GavelSlam:


They have no need to sell him oil other than for the price for which it is sold internationally.

He on the other hand, sells to Nigeria at standard international price . The difference is that it doesn't need freight charges, landing cost and sundry top up charges.

ednut1:
cost of production in nigeria is higher so it will negate all the freight charges and all. Nnpc currently does under recovery with yankee refineries. They will simply do same with dangote. Give him cheap oil after all fg/nnpc own half of oilf produced in nigeria

kayroc:


The way I understood it is that if Petrol costs 200/l to import, FG pays 50 out of it and then the sellers sell for 150.
However, if the price goes up to 250/l to import FG might drag their feet over paying 100/l subsidy leading to fuel scarcity. If FG does not pay immediately, and keeps paying that 50/l, then the supply available at official price goes down leading to shortages.

The foreign companies sell to us at market rate but the FG defrays part of the costs to reduce prices to the end consumer.

Or is my understanding wrong?

deenee:



Petrolex is a tank farm oga. No refinery is been built there at the moment even though there are discussions for such in the pipeline. You too stop spreading fake news

Originalsly:


Your understanding is correct. So if the petrol is supplied by Dangote... the FG will be unwilling to pay him the market price of 200/L?... and continue subsidizing 50 for the public? Explain why it would be unprofitable for Dangote to sell with the subsidy still standing.

tciro:
Why is it that this man as no competitor, should it always be monopolistic hmm

GavelSlam:


Will you shut up?

https://www.bloomberg.com/news/articles/2017-12-06/nigeria-s-refining-push-prompts-3-6-billion-plan-from-petrolex


It is left for Petrolex to deliver.

GavelSlam:


Cost of production of what is higher?

Crude oil?

Why do far flung nations such as India, China and even the US buy our oil?

Finished refined products?

How?

The oil is piped to the refineries, the Labour costs are far less than anywhere else, tax holidays and tariffs have been granted.

So tell us what is actually more expensive.

kayroc:


Ok the way I saw it is that FG has an amount they peg as what they will spend for subsidy. If the cost of the petrol goes higher, then they might not want to increase what they planned to spend on subsidy, causing them to reduce the amount of petrol they buy from him.

The way I calculated it, if there is that kind of political aspect to him being able to offload his product, that means that NASS who set budget can get in his way. This makes selling his product more complicated, meaning that it would make more sense for him to just sell to foreign interest who don't need NASS to approve what they will use to buy his product.

Does it make sense?

GavelSlam:


Are you aware the earth was hit by an asteroid millions of years ago, leading to death of dinosaurs, spread of rare metals such as gold, platinum etc?


Burning fossil fuels definitely affects the ozone layer which in turn spawns climate change.

deenee:



Bro stop making a fool of yourself. You go and pull a bloomberg report from Dec 2017 just to make a bigger mockery of your self.

Petrolex has plans in the pipeline...which I mentioned in my post and even that is still on the drawing table because approvals to expand the tank farm which is not yet fully operational to include a refinery was stalled by the state government and will most likely be stalled as dapo abiodun a rival in the energy sector with same plans is now the state gov elect.


Dangote's refinery is almost near completion, the fertiliser and gas pipeline are complete and all things been equal will become operational by FY 2019.

Also Dangote has location advantage as he has sited his refinery by the sea coast hence making dispatch and discharge of products easy. He has also built his own private port hence cutting of the bureaucracies of apapa port and the likes

Petroloex is planning to build along the inland waterways of ogun state so for him to even dispatch or discharge he will need to build pipelines which will make his business operations open to pipeline vandals or other wise he will move products in barges which will double his production cost thereby making him uncompetitive.

You people just sit down and type rubbish mis informing people.

ednut1:
so if there any proof the so called damage will reverse if we stop emmissions.

ednut1:
ever wondered why its cheaper to import chicken in 9ja Where other countries can access loans of 3% it has to be 22% here. Dangote refinery loans some were are 10% . By the time he capitalised those costs u go know how far

Originalsly:


Not really. Whatever the FG can afford to buy... he would sell. His sale is not restricted to the FG... he is trying to supply the entire continent.

kayroc:
I am sure Dangote will simply export all the refined product from that refinery. For as long as there is subsidy he will not he able to sell for the maximum price in Nigeria so he will simply export the product and maximize returns.

GavelSlam:


Provide evidence he got his loans at 10%

brainpulse:
Good one. Another great development in the southwest. We don't develop by noise, we do by actions

lastempero:


Once the refinery comes on stream they will stop subsidy for the oga patapata to take in more rubbers,u know know there way again. As in cement, sugar and other dangote signatures.

GavelSlam:


Stop writing rubbish.

Whose fault is it that they cannot build a refinery even after being granted a licence?

If Petrolex is not built, that is their problem.

A licence has been issued.

How is it a monopoly if licenses have been issued?

The kind of human beings that come on Nairaland suggests why the country is the way it is.

freedomjabs:
Dangote will squeeze Nigeria hard with his fanatical refinery, the way is doing with his CEMENT and other products! I'm not surprised and don't expect his refinery would make us better either. Nigeria is the only country Dangote cement is damn expensive compare to huge resources available to him compare to other country, where he got fewer resources and still sell cheap. Dangote is a sucker.

kayroc:
I am sure Dangote will simply export all the refined product from that refinery. For as long as there is subsidy he will not he able to sell for the maximum price in Nigeria so he will simply export the product and maximize returns.

ednut1:
industry standards for oil and gas.

Pulled from your ass.

GavelSlam:


Pulled from your ass.

ednut1:
i work in the industry duh. And have seen many of such loan agreements

Lol.

Do you think Dangote got his loans from local banks?

GavelSlam:


Stop writing rubbish.

Whose fault is it that they cannot build a refinery even after being granted a licence?

If Petrolex is not built, that is their problem.

A licence has been issued.

How is it a monopoly if licenses have been issued?

The kind of human beings that come on Nairaland suggests why the country is the way it is.

GavelSlam:


Lol.

Do you think Dangote got his loans from local banks?

deenee:


Bro i don't need to join issues with you and i regret even responding to you post. You started out by saying petrloex is building a refinery and I tried to correct the wrong news now you have turned the table.

Having a license to build and building are two different things and to tell you for free the ministry of petroleum resources issue out refinery licenses daily. And I choose to align with the person that is building because at least he is making an effort.

Finally, I have gone through your posts on nairaland and see that you are the pervasive and dodgy type that will nevet admit that they are wrong so this will be my last post to you on this.

brainpulse:
Good one. Another great development in the southwest. We don't develop by noise, we do by actions