arrived, then who's fault is the smuggling, private investor or the NNPC for not keeping track record of the oil brought into the country.

if on shore, then there is NO SUBSIDY PAID TO THE INVESTOR.

The naira i mentioned is simply sarcastic

I believe the Naira is stronger than benin francs? isn't it?

ekt_bear:

I am not claiming that it will disappear entirely. It cannot, while Nigerian refined petrol products are cheaper.

However, clearly the demand will diminish substantially, and cannot remain constant.

Demand will not disappear without the presence of a superior product or substitute. In this scenario, other west Africans may be priced out of petroleum products coming from Nigeria but will not stop demanding it. In the economic equilibrium of the demand/supply curve, supply will reduce with demand remaining constant resulting in lower quantity and higher prices in the countries relying on products from Nigeria.

With higher prices in other countries, Nigerian marketers will simply seize on the porous Nigerian borders and divert products to other countries causing shortages in Nigeria. This scenario is all too familiar.

^^^ I thought as much

Unless the government is paying any part of the cost of fuel it is not going to work this way. Those importers to Nigeria might as well import directly from their cheap place to sell in Ghana as long as Nigeria is not importing/producing and selling below the international price.

It is likely that the difference between Ghana and Nigeria prices are taxes/subsidies and transport costs. Otherwise, there is no reason why a Nigerian importer should be able to bring in fuel at a cheaper cost than a Ghanian importer.

Katsumoto:

Demand will not disappear without the presence of a superior product or substitute. In this scenario, other west Africans may be priced out of petroleum products coming from Nigeria but will not stop demanding it. In the economic equilibrium of the demand/supply curve, supply will reduce with demand remaining constant resulting in lower quantity and higher prices in the countries relying on products from Nigeria.

With higher prices in other countries, Nigerian marketers will simply seize on the porous Nigerian borders and divert products to other countries causing shortages in Nigeria. This scenario is all too familiar.

koruji:

Unless the government is paying any part of the cost of fuel it is not going to work this way. Those importers to Nigeria might as well import directly from their cheap place to sell in Ghana as long as Nigeria is not importing/producing and selling below the international price.

It is likely that the difference between Ghana and Nigeria prices are taxes/subsidies and transport costs. Otherwise, there is no reason why a Nigerian importer should be able to bring in fuel at a cheaper cost than a Ghanian importer.

My comment was about the demand/supply and price/quantity dynamics.

Besides, Nigerian smugglers will be selling at below pump prices in those countries to make any profit and I doubt very much that all of the supply in those countries is from Nigeria. Nigerian smugglers are simply cashing in on whatever quantity they can smuggle out of Nigeria. They are unlikely to be the main suppliers of products to west African countries.

Even if it is a real, rather than tax, difference, there is no reason why someone would first import fuel to Nigeria and then take it to Ghana. As long as they can get it from the same sources as Nigeria at a similar price Ghana or whatever country's fuel needs would now be met directly by imports.

However, if Nigeria somehow finds a way to procure at a lower cost than other potential importers (for example by producing cheaply at home) then there will be smuggling of that lower cost fuel.

One remaining source of smuggling not affected by the removal of subsidy is illegal refining of stolen crude - this could increase substantially to feed both the domestic and other (e.g. Ghana) markets - but the fact is that whatever can be smuggled across the borders from this source is already being smuggled and will not change. However, the domestic end will increase significantly.

emiye:

Don't you think you are assuming that the difference in price is simply due to taxes?

I am still not convinced that with the subsidy removal, smuggling will reduce substantially !

1 lit don reach $2 in Senegal, den dey chop the subsidy also!

Nigerians have very short memory.

It was same story during IBB years, remove subsidy because our fuel is too cheap.

It was same story during Abacha years, remove subsidy because our fuel is too cheap.

Same old crap during SAD years of Mr Obasanjo.

Well 15YEARS after, still same old story.

Sell Petrol at 500Naira per liter, it will still be smuggled across the border; Benin Republic will simply have to pay more and the smugglers make more money.

The problem is NOT SUBSIDY. The problem is Nigeria Government and the cabal that's milking Nigerians.

I know that route very well. And I see fuel being sold using glass kegs, but never knew it was Nigerian Fuel. Bleep Them all

We have been doing operation fuel Ecowas, now all that has stopped !!!

Was there subsidy really?Please somebody with the right information about the oil industry should help.Because it has now been successfully sown to Nigerians that there is subsidy.

I can't quite believe anybody living in the US does not realize why there really is a half-hearted effort to stop illegal immigrants from Mexico. Believe you me, if the disadvantage outweighed the advantage, the US will put a complete stop to it. You can't compare the effort in securing the US/Mexico border to the Nigeria/Benin or Nigeria/Niger border.

FEMARY1:

Was there subsidy really?Please somebody with the right information about the oil industry should help.Because it has now been successfully sown to Nigerians that there is subsidy.

Those who know have already demonstrated that there really is no "subsidy". And using commonsense comparing the gas price in Nigeria and the US, as soon as the Nigerian price actually begins to approach the US price you know there's no subsidy. Rather there's a price inflation.

If we admit a failed state, where smugglers are having the day, corruption is normal and celebrated, how can you vouch for the safety of the proceeds from the subsidy removal.
The system is death, whatever that u re going to do now would not work. check corruption first.

Has anyone gotten the link or a copy of the [Brief on Fuel Subsidy: A Presentation By Dr. Ngozi Okonjo-Iweala]. It would be worthwhile to read this to better analyse the thinking of those at the helm of affairs in this country.

Please send the link or a copy of the document.

Million dollar question? petrol currently being sold, was it ordered pre or post fuel subsidy removal.if the products were already in tank farms and filling stations, it means they were imported at least 3 weeks ago.

Is this subsidizied petrol being sold to us at post subsidy price.if it is it must be the biggest scam ever

Now that subsidy is off, we should encourage the distribution of fuel from Nigeria to ECOWAS, or the so called smuggling. It simply means more job for us, and less for them, more patronage for our ports and less for them. If the fuel distribution market in West Africa spans from Nigeria, then foreign investment in refining can be attracted to Nigeria with the size of the West African market. Nothing beats a free market! In fact govt. should remove all export tariffs on refined petroleum products in addition to the subsidy removal.

Nigeria's fuel leaded same price as America's unleaded fuel,
this is an outrage.

logica:

I can't quite believe anybody living in the US does not realize why there really is a half-hearted effort to stop illegal immigrants from Mexico. Believe you me, if the disadvantage outweighed the advantage, the US will put a complete stop to it. You can't compare the effort in securing the US/Mexico border to the Nigeria/Benin or Nigeria/Niger border.

I tire.

Beaf you seem to have a very strong conviction of your belifs. Please help me out on this: If an intruder raped your wife or daughter in your presence and is identified will you pursue his apprehension and punishment or that of your wife/daughter for not being a virgin?

@Beaf

seriously how is it possible you really never oppose this governments policy, lets talk outside this subsidy issue, no unpaid human dogmatically supports an administration the way you have done in the past and still do, of course until your sponsors read that you have lost RESPECT and influence on Nairalnad

I wonder where they get the oil now? xD

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Nigeria...the land flowing with milk and honey.

[size=28pt]The fuel subsidy has never favoured the majority of Nigerians, but the oil marketers and their distributors who are major stakeholders in the corrupt government of President Goodluck Jonathan of Nigeria.

The masses don't own the filling stations and they don't import fuel.
So who are those ripping them off?
The oil marketers importing fuel and the owners of filling stations who are leading members of the corrupt ruling party and the President is their major beneficiary.[/size]

It is brazenly corrupt and outrageously fraudulent for the filling stations to start selling fuel at exorbitant pump prices immediately the government announced the removal of fuel subsidy on January 1, 2012, without any notification to the citizens who are the primary consumers.

The fuel being sold between N137 and N200 per litre was imported under the fuel subsidy regime; therefore it is daylight robbery of consumers by the corrupt and fraudulent government, oil marketers and their distributors with thousands of filling stations all over Nigeria.
Millions of litres of fuel imported before the removal of the fuel subsidy are now being sold to helpless consumers at exorbitant prices with the consent and approval of the corrupt administration of President Goodluck Jonathan against the wishes of the Nigerian Senate and House of Representatives.

The government has the right to implement the deregulation of the downstream sector, but it must be done legally and not arbitrarily.

The Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley lied when he said the removal of the fuel subsidy on Premium Motor Spirit (PMS) was done after extensive consultations with stakeholders across the nation and that service providers in the sector are now going to procure the PMS products and sell them in accordance with the indicative benchmark price published fortnight on the PPPRA website.

Who were the so called stakeholders across the nation who agreed with the PPPRA to remove the fuel subsidy overnight?

Spending of subsidy savings? How did we spend Excess crude account money?

Leave C@ck muncher BEAF and his sisterhood of beetches!

Deranged fools follow this phocking c@ck sucker ignorant of the stains around his mouth.

Dude, I hope you get your SS/SE caricature so you and yours can be ruled by F@cking Tw@ts like GeJ.

Nigeria on paper produces 2.21m barrels/day and consumes 280,000 barrels/day (roughly 15% or less of it's daily production) supposedly then we export 1.9m barrels or thereabout/day)

Why do we have to go through all these for less than 15% consumption of what we produce (which could be less if we had stable power supply) ?

We produce 2.21m barrels/day on paper, does any one have the feeling we actually produce more than that documented figure?


Just confused here,

989900:

does any one have the feeling we actually produce more than that documented figure?

Of course we do. The excess is spirited away through our offshore waters to "First World Countries" who need them more.