U.A.E. Removes Fuel Subsidy as Oil Drop Hurts Arab Economies

The United Arab Emirates, the third-biggest OPEC producer, will link gasoline and diesel prices to global oil markets starting next month, becoming the first country in the oil-rich Persian Gulf to remove transport fuel subsidies.

Fuel prices will be deregulated as of Aug. 1, the Ministry of Energy said in a statement on Wednesday. Diesel prices will also be linked to global markets, and are initially expected to decline, it said. Prices for both fuels will be announced on the 28th day of each month, the ministry said.

Gasoline is now subsidized in the U.A.E., the second-biggest Arab economy and home to about 6 percent of the world’s oil reserves. Unleaded gasoline 98 octane in the U.A.E. sells for 1.83 dirhams (50 cents) a liter, according to prices on the ministry’s website. The U.S. price of premium unleaded gasoline is $3.18 a gallon, or 84 cents a liter, according to AAA, the biggest U.S. auto group. That compares with 16 cents in Saudi Arabia, the largest OPEC producer.

“There was no reason to subsidize in a country that is as rich as the U.A.E.,” said Nasser Saidi, former chief economist at Dubai International Financial Centre and head of Nasser Saidi and Associates. “All manufacturing and industry which is highly energy intensive will need to adjust. People will now have to think twice before buying gas guzzling cars.”

http://www.bloomberg.com/news/articles/2015-07-22/u-a-e-to-link-gasoline-price-to-global-markets-effect-aug-1



Cc: Lalasticlala, Obinoscopy, Mynd44

Saudi Arabia fuel subsidies cut as crude revenue dive


Confronting a drop in oil prices and mounting regional turmoil, Saudi Arabia reduced energy subsidies and allocated the biggest part of government spending in next year’s budget to defence and security.

Authorities announced increases to the prices of fuel, electricity and water as part of a plan to restructure subsidies within five years. The government intends to cut spending next year and gradually privatise some state-owned entities and introduce value-added-taxation (VAT) as well as a levy on tobacco.

The biggest shake-up of Saudi economic policy in recent history coincides with growing regional unrest, including a war in Yemen, where a Saudi-led coalition is battling pro-Iranian Shiite rebels. In attempting to reduce its reliance on oil, the kingdom is seeking to put an end to the population’s dependence on government handouts, a move that political analysts had considered risky after the 2011 revolts that swept parts of the Middle East.

“This is the beginning of the end of the era of free money,” said Ghanem Nuseibeh, founder of London-based consulting firm Cornerstone Global Associates. “Saudi society will have to get used to a new way of working with the government. This is a wake-up call for both Saudi society and the government that things are changing.”

http://oeronline.com/industries/energy/saudi-arabia-fuel-subsidies-cut-as-crude-revenue-dive.html


Why Nigeria should do the same

United Arab Emirate has an estimated population of 10 Million in 2015
Saudi Arabia has an estimated population of 32 Million in 2015
Nigeria has an estimated population of 170 million in 2015

United Arab Emirate produce an average of 3 million barrel of oil per day
Saudi Arabia produce an average of 10 million barrel of oil per day
Nigeria produce an average of 2.2 million barrel of oil per day.

United Arab Emirate refine 1Million barrel of crude a day(about 80million litres of petrol a day)
Saudi Arabia refine 3million barrel of crude oil a day (about 240million litres of petrol a day)
Nigeria refine 300 thousand (0.3 million) barrel of crude oil a day (about 24million litres of petrol a day)

UAE and Saudi Arabia do not import petrol. Their refinery operate at more than 95% capacity. All their fuel consumption is produce domestically.
Nigeria import 80% of petrol consume in the country because Nigeria refinery find it difficult to operate at 50% capacity. Most times all the petrol consume in Nigeria are imported.

if UAE and Saudi Arabia can not afford subsidy anymore despite producing and refining their petrol in their country, I don't think Nigeria who import almost all the petrol it consume can continue with subsidy.

Nigeria is a country with no infrastructure. Instead of wasting the little money we have on consumption through subsidy that favour the rich more than the poor, the money should be directed to area which have more impact in the lives of average Nigerians.

The more the number of cars you have, the bigger your car and fuel consuming generators, the more your capacity to fuel the cars and generators the more you benefit from subsidy. And it is the rich and upper middle class that falls into this categories.

Price can still be regulated even if subsidy is removed. Govt can set quaterly minimum and maximum price. This is being done in canada. And it can be done in Nigeria. This is shown below

Price Regulation


The Canadian government has constitutional authority to regulate gasoline prices only in an emergency. However, provinces and territories can regulate prices, and Quebec and the Atlantic provinces do so.

Provinces regulate gasoline prices to reduce price volatility -- high up or down price changes -- and to protect small independent retailers.

Quebec

Quebec sets minimum prices weekly based on its estimate of the acquisition cost of gasoline. The price includes an estimate of transportation costs and can include a minimum retail margin at the discretion of the regulating body, the Regie de l’energie du Quebec.

New Brunswick

In New Brunswick, the Energy and Utilities Board sets the maximum price every Thursday based on a formula that links the price to the New York Harbour price, with allowances made for other factors such as retail margins. No minimum price is set.

Nova Scotia

Nova Scotia also uses New York Harbour spot prices to set a benchmark price. Wholesale prices are set 6 cents a litre higher than the benchmark, and a transportation allowance is included in the price, ranging from 0.2 to 2.0 cents per litre, depending on the zone. Retailers are allowed a margin of 5.5 cents per litre and cannot sell below a margin of 4 cents per litre.

Prince Edward Island

In Prince Edward Island , prices are set by the Island Regulatory Appeals Commission. The Commission has full discretion in setting prices and tracks a wide variety of trends in determining the price level. In practice, it also uses New York Harbour prices to drive changes in the regulated price. Prices on the New York Mercantile Exchange (NYMEX) are averaged over a two week period and the new maximum and minimum prices are usually announced on the first and 15th of every month. Wholesalers have the right to apply for a decrease in their wholesale price. In theory, this could result in different prices from one brand to another. In practice, any such differences are rare and short-lived.

Newfoundland and Labrador

In Newfoundland and Labrador, the price of gasoline is set by the Board of Commissioners of Public Utilities. The Board sets a benchmark price based on spot market prices and adds on various factors such as wholesale and retail margins, transportation and taxes to arrive at a maximum price. The province is divided into 18 zones to accommodate differing transportation costs. Prices are revised monthly.

http://www.consumerscouncil.com/index.cfm?id=13904






Cc: Lalasticlala, Obinoscopy, Mynd44

it's high time we remove this subsidy once and for all!

Next should be nigeria

Why Nigeria should do the same

United Arab Emirate has an estimated population of 10 Million in 2015
Saudi Arabia has an estimated population of 32 Million in 2015
Nigeria has an estimated population of 170 million in 2015

United Arab Emirate produce an average of 3 million barrel of oil per day
Saudi Arabia produce an average of 10 million barrel of oil per day
Nigeria produce an average of 2.2 million barrel of oil per day.

United Arab Emirate refine 1Million barrel of crude a day(about 80million litres of petrol a day)
Saudi Arabia refine 3million barrel of crude oil a day (about 240million litres of petrol a day)
Nigeria refine 300 thousand (0.3 million) barrel of crude oil a day (about 24million litres of petrol a day)

UAE and Saudi Arabia do not import petrol. Their refinery operate at more than 95% capacity. All their fuel consumption is produce domestically.

Nigeria import 80% of petrol consume in the country because Nigeria refinery find it difficult to operate at 50% capacity. Most times all the petrol consume in Nigeria are imported.



if UAE and Saudi Arabia can not afford subsidy despite producing and refining their petrol in their country, I don't think Nigeria who import almost all the petrol it consume can continue with subsidy.

front page

When a globally celebrated and accomplished economist was part of the team that told Nigerians it was time to do the same, some r◇tarded carcasses matched to Freedom Park in Ojota to show the learned and international community their folly.

A wasted opportunity to totally diversify the Nigerian economy and make it bigger than it's 2015 status of the biggest economy in Africa.

Now the zombies are back in power cheered on by their gullible supporters here to finally waste the nation they had no part in building.

The portions of all enemies of Nigeria in the Lake of Fire await them!

tswitch:
When a globally celebrated and accomplished economist was part of the team that told Nigerians it was time to do the same, some r◇tarded carcasses matched to Freedom Park in Ojota to show the learned and international community their folly.

The reason for the march wasn't an economic one. GEJ's administration gaffed on the presentation and implementation like it did on so many national issues. The citizens didn't trust the government, and recent revelations about the widespread corruption in his administration have proved us right.
Remember, there was partial shbsidy implementation.What was the money saved used for?

The earlier PDP apologists realise that the Umbrella, and the Broom, are not bigger than Nigeria, the better.

Nigeria what are you doing?

tswitch:
When a globally celebrated and accomplished economist was part of the team that told Nigerians it was time to do the same, some r◇tarded carcasses matched to Freedom Park in Ojota to show the learned and international community their folly.

A wasted opportunity to totally diversify the Nigerian economy and make it bigger than it's 2015 status of the biggest economy in Africa.

Now the zombies are back in power cheered on by their gullible supporters here to finally waste the nation they had no part in building.

The portions of all enemies of Nigeria in the Lake of Fire await them!

Stop chasing shadows & peddling bad belle opinions..

Nigerians were not against the removal in principle but cos they didn't trust (rightly so) the government to do right by them, we know they are not sincere & will never be judicious with any savings....

By the way "Mr unretarded Solomon of our time" who loves Nigeria more than the next person---- , what happened to the proceeds of the partial removal of subsidy? Lawan & Otedola drama, how far?

Kindly highlight just 2 ways it benefited the average Joes & janes .....

You have till May 29th 2019 to give an answer!!!! Uhhhhhmm!

tswitch:

...

Ah, ignore my earlier comment. It seems you're still listening to TAN mixtape by Dj Ubah and Subsidy crew. Election don end o...

modath:


Stop chasing shadows & peddling bad belle opinions.. Nigerians were not against the removal in principle but cos they didn't trust (rightly so) the government to do right by them, they know they are not sincere & will never judicious with any savings....

By the way "Mr unretarded Solomon of our time", what happened to the proceeds of the partial removal of subsidy?

Kindly highlight just 2 ways it benefited the average Joes & janes..... You have till May 29th 2019 to give an answer!!!! Uhhhhhmm!

Na wa o... twinny

modath:


Stop chasing shadows & peddling bad belle opinions.. Nigerians were not against the removal in principle but cos they didn't trust (rightly so) the government to do right by them, they know they are not sincere & will never judicious with any savings....

By the way "Mr unretarded Solomon of our time", what happened to the proceeds of the partial removal of subsidy?

Kindly highlight just 2 ways it benefited the average Joes & janes..... You have till May 29th 2019 to give an answer!!!! Uhhhhhmm!

Nigeria did not trust the govt in 2012 because of massive corruption at that time.

meetmonde:
greed of d highest order

how is it greed?

musKeeto:

Na wa o... twinny

I'm like, gerra a ma head mehn!!!

front page Mynd44

tuale4u:


how is it greed?

you post a topic and went ahead to be FTC.... if you want the FTC so bad, go ahead and eat it

meetmonde:
you post a topic and went ahead to be FTC.... if you want the FTC so bad, go ahead and eat it

Bro I wasn't FTC
The first one is for UAE
The second one for Saudi Arabia
They are both part of the original post.

bros no vex

Charliewyt:
Next should be nigeria

Nigeria should follow suit

modath:


Stop chasing shadows & peddling bad belle opinions.. Nigerians were not against the removal in principle but cos they didn't trust (rightly so) the government to do right by them, we know they are not sincere & will never be judicious with any savings....

By the way "Mr unretarded Solomon of our time" who loves Nigeria more than the next person---- , what happened to the proceeds of the partial removal of subsidy? Lawan & Otedola drama, how far?

Kindly highlight just 2 ways it benefited the average Joes & janes .....

You have till May 29th 2019 to give an answer!!!! Uhhhhhmm!

Like your **** response does not show your low reasoning ability.
Maybe you could learn by getting your information from informed people and reliable sources than those trashy blogs and news media you apparently read.......just maybe.
If you do not understand how well an economically stable Nigeria benefits the common man, it is your problem not mine.
Little wonder **** like you make we all think your generation has nothing to offer.
Pathetic!

tuale4u:


Nigeria did not trust the govt in 2012 because of massive corruption at that time.

And the present "incorruptible" government is still paying same petroleum product marketers subsidy with over 20% increase in payments for Q3 amd Q4.

Incredible!

****

Its funny ... U can find all d reasons u want 2 support subsidy removal bt d fact remains that APC was against it solely on d ground of higher fuel pump price n Nigerians can't afford dat n d same still stands nw.. I dnt trust dis govrnment so let's enjoy our subsidy since we fell inlove. With it in 2012

modath:
Stop chasing shadows & peddling bad belle opinions.. Nigerians were not against the removal in principle but cos they didn't trust (rightly so) the government to do right by them, we know they are not sincere & will never be judicious with any savings....

By the way "Mr unretarded Solomon of our time" who loves Nigeria more than the next person---- , what happened to the proceeds of the partial removal of subsidy? Lawan & Otedola drama, how far?

Kindly highlight just 2 ways it benefited the average Joes & janes .....

You have till May 29th 2019 to give an answer!!!! Uhhhhhmm!

There is another fundamental difference between removing subsidy right now and doing so back in 2012, which most people are not thinking about.
---
Back in 2012, subsidy removal would have resulted in an instant increase in pump price of PMS from N67 to N141, whereas any subsidy removal right now will have no immediate effect on pump price of PMS.
---
So, from a psychological standpoint, Nigerians are less likely to resist subsidy removal right now the way they did back in January 2012.

musKeeto:

The reason for the march wasn't an economic one. GEJ's administration gaffed on the presentation and implementation like it did on so many national issues. The citizens didn't trust the government, and recent revelations about the widespread corruption in his administration have proved us right.
Remember, there was partial shbsidy implementation.What was the money saved used for?

The earlier PDP apologists realise that the Umbrella, and the Broom, are not bigger than Nigeria, the better.

Your first sentence just helped drive my point home.
The reason for the march by the enemies of Nigeria and their imbec¡lic cohorts was an obvious calculated attempt to stall the growth of the entity called Nigeria and hence showcase folly.
Which widespread corruption news? Dasukigate? Or has Buhari returned his own share of the "security vote" ?
It is very sad if you believe learned persons would ever believe Lia Mohammed controlled misinformation?
We await further drama from the anals of the APC lead government..... till we watch Dasuki live on TV and hear him debunk most stories going around.......that if he is not silenced.

musKeeto:

Ah, ignore my earlier comment. It seems you're still listening to TAN mixtape by Dj Ubah and Subsidy crew. Election don end o...

And you obviously have no inkling of the subject matter as you are apparently still holed up in the dark hollow cranial cavity you call a brain.

Subsidy makes no sense.

Pavore9:
Subsidy makes no sense.

true

Remove subsidy this, remove subsidy that ... ...and I keep asking myself and these advocates of fuel subsidy removal that, 'is Nigeria as Prudent in managing their oil as U.A.E'?

tomakint:
Remove subsidy this, remove subsidy that ... ...and I keep asking myself and these advocates of fuel subsidy removal that, 'is Nigeria as Prudent in managing their oil as U.A.E'?

if they cannot fund subsidy because of the drop in oil price despite the fact that they have functional refinery and low population, how do you expect Nigeria to fund it.

Before naija progresses ehn, chai!!!

See pple saying that they voted for subsidy during GEJs time, cause he was corrupt

Meeeeeeeen

That's my naija for u though, filled with hypocrites.

U can't be a hypocrite and be expecting progress simultaneously