atlwireles:


Your first comment was already an indication where your crap was heading. Please tell us which oil companies in Nigeria are surviving without subsides, you are about to make a great revelation.

What crap are you on about dude? Plus since you like answering questions with questions, are you now telling us here that there are no more independent fuel importers in Nigeria aside from the 7 majors anointed by the FG?

playboy19:


What crap are you on about dude? Plus since you like answering questions with questions, are you now telling us here that there are no more independent fuel importers in Nigeria aside from the 7 majors anointed by the FG?

Anointed? PPRA is open for you to apply, if you meet their set matrix, you might just be lucky to join a business, where the consumer and the government holds all the risk and you smile to the bank.

atlwireles:


Anointed? PPRA is open for you to apply, if you meet their set matrix, you might just be lucky to join a business, where the consumer and the government holds all the risk and you smile to the bank.

LOL, funny. Now i know where your problem lies. With your above statement, i can tell you are still living in the '70s. Get enlightened dude, Nigeria has shortlisted the number of NNPC importers back to the original 7 right after the subsidy saga. Plus the 7s can't even source the product from any other company outside the trio of Trafigura, Glencore or Vitol S.A. Any document of delivery from any other company outside of these three will not be accepted. Like i said, get enlightened. Let's talk about something else.

bushdoc9919:


You are asking the good questions....and to answer it all, I would say we need to produce more fuel for domestic consumption. That in my mind is where the problem lies.(Which is why Dangote better hurry up and build the refinery he promised....instead of spending so much time talking about it).It is because we are importing fuel at the high world prices...that is where much of the subsidy money is going to. (and if international oil prices go up...especially with the Iraq situation......oil subsidy money may have to go up too.)

(Of the countries you mentioned, Venezuela and Saudi also produce far more oil than Nigeria....and for lesser populations (Venezuela 37million, Saudi 11 million). Brazil has invested a lot in something called 'green fuel' which is made from sugar cane , and is mixed with the regular fuel (Of course Brazil also has a diversified industrial economy...meaning everything has to work for the industries to work well....including fuel supply)

To sum up....Nigeria needs to produce more oil. If we were producing all of the oil for domestic consumption here in Naija...then the current subsidy regime would have made sense...but this one where we are importing much of the oil we consume at home from abroad...and we expect to pay cheap prices ? Something's got to give.

sir, you are making sense but our leaders are not sincere. i'd rather 1 trillion is spent on subsidy than the 1 trillion ending in the pockets of thieves!!! this government has shown no sincerity in fighting the corruption in the oil industry.
Sir, the government has been saving at least 30 naira per litre since they increased pump price in 2012, can you sincerely say sure-p investments have been commensurate with the savings? they will remove subsidy and nigerians will still not see the roads, rails etc.
the government has to show some form of sincerity before they can say they want to remove subsidy without the people agitating.
Pray sir, is removing subsidy the only way to save to develop infrastructure? we probably have the largest presidential fleet in africa, for what? the cost of governance is so high (we have ruben and okupe doing the same job), we hear of pension scam, subsidy scam, lawan farouk is still walking free and then you say nigerians should not ask for free fuel, I ask you sincerely sir, is that fair?
coordinating minister of the economy always tells us all is fine with our economy and foreign reserves yet in the same breathe told us in 2012 that our economy will collapse if subsidy is not stopped.
We have nscdc to guide pipelines yet our govt have no qualms handing out multi billion contracts to his kinsmen who are militants to watch our pipelines yet we hear of crude being stolen everyday.
Sir, lets see some sincerity on the part of the govt and i'm sure every reasonable nigerian will not oppose a GRADUAL removal of subsidy.
PS. I only quoted you because you seem to be reasonable and not those gej till 2019 crooners.

bushdoc9919:


Before you send me to the stake consider this

1.Our refineries are not operating at full capacity

2.Even if they were operating at full capacity...we still have to import to make up the projected shortfall in domestic production (and recall that oil prices are very high....and are set to rise up).

3,And we are paying subsidy money, on top of the billions spent on importation(and some oil subsidies are being paid to importers)

4.And we are not producing enough fuel....we produce far less than the UAE and even Saudi.

That is the problem....ultimately the oil money is not enough and the subsidy money needs to be spent on industrial support infrastructure...so that we can get off oil.

Oil is a curse.

^^^
No sir, oil is not a curse. Oil is what you make of it. For every Nigeria (that has turned oil into the devil's excrement and mortgaged the future of its generations unborn), there is a Norway (a country in which unborn children will start life with a surplus in nearly every sense of the word).

As I have said on this thread and others, Nigerians need to know from the powers that be how much it costs to produce petroleum products LOCALLY. We need to know!!!

We have been lectured (time without number) on the high landing costs (dollar denominated) of imported fuel simply because that strengthens the argument of those who advocate the removal of the so-called subsidy. But so far, I have not been provided incontrovertible proof of the cost of local production of a litre of PMS, DPK or AGO. And we all know why.

If indeed there was no monkey business going on, then the statistic I am asking for should be at every government functionary's fingertips i.e. it costs NGN40 or NGN50 (or whatever) to produce a litre of locally refined PMS, DPK or AGO in Nigeria. Why is it so hard to get the truth?

atlwireles:


Are you telling us total is a major player in the Saudi retail market?

Total dropped the cash to build a refinery for export, they are refining in Saudi Arabia, a stonethrow away, SADARA is building a petrochemical plant to use the products from the refinery, Total will sell the refined oil in Saudi Arabia if a market exists there, there is a huge market for refined products in Nigeria seeing as we import refined products, so, what stops the government from doing the same thing as the Saudi Arabian government? Total needs to earn, it will sell to the devil if he can pay on time, Nigeria can pay on time, why are we not doing this in our country, the number of people employed in that refinery is over 2 thousand, the added value is more than the $20bn used to build it.

VolvoS60:


^^^
No sir, oil is not a curse. Oil is what you make of it. For every Nigeria (that has turned oil into the devil's excrement and mortgaged the future of its generations unborn), there is a Norway (a country in which unborn children will start life with a surplus in nearly every sense of the word).

As I have said on this thread and others, Nigerians need to know from the powers that be how much it costs to produce petroleum products LOCALLY. We need to know!!!

We have been lectured (time without number) on the high landing costs (dollar denominated) of imported fuel simply because that strengthens the argument of those who advocate the removal of the so-called subsidy. But so far, I have not been provided incontrovertible proof of the cost of local production of a litre of PMS, DPK or AGO. And we all know why.

If indeed there was no monkey business going on, then the statistic I am asking for should be at every government functionary's fingertips i.e. it costs NGN40 or NGN50 (or whatever) to produce a litre of locally refined PMS, DPK or AGO in Nigeria. Why is it so hard to get the truth?

Sir, you have asked a very valid question that any sensible Nigerian should be asking but unfortunate, politics wouldn't let you get the answer. You may think Nigerian business men were not thinking about building refineries and all the benefits that comes with it, but politics wouldn't let it happen. Like i said earlier, the whole subsidy thing is a large and long standing fraudulent scheme called the 'Nigeria political compensation scheme'. Let me quick give you an example, go back to your archive and check out the 2011 'Friends of Jonathan' presidential campaign fund-raising programme and match the names of the people in attendance with the names of the people indicted for subsidy scam and see what you get.

These are the lobbyists. The ones you call the cabal. So sir, there, is your answer. Like a wise man once told me, buying is cheaper than begging, while stealing or taking is cheaper than buying. These people would rather falsify Bill of laden and delivery documents and get gauranteed fraudulent subsidy cash as compensation for their campaign investment than go thru the hassle and risk of doing the real business, which to me is dumb.

This is a very complex topic to discuss, it takes a first-hand experience of the whole thing to really understand it. Fortunately, Nigerians partially rose up to them and the result; the cabal has been broken back to the original 7. Now the rest have to really do the work and get compensated in another way. This answers why Dangote is suddenly interested in building an $8B refinery with majorly local 'partners'. It's a little complex sir. Just a little...lol

hercules07:


Total dropped the cash to build a refinery for export, they are refining in Saudi Arabia, a stonethrow away, SADARA is building a petrochemical plant to use the products from the refinery, Total will sell the refined oil in Saudi Arabia if a market exists there, there is a huge market for refined products in Nigeria seeing as we import refined products, so, what stops the government from doing the same thing as the Saudi Arabian government? Total needs to earn, it will sell to the devil if he can pay on time, Nigeria can pay on time, why are we not doing this in our country, the number of people employed in that refinery is over 2 thousand, the added value is more than the $20bn used to build it.

Total does not sell refined oil in Saudi Arabia, why all the twist and turn. Total sells refined oil in Nigeria, because, they are one of the companies playing the mother vessel game. You can can them in Saudi and ask for quote for a delivery to Nigeria.

playboy19:


LOL, funny. Now i know where your problem lies. With your above statement, i can tell you are still living in the '70s. Get enlightened dude, Nigeria has shortlisted the number of NNPC importers back to the original 7 right after the subsidy saga. Plus the 7s can't even source the product from any other company outside the trio of Trafigura, Glencore or Vitol S.A. Any document of delivery from any other company outside of these three will not be accepted. Like i said, get enlightened. Let's talk about something else.

Below is the list of your (7) anointed PPRA importers. You need to enlighten yourself, before you even worry about me. Trafigura, Glencore or Vitol have their mother vessels 100 km off our shores, they sell to anybody bringing cash.

The participating companies include: the Nigerian National Petroleum Company (NNPC), Aiteo Energy, Ascon Oil, Avidor Oil and Gas, A-Z Petroleum, Bovas, Conoil Plc, Dee Jones Petroleum and Gas, Dozzy Oil and Gas, Folawiyo Energy, Fresh Synergy Ltd and Forte Oil Plc.

Others are: First Deepwater Discovery Ltd, Gulf Treasure Ltd, Heyden Petroleum, Ibafon Ltd, Integrated Oil and Gas Industries, IPMAN Refining and Marketing Ltd, Mobil Oil Plc., MRS Oil and Gas Ltd, MRS Oil Plc., NIPCO Plc., Northwest Petroleum & Gas Ltd, Oando Plc., Obat Petroleum Ltd, RainOil Ltd, Rahamaniyya Oil & Gas, Sahara Energy Ltd, Shorelink Oil Ltd, Swift Oil Ltd, Techno Oil Ltd and Total Nigeria Plc.

atlwireles:


Total does not sell refined oil in Saudi Arabia, why all the twist and turn. Total sells refined oil in Nigeria, because, they are one of the companies playing the mother vessel game. You can can them in Saudi and ask for quote for a delivery to Nigeria.

What the heck are you saying, Total refines oil in Saudi why can they not refine in Nigeria, they started the project 4 years ago, if your government had their head screwed on tight, that refinery will be in Nigeria not Saudi Arabia, the roles will be reversed, they will refine in Nigeria and sell in Nigeria, they are playing the mother vessel game because the government allows them to, why dont they try that nonsense in Saudi and see how far they will get.

hercules07:


What the heck are you saying, Total refines oil in Saudi why can they not refine in Nigeria, they started the project 4 years ago, if your government had their head screwed on tight, that refinery will be in Nigeria not Saudi Arabia, the roles will be reversed, they will refine in Nigeria and sell in Nigeria, they are playing the mother vessel game because the government allows them to, why dont they try that nonsense in Saudi and see how far they will get.

Has Nigeria stopped total from refining here? Did we stop Shell, Exxon or Chevron from refining, the question you should ask yourself, why are they are not doing it.. Chevron just completed their GTL refinery plant in Escavos, why are they not selling any of that product here? Nobody is trying to invest in a losing business, not even yourself.

[

quote author=VolvoS60 post=27222739]

^^^
No sir, oil is not a curse. Oil is what you make of it. For every Nigeria (that has turned oil into the devil's excrement and mortgaged the future of its generations unborn), there is a Norway (a country in which unborn children will start life with a surplus in nearly every sense of the word).

Norway has a population of eleven million people, is the world's second largest producer of oil, and has a strong diversified economy with a strong industrial component.

Nigeria produces far less oil, and our industries barely exist.

As I have said on this thread and others, Nigerians need to know from the powers that be how much it costs to produce petroleum products LOCALLY. We need to know!!!


If indeed there was no monkey business going on, then the statistic I am asking for should be at every government functionary's fingertips i.e. it costs NGN40 or NGN50 (or whatever) to produce a litre of locally refined PMS, DPK or AGO in Nigeria. Why is it so hard to get the truth?

You keep avoiding the elephants in the room...the fact that

1,Our refineries are not producing at full capacity

2.The fact that we do not have enough refineries

3.The fact that we are importing refined crude...at market prices.

All we need to do is to increase domestic production....if you want a subsidy that works.

playboy19:


Sir, you have asked a very valid question that any sensible Nigerian should be asking but unfortunate, politics wouldn't let you get the answer. You may think Nigerian business men were not thinking about building refineries and all the benefits that comes with it, but politics wouldn't let it happen. Like i said earlier, the whole subsidy thing is a large and long standing fraudulent scheme called the 'Nigeria political compensation scheme'. Let me quick give you an example, go back to your archive and check out the 2011 'Friends of Jonathan' presidential campaign fund-raising programme and match the names of the people in attendance with the names of the people indicted for subsidy scam and see what you get.

These are the lobbyists. The ones you call the cabal. So sir, there, is your answer. Like a wise man once told me, buying is cheaper than begging, while stealing or taking is cheaper than buying. These people would rather falsify Bill of laden and delivery documents and get gauranteed fraudulent subsidy cash as compensation for their campaign investment than go thru the hassle and risk of doing the real business, which to me is dumb.

This is a very complex topic to discuss, it takes a first-hand experience of the whole thing to really understand it. Fortunately, Nigerians partially rose up to them and the result; the cabal has been broken back to the original 7. Now the rest have to really do the work and get compensated in another way. This answers why Dangote is suddenly interested in building an $8B refinery with majorly local 'partners'. It's a little complex sir. Just a little...lol

^^^^
Sir, I have been watching the exchange between you and that other fellow. I noticed he has carefully avoided giving answers to the questions you asked. I will be asking him a few questions of my own too in a few minutes. I hope he responds.

When bushdoc started this thread, some posters commended him for his points and called (those who disagreed with him) illiterates. Their mistake is that no one really knows who is lurking behind any given keyboard.

My repeated questions about cost profiles for local PMS/DPK/AGO production are based on my 'crude' understanding of the concept of price discrimination. I expect local producers/refiners to pay less than the international price of crude oil for very compelling reasons which should be clear to all. That is the basis for my shrill questions (which by the way still stand and demand answers).

Some of us know the drill. We know a little bit about what's going on behind the scenes but we need the defenders of the status quo and the forces of reaction to state their own side and slowly expose themselves bit by bit. That's why we ask the questions we ask. If only more Nigerians could ask more questions AND demand answers. If only...

VolvoS60:



^^^^
Sir, I have been watching the exchange between you and that other fellow. I noticed he has carefully avoided giving answers to the questions you asked. I will be asking him a few questions of my own too in a few minutes. I hope he responds.

When bushdoc started this thread, some posters commended him for his points and called (those who disagreed with him) illiterates. Their mistake is that no one really knows who is lurking behind any given keyboard.

My repeated questions about cost profiles for local PMS/DPK/AGO production are based on my 'crude' understanding of the concept of price discrimination. I expect local producers/refiners to pay less than the international price of crude oil for very compelling reasons which should be clear to all. That is the basis for my shrill questions (which by the way still stand and demand answers).

Some of us know the drill. We know a little bit about what's going on behind the scenes but we need the defenders of the status quo and the forces of reaction to state their own side and slowly expose themselves bit by bit. That's why we ask the questions we ask. If only more Nigerians could ask more questions AND demand answers. If only...

Please shoot off your questions

calaharry:

Modern refineries are wht we need not obsolete technology we can't use and kept refining abroad.

Iraq's newest refinery is older than our oldest refinery, yet they are not complaining about old technology.

atlwireles:


I love this, Nigerians always living in a different universe. People like you should push for production cost, pricing, which stands at about $30 a barrel for Nigerian crude. Then you might have a N40 per liter price. Please enjoy your driving.

Even in 2014, some are still living in delusion.

^^^^
Kindly explain your point above, sir.

I notice you are comparing production costs (your figures, sir) of $30 per barrel with a N40 per litre price. Apples and oranges?

atlwireles:


Anybody calling Nigerian Oil subsidies a scam, is not worth much weighted up or down. You called yourself an industry insider, so you know the cost of production for Nigerian crude is about $20-40 per barrel.

Please lead another demonstration, so government can sell you petrol at cost price. You wonder why you people are dying of poverty, because some of you are constantly trying to reinvent the wheel. Goodluck with your free/cheap oil.

^^^^
Your post above quotes Nigerian crude barrel costs at between $20 and $40 per barrel. (again your figures, sir).

Once again, I ask, what does that translate to in Naira per litre?

atlwireles:


Has Nigeria stopped total from refining here? Did we stop Shell, Exxon or Chevron from refining, the question you should ask yourself, why are they are not doing it.. Chevron just completed their GTL refinery plant in Escavos, why are they not selling any of that product here? Nobody is trying to invest in a losing business, not even yourself.

. Bros saudi arabia is the second largest country in the world subsidizing fuel for it citizen but still yet all this companies can invest in there refineries.

VolvoS60:


^^^^
Kindly explain your point above, sir.

I notice you are comparing production costs (your figures, sir) of $30 per barrel with a N40 per litre price. Apples and oranges?

The price to get crude from the ground to a loading docking in Bonny or Escarvos is about $30 per barrel for Nigerian oil.

If, as some of you demand, the government sells to NNPC at cost, instead of the current system, where the 30 day NYSE average is used in setting the price. Then the price at the pump will be about N40.

VolvoS60:


^^^^
Your post above quotes Nigerian crude barrel costs at between $20 and $40 per barrel. (again your figures, sir).

Once again, I ask, what does that translate to in Naira per litre?

I just answered you in a post above.

blym4real:
. Bros saudi arabia is the second largest country in the world subsidizing fuel for it citizen but still yet all this companies can invest in there refineries.

Has Nigeria stopped anybody from investing in refineries?

atlwireles:


The price to get crude from the ground to a loading docking in Bonny or Escarvos is about $30 per barrel for Nigerian oil.

If, as some of you demand, the government sells to NNPC at cost, instead of the current system, where the 30 day NYSE average is used in setting the price. Then the price at the pump will be about N40.

^^^
Let me see if I understand you. So it costs $30 to get a barrel of oil from the ground to a terminal at Escravos. Let us take your figures as given.

I do not know how you arrived at a pump price of N40 though. Is that the pumphead price per litre before or after all refining and associated costs have been factored in?

atlwireles:


Has Nigeria stopped anybody from investing in refineries?

you should know there is a cabal seeing to that.

Check this out

VolvoS60:


^^^
Let me see if I understand you. So it costs $30 to get a barrel of oil from the ground to a terminal at Escravos. Let us take your figures as given.

I do not know how you arrived at a pump price of N40 though. Is that the pumphead price per litre before or after all refining and associated costs have been factored in?

I am trying to post the PPRA template, without much success. If we use the current price of N97, based on a barrel of crude oil selling for $95 including refining and landing cost. N40 becomes an approximate pump price.

blym4real:
you should know there is a cabal seeing to that.

There is no cabal, just business men staying away from a losing business. dangote is building a refinery, all he will do is become the new Trafigura, Glencore or Vitol. NNPC will be buying from him.

What is funny, is the price of crude has dropped to about $82 in last 3 months, it has been almost I trillion dollars saving to customers, just not in Nigeria.

bushdoc9919:


Before you send me to the stake consider this

1.Our refineries are not operating at full capacity

Yet, this same government increased Crude Allocation for local consumption from 250,000 bbls/d to 450,000bbls/d. So what has been happening to the crude oil not being refined because the local refineries are not operating at full capacity?

bushdoc9919:

2.Even if they were operating at full capacity...we still have to import to make up the projected shortfall in domestic production (and recall that oil prices are very high....and are set to rise up).

The combined capacity of our refineries should meet minimum 70% of local demand (by NOI's submission in 2012) and thus only 30% should be required, and this shortfall can surely be met by the amount generated from selling the unused allocation for local refining. Note that our total local consumption id 250,000bbls/d at FULL CAPACITY, so from the alloted 450K, we have 200,000 bbls/d to finance the remaining 30%.

bushdoc9919:

3,And we are paying subsidy money, on top of the billions spent on importation(and some oil subsidies are being paid to importers)

This is Voodoo economics, subsidy is only paid on what is imported and sold cheaper. It is teh difference between the cost of procurement and sales cost.

bushdoc9919:

4.And we are not producing enough fuel....we produce far less than the UAE and even Saudi.

And yet UAE and Saudi have MORE functioning refineries than us

bushdoc9919:

That is the problem....ultimately the oil money is not enough and the subsidy money needs to be spent on industrial support infrastructure...so that we can get off oil.

Subsidy money is NOT spent on any support infrastructure, subsidy money is claimed to be spent on subsidizing the cost of fuel. Please do not spread any FUD.

bushdoc9919:

Oil is a curse.

Surely, UAE is not cursed; Saudi is not cursed; Qatar is not cursed; Is not from the oil and it's blessings that Dubai can make snow fall in the desert and Americans come skiing! Haba, we are the ones that need to examine ourselves, oil is a blessing.

atlwireles:


I am trying to post the PPRA template, without much success. If we use the current price of N97, based on a barrel of crude oil selling for $95 including refining and landing cost. N40 becomes an approximate pump price.

^^^^
I see.

I do not quite understand the math here. (My limited education was obtained in a provincial setting with angry, disgruntled math teachers but that is a story for another day). But again, let's take your figures as given.

If 'all in' costs amount to NGN40 per litre (I assume we are talking about PMS here) and the pumphead price is NGN97 per litre, could someone explain what is going on? Is there or is there not any markup or subsidy in this equation?

atlwireles:


There is no cabal, just business men staying away from a losing business. dangote is building a refinery, all he will do is become the new Trafigura, Glencore or Vitol. NNPC will be buying from him.

I rest my case. Tell me the reason why new refineries hasn't been built either by private or the government for the past 12 years.

atlwireles:


I love this, Nigerians always living in a different universe. People like you should push for production cost, pricing, which stands at about $30 a barrel for Nigerian crude. Then you might have a N40 per liter price. Please enjoy your driving.

Even in 2014, some are still living in delusion.

Bros, you need some education/enlightenment big time.

The highest Production cost per barrel in Nigeria is $12, at a time it went as low as $8 until the Niger Delta militancy. So please read more!

VolvoS60:



^^^^
I see.

I do not quite understand the math here. (My limited education was obtained in a provincial setting with angry, disgruntled math teachers but that is a story for another day). But again, let's take your figures as given.

If 'all in' costs amount to NGN40 per litre (I assume we are talking about PMS here) and the pumphead price is NGN97 per litre, could someone explain what is going on? Is there any markup or subsidy in this equation?

The price NNPC pays, is based on the 30 days NYSE average. NNPC is not buying crude at cost, they pay the same price as shell, chevron and Exxon. Back in 2012 when price was set at N97, a barrel was almost $120. Today price is down to $81, we are actually paying more for petrol in Nigeria today, than someone in west Texas, today. This was the same thing that happened with Yaradua, when he reduced price to N65, only to regret it 6 weeks later. Because crude jumped by almost 40%.

There are people that want to sell oil at cost. I am not one of them. Oil is a commodity, like cocoa, rice, palm oil etc. Let try it that way. That's all Nigeria is trying to do.