good day nairalanders
as a concerned Nigerian and apolitical in nature, I'm worried at the rate at which truth is going extinct and sentiment taking over the day.
I supported subsidy in 2012 and still supports it today. my great concern is "Why is the FG lying and why is gullibility increasing exponentially".
the removal of subsidies (PMS in study) to my best of knowledge means full fledged deregulation of the downstream sector. this means that government no longer pay marketers to fix the price of PMS but rather price will be determined by basic principle of economics that is SUPPLY AND DEMAND. any marketer can sell at any price that suits him. excess supply can force equilibrium price to shift downwards.
the reality on ground is contrary to the basic theory.
my question is "WHY"
I was privieged to chat with an oil marketer early this week and he narrated how he made a profit of N2,178,000 in just one deal.
He loaded his product early last week from Lagos port @N74 and hoarded it base on market speculation that government may hike price . low and behold it happened this week. He sold his product to a gas station @N140.
profit (not net profit) = 33000litres * (140-74) =N2,178,000
in just one deal.
my point is this, if subsidy has being removed, no need to peg price.
coming to the issue of palliatives, paying N5000 to 1million poor Nigerians is a dumb idea. I mean PMB should shoot whoever brought this idea in this 21th century.
the following welfare packages are better palliatives;
free/subsidized medicare
scholarships to great brains
subsidies on agro allied industries etc
my opinion though

Hey, government did not fix any price on petrol, what the government is saying is that nobody should sell the product above 145 naira, because the landing cost of petrol in Nigeria is 110 naira so if calculate the offloading cost, transportation and all that, the cost will be around 135 or so. So no matter what petrol should not be sold above 145. Take note

This is the funny thing most people don't get. Like the guy commenting above me.

Subsidy is: I give you some money to help me buy and sell something..wch means I get a say in the price,distribution and marketing of such products,right? When I stop giving you the money to do the trade, do I still have such rights?

Subsidy removal means you don't get to tell them how much they get to sell their products.
Back under GEJ, most filling stations in the west sold fuel at #400 just to spark the protest. While others sold @ 100.

Govt has not said it removed subsidy! Don't misquote the government! It has only wickedly jacked the prices up!

raker300:
This is the funny thing most people don't get. Like the guy commenting above me.

Subsidy is: I give you some money to help me buy and sell something..wch means I get a say in the price,distribution and marketing of such products,right? When I stop giving you the money to do the trade, do I still have such rights?

Subsidy removal means you don't get to tell them how much they get to sell their products.
Back under GEJ, most filling stations in the west sold fuel at #400 just to spark the protest. While others sold @ 100.

Take the telecommunication, for example. It's deregulated, but NCC has fixed SMS within Nigeria at not more than 4 naira. Service providers (MTN, Etisalat, Glo, Zain, etc) may charge below 4 naira (like MTN to MTN SMS), but not above.

raker300:
This is the funny thing most people don't get. Like the guy commenting above me.

Subsidy is: I give you some money to help me buy and sell something..wch means I get a say in the price,distribution and marketing of such products,right? When I stop giving you the money to do the trade, do I still have such rights?

Subsidy removal means you don't get to tell them how much they get to sell their products.
Back under GEJ, most filling stations in the west sold fuel at #400 just to spark the protest. While others sold @ 100.

so do you think i don't know what subsidy is? Read my comment again, even without subsidy government has a say in the pricing because you cannot give out petrol to filling stations at 135 and they will be selling it at 200. You if you are the president or whatever you won't say anything because fuel subsidy is removed?

Following...

Benikuuse:
Hey, government did not fix any price on petrol, what the government is saying is that nobody should sell the product above 145 naira, because the landing cost of petrol in Nigeria is 110 naira so if calculate the offloading cost, transportation and all that, the cost will be around 135 or so. So no matter what petrol should not be sold above 145. Take note

so what is the meaning of deregulation?

Benikuuse:
Hey, government did not fix any price on petrol, what the government is saying is that nobody should sell the product above 145 naira, because the landing cost of petrol in Nigeria is 110 naira so if calculate the offloading cost, transportation and all that, the cost will be around 135 or so. So no matter what petrol should not be sold above 145. Take note

Which is like a price control.

but what happens when the price of crude goes up? as it seems to be going now, are they going to come up with another maximum price? so we will be seeing maximum price every now and then.


What is the maximum price for diesel that was deregulated before now?

What of the part where importer/marketers will be paid based on 298/Dollar

The thing is just confusing.

Iykopeeee:
so what is the meaning of deregulation?

deregulation means remove regulations and control from something, which government has just done. But the masses are under the control of the government and they are selling this petrol to the mass so the government have every right to caution them if they are using the subsidy removal advantage to make the masses suffer by selling the product far above their operational cost.

It is a simple economic principle, u don't fix a price ceiling if you really want the forces of demand and supply. Not to sell above 145 also translates that all marketers can peg price within the same price range and there's nothing neither we nor the govt can do.

Nichobabe:


Which is like a price control.

but what happens when the price of crude goes up? as it seems to be going now, are they going to come up with another maximum price? so we will be seeing maximum price every now and then.


What is the maximum price for diesel that was deregulated before now?

What of the part where importer/marketers will be paid based on 298/Dollar

The thing is just confusing.

the fact here is that, the government promise us that they will use the money for subsidy and activate our refineries so that in the next two to three months this petrol price will disappear.

Benikuuse:
the fact here is that, the government promise us that they will use the money for subsidy and activate our refineries so that in the next two to three months this petrol price will disappear.

Thanks Bro, but you didn't answer my concerns. crude price go up and down, is that how our fuel price will be going too? We all know that our refineries will not work 100% again even if, they can't meet all our needs.

Benikuuse:
Hey, government did not fix any price on petrol, what the government is saying is that nobody should sell the product above 145 naira, because the landing cost of petrol in Nigeria is 110 naira so if calculate the offloading cost, transportation and all that, the cost will be around 135 or so. So no matter what petrol should not be sold above 145. Take note

Ur opinion or what the government actually said?

Benikuuse:
deregulation means remove regulations and control from something, which government has just done. But the masses are under the control of the government and they are selling this petrol to the mass so the government have every right to caution them if they are using the subsidy removal advantage to make the masses suffer by selling the product far above their operational cost.

Can u deregulate and still exercise control? Does that mean deregulation in strict sense of the word?

Op, its part of the deceit in Nigeria.
They hike the price of fuel in Nigeria and call it " deregulation" or "removal of subsidy" even when fuel price all over the world had come down. Then in a few years time, they hike the price again and call it the same thing.

If you are "deregulating or removing subsidy" it is not a recurring decimal as we have in Nigeria's strange situation. It's all a ploy to impoverish the people more by forcing them to pay more for fuel, so that FG can tax fuel more and feed fat over the people's misery.

cjrane:
Op, its part of the deceit in Nigeria.
They hike the price of fuel in Nigeria and call it " deregulation" or "removal of subsidy" even when fuel price all over the world had come down. Then in a few years time, they hike the price again and call it the same thing.

If you are "deregulating or removing subsidy" it is not a recurring decimal as we have in Nigeria's strange situation. It's all a ploy to impoverish the people more by forcing them to pay more for fuel, so that FG can tax fuel more and feed fat over the people's misery.

it high time the populace pressure the government, criticise when necessary than being gullible. the government keep playing with our heads (not mine though)