Fourwinds:
u don't need to tell me all dis..I know what subsidy look like ok... now let's go back to GEJ's regime...when d price of oil was above $100/ barrel oil., d government said it was paying subsidy...don't forget d same time we were favour by d rise in prices of crude oil...so I expect d government to save for d famine ok...dat government was desperate to remove d subsidy because it spent extravagantly through corruption...so we were subsidizing thieves dat EFCC is chasing today...now to d recent... when d price of oil started dropping., we have little or no saving... d effect was unpaid salary in most states of d federation toward d tail end of GEJ government...now in dis present govt.. all marketers are well scrutinized and product seen before government pay..since deir is a drop in crude ., d money for import and other logistics were also affected....infact d price of petrol id around #70... dis govt may be wise for leaving it at #86.50 because of any sharp change

erico2k2:

I got ur point I will respond to this in a bit.but try and respond to mine first so we do t get it twisted plz.check my analysis and give ur answer or suggestions. I'm trying to steer us to the realistic fact that nobody can remove subsidy in Nigeria for the next 10 years. That simple illustration I gave should drive the point home or close enough

Fourwinds:
d question is how did we get to this point.? we were not importing refine products when our refinaries were working...thieves and wicked Nigerians saw loopholes and destroyed our pipelines and refinaries....governments rite from IBB till GEJ never saw any reason to build modern refinaries.. so corruption was let lose in d name of subsidy...


subsidy can be stop...I don't buy ur pessimism...

how.? Dangote has shown interest in putting up a refinary or refinaries.. others may show interest too..

no matter how cheap fuel is., people will still make gain...greed is what is driving Nigerians crazy....everybody wants to make it at once

erico2k2:

Ok let me pick on some of your points now regard petrol to be cheap do you know the cost of the cheapest pump price in the world as at today? It's £0.20. do yoy know that?

Fourwinds:
I disagree.. pounds is to UK.. not individual countries...How much is it in Venezuela., Qatar etc..


in Nigeria.... a pounds is around #450 or there about...

so if we do d calculation....0.20× 450 =#90..

is dat our price now.

klassicview:
hypocrisy is when u protest in Lagos and Kano over fuel subsidy removal under GEJ and don't under PMB.

Caseless:
I wonder what would have become of Nigeria if that hat-capped and ineffectual-B had continued as our president. Corruption associated with subsidy is monumental!



Jonathan for kuje prison!

bashribb:
wailing waiver when subsidy is removed during GEJ n PMB wat happened to the price of fuel? m sure u will remember that one rose( doubled) the other decreased. so u c!!!

lookandlaff:


you clearly are not able to follow logic, the "if" exists because a subsidy regime is still in place, that you are not paying now doesn't mean it no longer exists. If you had abolished subsidies there would be no if, why are we so dull?

Do you understand what a regulated market is?


on your point aboout budget, the budget is based on $38 a barrel, at that level there is no need to subsidize fuel so why make provision in the budget when you don't anticipate a need for subsidies? That you don't make provision because you feel there wont be a need doesn't mean you have abolished subsidies.


Put it this way, you pay your child'd school fees, government now says we education is your child's school is free. Because there are no more school fees, when you plan your expenses you dont allocate money for school fees. But all of this does not mean you have decided to stop paying for your child's school fees. The day govt starts charging for school fees again you will make provision for school fees.

You saying govt has removed subsidies because it currently has no need to pay subsidies is like saying a mana has said he is no longer going to pay his child' school fees simply because for now there are no fees to pay.

Achuwa1:
Many graduate was to be employed thru SURE-P b4 a court case against sure-p came up & it was halted...
. So u don't blame previous govt. for the woes we are facing today,but blame the present leadership coz he lacks gud economic team...
what does it take him to set up an economic team in the country to see how they can save us from dis economic woes & make recommendation on what the govt.should do.
pmb dictatorial lifestyle & illiteracy is what has plung us to where we are today..

Sant1m:
Yes PMB is an illiterate, i just hope you can can see illiteracy written all over your comment. You like it or not PMB has an economic team, he must not call them so because wailers are demanding for it. Go and find out the composition of any Govt economic team, PMB is not going to call anybody coordinating minister of the economy, full stop. There is absolutely nothing wrong with our economy, what we feel now is just a normal WITHDRAWAL SYMPTOM any addict will show if you take the source of the addiction away. Under Gej what we had was a bloated empty shelled economy, where production was not key to income, an economy where the major source of income was graft, rent seeking and patronage, the supply side of the black market under was was from revenue leakages i,e 2.1B dollar arms fund and others. And you call that an economy, managed by an economic team. What PMB is doing now will see us back to a production based economy, where sources of income will be labour, goods or services. Nigeria can be likened to a 300 level student that hitherto takes 1m to school every semester, the father suddenly makes a u turn, blocks access to his safe and he is now giving the boy 100,000. The boy and his friends will have nothing else to do but WAIL.

Caseless:
you haven't answered my question, but building your points around a different case. If there's subsidy , justify it. In anticipation of subsidy payment we might make in the future, it doesn't buttress the claim that subsidy exists. If you say subsidy is there, tell me how much we are buying kerosene now.

lookandlaff:

[s]
Jesus wept!

It is so difficult engaging people who are unable to reason, people who cannot use their brains, people who cannot think, people who are given a brain but refuse to use it, people who claim to have studied english but do not comprehend the English language. Educated illiterates!!!

For the last time:



Simple Definition of subsidy


: money that is paid usually by a government [b]to keep the price of a product or service low [/b]or to help a business or organization to continue to function


If the price of the product is already below the govt apprivved price due to market forces, then there is no need to pay a subsidy. A subsidy only arises when the market price rises above the govt approved price. @ the current price of Oil in the world market, the landing cost of petrol is below the govt regulated selling price of petrol @ N86l so there is no need to pay any subsidy.


If market forces have brought the price of the product below your approved price then there is no subsidy to pay, if it rises above the approved price then the subsidies will resume hence the "if". @ say $80 a barrel, the landing cost of PMS is above N86 so we pay subsidies, @$35 the landing cost of PMS is below N86 so what subsidy is there to pay? how can you pay a subsidy when the cost is below your selling price?



You cannot "remove" a subsidy that doesn't exist. at current price of crude there is no need tp pay a subsidy on petrol. it doesn't mean we have removed subsidies.


You set the price of something @ N10 but the actual cost is N12, so you pay a subsidy of N2. but the cost of the item drops to N9 it means you no longer have to pay the N2 subsidy, it does not mean you have "removed" the subsidy, all it means is "for now" you are not paying any subsidies. you keep the N1 profit as a buffer in case (i.e "if" ) the cost should rise above N10.

English is our problem, starting the the quack journalist who wrote the headline, we misuse words, not currently paying subsidies is not the same as "removed" subsidies.


Don't engage me anymore please, if you still don't get it then youve wasted your education.[/s]

erico2k2:

Good observation it's £0.20 in venuzuella and that's for up to %70 subsidy by the venuzuella govt now with your maths even if we buy from venuzuella we can never sell bellow N100. Is this not a clear indication the NNPC are scammers? ?let them publish what country they import from and the likes of me and you can check the cost o er there.or mayB they import from the moon.

989900:


Pump prices/l

Venezuela: N3.98k ($0.02)

Kuwait: N44.00 ($0.22)

Turkmenistan: N57.77 ($0.29)

Saudi: N47.76 ($0.24)

Qatar: N71.6 ($0.36)

Japan: 191.07 ($0.96)

Singapore: N246.76 ($1.24)

Brazil: N185.07 ($0.93)

India: N183.23 ($0.92)

China: N179.10 ($0.90)

Nigeria: N87.50 ($0.44)

Norway: N322.33 ($1.62)

More at http://www.globalpetrolprices.com/gasoline_prices/

And that list is as true as it gets, it is actually cheaper in some of those countries, because prices quoted for some of them are prices for higher octane PMS (Octane97), Octane 87,90,91,93, . . . are actually cheaper (I've been privileged to visit a few of those countries between December and now . . . the prices are on point).

P.S. Official exchange rate definitely applies; not ab0kifx.com. And if it were still less than N150 to a $, and we refine our crude, pump price would probably be in the N50/litre range (give or take).

Qatar, UAE, and a few middle eastern countries recently (a few weeks ago) increased their pump prices. #fallinrevenue

Meanwhile, remember our back and forth about OPEC'S relevance or lack of, OPEC and Russia just agreed to a 'freeze', not actually a cut -- let's watch how this pans out.

erico2k2:

ok we are same page, however aren't you forgetting a very important element to this list?[s] these are not the true value of the pump price, so are you telling me $0.20 is N3.98? did you do that maths or just copied waht someone wrote?[/s]
[s]as at N1 to $200 $0.20 is N40, so my friend your Sums do not add up, meanwhile that price is inclusive of up to %70 subsidy don't forget that.[/s]

989900:


Dear Erico, kindly go thru my post again, and familiarize yourself with my post. It is self-explanatory. Your response shows you didn't quite get a good grasp of it.

$0.02 NOT $0.20 (that will be 'times 10') @ N197 thereabout to a dollar is what?

Yes, fuel is N3.98 kobo (Three Naira, Ninety-eight kobo)/litre in Venezuela and,

Kuwait: N44.00 ($0.22)

Turkmenistan: N57.77 ($0.29)

Saudi: N47.76 ($0.24)

Qatar: N71.6 ($0.36) per litre.

I'm sorry to burst your bubble, but we all learn everyday.

I posted a link, why don't you go through, it'd be useful . . .

Like I said earlier, I practically lived/live some of those prices, and it is of course even cheaper for Octane91 and lower (as most of those prices are for 95, 97 Octane). And those prices are after Saudi, Qatar, UAE, and some others, just increased pump prices some few weeks ago, 'cause of their shortfall in oil revenue by removing fuel subsidies. The UAE oil minister practically said "we'r rich people we should be able to afford to pay without subsidy". Venezuela is heavily subsidized though.

http://www.newsofbahrain.com/viewNews.php?ppId=12820&TYPE=Posts&pid=22&MNU=18&SUB=
http://www.arabianbusiness.com/uae-to-cut-remaining-energy-subsidies--619552.html
http://www.pressreader.com/uae/khaleej-times/20160123/281479275428924/TextView

I do not like blowing trumpets and yada, yada, but . . . anyways, go read thru my post again.

erico2k2:

I did it's you who failed to understand me.did you add the %70 subsidy by thier govt or you think they will sell to Nigerians at that price?

989900:


Really? Whose gov't? Go thru my posts and yours again.

erico2k2:

The venuzuellan government subsidise petrol heavily hence that pump price so in theory me and you cannot go and buy petrol and export it at that price we will ha e to pay VAT and the full cost minus up to %70.
Thier subsidy bill is $50 billion a year. So they are going burst.
This is the reason NNPC is not buying from venuzuella.

erico2k2:
I have come to realize on this page some people turn to insult and abuse when they have been found out regarding the meanings of the subject matter.SUBSIDY.is there any need for that,someone makes an editorial comment in one of the major news papers in Nigeria and we are here disecting it,some believe some dont, those that do come to the table with arguments without facts or figure why those that dont come to the argument table with facts and figure.I see people here pegging subsidy with the cost of crude Ok! so what's the relationship?It would be healthy to know we don't import crude but I brought that assumption up when i was debating with fourwinds when i said *think out of the Box*Even if the price of crude goes down the cost of PMS and its other subsequent product are not directly proportional to its cost reduction.Ie the FG just increased cost of power ,why .with all these noise of crude going down from $110 to $35 or so, one would like to think the pump price should at least reduce by %45 no way, accross the world false,in the Uk two years ago average PMS was £1.15 now its £0.97-£0.99 so where is the savings proportional to the dropping cost of crude.
So My question to every each and everyone of us who believe SUBSIDY was removed as we speak pleas I challenge you to guess or tell me what countries in the world this so called importers imported their own PMS from that they could afford to sell @ 86.[/b]i cited a country where cost of extraction was $8 and Pump prices was £0.20.that's the cheapest in teh whole world @%70 subsidy,Over to they that believe SUBSIDY was removed tell us where you think you can bring in product at landing cost @N75 as claimed by the editor of the newspaper.

2. Pump price in Venezuela is less than N4.00 ($0.02) if you are using their official exchange rate, at their black market rate, it is actually less than 0.5 cent (around 50 kobo a litre) -- let's just say it's free over there. And that's no biggie, they gift over 200,000 barrels of crude to Cuba Jamaica, Haiti and 2 other countries everyday!

Their break-even cost without subsidy to supply PMS in 2014 while crude was roughly $100/barrel was roughly $0.42/litre (about N60 in 2014 Naira). Then, even at $100/barrel their 'direct subsidy' payment was roughly $20b; not $50b ($50b is, when you factor all their losses from being st00pid). Of course their refineries are more or less like ours -- they import refined products too! #oilisacurse

At the moment, they pay less than $10b in direct subsidies, and their pump price is still dirt-cheap (without subsidy prolly around N35-N45/litre, with subsidy, let's just say free! ); far from the 0.2 pounds (N90/litre according to you and 'Fourwinds' calculation which actually should have been N56.2/litre . . . it's traded at the official rate, not BM RATE) you based your analogy on. Venezuela is not your typical example for anything oil.

3. If you use the likes of Saudi, Qatar and e.t.c, it's still very cheap; pump price at $0.20/litre (N47-N71/litre). And, note they just purposely increased their pump prices to augment for fall in revenues it was far cheaper before, it could have been less than N25/litre, but they all kinda removed subsidy.

Hope you get the drift . . . it is very possible for landing costs of PMS in Nigeria to be around N60/litre -- they are 'making a killing' already ('prolly' why NNPC does most of the importation now)!
The below is my earlier response (indicating Venezuela's heavy subsidy):

Dear Erico, kindly go thru my post again, and familiarize yourself with my post. It is self-explanatory. Your response shows you didn't quite get a good grasp of it.

$0.02 NOT $0.20 (that will be 'times 10') @ N197 thereabout to a dollar is what?

Yes, fuel is N3.98 kobo (Three Naira, Ninety-eight kobo)/litre in Venezuela and,

Kuwait: N44.00 ($0.22)

Turkmenistan: N57.77 ($0.29)

Saudi: N47.76 ($0.24)

Qatar: N71.6 ($0.36) per litre.

I'm sorry to burst your bubble, but we all learn everyday.

I posted a link, why don't you go through, it'd be useful . . .

Like I said earlier, I practically lived/live some of those prices, and it is of course even cheaper for Octane91 and lower (as most of those prices are for 95, 97 Octane). And those prices are after Saudi, Qatar, UAE, and some others, just increased pump prices some few weeks ago, 'cause of their shortfall in oil revenue by removing fuel subsidies. The UAE oil minister practically said "we'r rich people we should be able to afford to pay without subsidy". Venezuela is heavily subsidized though.

http://www.newsofbahrain.com/viewNews.php?ppId=12820&TYPE=Posts&pid=22&MNU=18&SUB=
http://www.arabianbusiness.com/uae-to-cut-remaining-energy-subsidies--619552.html
http://www.pressreader.com/uae/khaleej-times/20160123/281479275428924/TextView

I do not like blowing trumpets and yada, yada, but . . . anyways, go read thru my post again.

989900:




1. That crude prices are falling would not directly translate to refined products prices falling by 45% -- you should know better. Cost of extraction is not solely responsible for cost of end products, there are other costs i.e transportation, refining costs, storage, security, marketing and e.t.c. that didn't/won't go down proportionally. Also, prices need to be kept in range for other ripple economic effects (hope you understand what I mean). BTW, even countries like UAE, Qatar had to increase pump prices for reason I explained earlier.

2. Pump price in Venezuela is less than N4.00 ($0.02) if you are using their official exchange rate, at their black market rate, it is actually less than 0.5 cent (around 50 kobo a litre) -- let's just say it's free over there. And that's no biggie, they gift over 200,000 barrels of crude to Cuba Jamaica, Haiti and 2 other countries everyday!

Their break-even cost without subsidy to supply PMS in 2014 while crude was roughly $100/barrel was roughly $0.42/litre (about N60 in 2014 Naira). Then, even at $100/barrel their 'direct subsidy' payment was roughly $20b; not $50b ($50b is, when you factor all their losses from being st00pid). Of course their refineries are more or less like ours -- they import refined products too! #oilisacurse

At the moment, they pay less than $10b in direct subsidies, and their pump price is still dirt-cheap (without subsidy prolly around N35-N45/litre, with subsidy, let's just say free! ); far from the 0.2 pounds (N90/litre according to you and 'Fourwinds' calculation which actually should have been N56.2/litre . . . it's traded at the official rate, not BM RATE) you based your analogy on. Venezuela is not your typical example for anything oil.

3. If you use the likes of Saudi, Qatar and e.t.c, it's still very cheap; pump price at $0.20/litre (N47-N71/litre). And, note they just purposely increased their pump prices to augment for fall in revenues it was far cheaper before, it could have been less than N25/litre, but they all kinda removed subsidy.

Hope you get the drift . . . it is very possible for landing costs of PMS in Nigeria to be around N60/litre -- they are 'making a killing' already ('prolly' why NNPC does most of the importation now)!
The below is my earlier response (indicating Venezuela's heavy subsidy):

Caseless:
you are just too intellectually arid and lack that modicum knowledge of what you are trying to build a debate on. You are defining subsidy, I don't know how that explains its existence on products in question.


I'm wondering if the same market forces did not bring the prices down last year below the government regulated prices , and if we did not pay higher for subsidy despite this and why BUHARI do not deserve an accolade for saving money and responding to "market forces" , something the last administration didn't do.


It might incomode you to know that I'm not interested in your gangue analysis anymore. You appear wealed already cos your post is bereft of that modicum ingredients.