angel101:

why don't u comment on their short term plans i.e expecting to and actually declaring billions of naira in profit in a matter of months

What's wrong with a business expecting and declaring profit in a short time?We had one of the fastest growing GSM markets in the world,at a point,they had more demand for lines than they could supply.We have grown from less than a million lines connected to 27 million within a few years.That is the main thing that matters.This wouldn't have been possible if the market was not deregulated.Perhaps,you still want to go back to the "goold old days".

Again i ask how many had nitel phones? even if they had complained what percentage of the population was it?

Very few had phones because the market was not deregulated.You have to remember why the market was not deregulated in the first place.The rationale was on the same basis that we are using to justify the retention of fuel subsidies.The claim was that if we leave the telecoms sector to the private sector,they will seek to exploit the people,"milk people dry",to use your own terms. Hence,the Govt should have to intervene to provide telecom services to the people at affordable prices.Thus was born,one of the most expensive and inefficient telecoms sector in the world.

You seem to forget,then(prior to the influx of the likes of MTN) phone lines,like fuel,were actually scarce.It was hard to get a line in many parts of Nigeria.Today, this has changed.Why people don't want a similar reform process in the petroleum sector,beats my imagination.

Enjoying all the post.   I don't we should direct our anger to denex, all he's trying to do is to open our eyes to the unknown info that aren't open to the populace as it should be.  

I commend you on yr brave write up, it takes more than an individual to go to that lent.  I believed u're not connected to the information ministry one way or the other,     and no intention of collecting advanced payment from Yar'adua? if not, then it's good.

No one is supporting what the govt did in raising the past but a compromise is what is need now and find a way to deregulate the energy sector - oil and power.

Would it be normal to inform the house that averagely, a working class american spend btwn 40 to 70% of their basic salary on housing?  As at today, i was jubilating to see the prices of gas at $2.79 from the initial 3.13 all due to market forces and thx to the militants in delta state for freeing the 10 indians.  

Either way, there are pains and informed public will be able to manage the pains just as denex noted in his post.   All we need is enough information that will be able to carry us along govt or corporate decisions.

McKren:

,   You can not expect any person to invest his money on a long term plan when the future of his bussiness is not guaranteed, in fact foreign investors believe the political future of the country is not even guaranteed.

Well said, pal

McKren:
So people can only invest their money if they are sure of short term profit.
Bussiness is not a Charity organisation.

Just the same way we invest in stocks and want the price to quadruple withing 30 days.[color=#990000][/color]

We are talking on a wrong information here. I cant remember NCC increasing Nitel's tarrif for the GSM coys to compete. Plz someone help with a post. To the best of my knowledge the NCC has never intervened on call tarrif, only on call quality and stuff.

That's what is needed in the oil industry. If govt didnt fix prices the pump price wouldve varied anyway. The best solution is to fast track the licensing and construction of refineries, PERIOD

McKren:

But honestly what is the very essence of 65, 70 or 75 Naira if the filling stations don't stick to them.
The same people launching strikes and campaign are likely to pay 150 Naira for the same product, are we just not looking for unsustainable short term solutions to our problems

In my honest opinion if Government can build refineries all arround Nigeria and ensure that we are able to refine all the oil we use, I will not mind N100 for s start knowing that with time owing to competition the price will reduce.

Exactly. People are now forced to buy the same fuel at over three times the N70 price from the black market. What happens when fuel finally runs at the the fuel stations? How will people power their generators? How long can the people survive this strike? Can the people even survive this strike?

denex argument is a little faulty, when making comparison please include other opec countries. the idea of freemarket is nice, but we lack an efficient mass railway/transit system which would have cushioned all the effects.

sartorius:

denex argument is a little faulty, when making comparison please include other opec countries. the idea of freemarket is nice, but we lack an efficient mass railway/transit system which would have cushioned all the effects.

We are definitely not going to get an efficient transport infrastructure by pouring money down the drain in the name of subsidy.

the truth of the matter is that the economy cant sustain a a completely deregulated price,  we still need a little subsidy, plus its more like the only benefit we get from an inefficient, corrupt ruling elite,
   i read the governors want to share excess crude almost 2 billion $ to cushion effect of debt profile ( sic = stolen loot), its this not money down te drain

hello everyone this is my first time here

nigeria is the only country i know that the price of fuel keeps going up. i thought the wholw idea was that it fluctuates. if in 8 years the price of fuel has increased from N11 to what it is now, then i wonder what kind of future lies for us

Exactly.

When fuel price goes up in 9ja it doesnt come down.Which kain wahala be dis sef?


Why do we have selfish leaders?God go help us oh

@initiator

it is strange that you would say the information is wrong and at the same time say you do not know what happened. If you can't remember what happened, how can you say the information is wrong?


The first link shows the increase of NITEL call costs just 3 months before the GSM companies started operating. Honestly the first link took me hours to find. You know how information erodes away in Nigeria. And the fact that you're saying you didn't know when this happened, it goes to show how true it is that the only reason why NLC didn't go on a strike that would have crushed the future of the GSM companies, is simply that they were oblivious to the price changes.

The second link shows a more recent price like, but still no NLC strike against telephony price changes.

From as low as N1.90 in 2001, to as high as N16. More than 700% increase yet we're enjoying the benefits.


www.mediarightsagenda.org/mrm/jun01/jun01_front2.htm


www.dailytimes-nigeria.com/index.php?option=com_content&task=blogcategory&id=9&ltemid=12

Watching one of the Labour leaders talk yesterday on AIT was very instructive. We Nigerians have got to insist on our rights some time or the other one day. The question that is left to be answered is how much does it take to refine 1 litre of petrol because the current pricing scheme being paraded is based on a landing cost that has been over inflated. There is a conspiracy by some wicked Nigerians to prevent the establishment of local refineries because they know that the real price per litre of petrol should be N31. NNPC as of today imports over 80% of the petrol used in Nigeria which by the way imports 100% of the commodity. If we must deregulate then I suggest NNPC be also sold but this time not to Dangote but Mike Adenuga but again who really benefits from NNPC? The same old politicians from the North & West. This people are doing business with government money and telling us to pay with our blood.

Nice point


How long do u think d strike wld last?

Ama Girl:

nigeria is the only country i know that the price of fuel keeps going up. i thought the wholw idea was that it fluctuates. if in 8 years the price of fuel has increased from N11 to what it is now, then i wonder what kind of future lies for us

Hello, don't be offended please. Does your name mean Town girl or Village girl??

@Iman
'bleeding us dry' the term that u so frown at is the reason y they declare such huge profits in such short time frame a feat that has not been achieved even in their home country (in the case of MTN)

No doubt even I would not want to invest in an unstable economy but is that the fault of the nigerian populace?

But denex your link noted price increase by telecom coys and not fixing of prices by NCC. Am still looking for which sector in nigeria where the regulator fixes prices.

Recently the NERC the new regulatory organ for electricity in nigeria licenced 20 coys to generate and transmit electricity. They fixed no price - they only outlined tarrif guidelines.

Also denex calculations were for crude (which is what we sell). Is there any fixed price for refined fuel (which is what we import). Am still waiting. Storage cost for imported fuel in nig is variable. Ask any marketer you know: Folawiyo jetty at Apapa is N3, Ibru jetty at apapa is N1.50, i dont know for Capital oil. So the costs borne by the marketers vary up untill they get to the filling station where it's fixed.

All am saying is the market is more dynamic than we think.

Until refineries come up, we'd continue to be left in the dark as to the dynamics of the market. Why d'u think Otedola (a marketer) would be interested in buying a refinery? Cos he knows thats the bloody solution. Thats the true free market solution.

If there is anything NLC should push for, it is why Nigeria can not build its own refineries.

To me N50 or N100 per litre simply dont make sense because filling stations wont stick to them.

Why cant we refine our own fuel so that filling stations will be allowed to fix there own price relative to their profit margin.

@denex
Please don't confuse us. NLC said that the cost of production of a barrel of crude in Nigeria, as confirmed by PENGASSAN is $7 (not the cost of petrol). It means if we sell crude at $70 per barrel, we make net profit of $63/barrel shared between NNPC and the JV partners, Shell, agip, exxon etc using their wayo wayo formula.  Remember, we produce an average of 2.5 million barrels/day! Just put down d mathematics and lets see, since u are good with numbers.

It is completely wrong-headed to draw analogies from only one side of d arguement. If we must pay international and competitive prices for goods, then our economy must be internationally competitive too. My grandmother in the village needs kerosine to survive.  She has no electricity, and you imagine that she just cannot afford the equivalent of a tiny tomato-tin measure of kerosine which now sells for N50 in the village!  The people are suffering my brother.  If we envy the american economy, we must sit down and plan to be like them.  How much does an average Nigerian earn as wage?  Now that you argue that we must buy fuel at at least N108, how much does that translate into, for a person who needs to fill a car with 60 litre tank capacity?  And how much is his income?

And, who on earth said the NCC does not regulate the tariff we pay for GSM?  At the inauguration of the technology in nigeria, Ernest Ndukwe fixed call rate at N50/min flat for local calls.  All networks (Econet, MTN and later Glo) charged that rate/min, until they reaped their millions and started competing.  So, everyone who says NCC doesn't regulate prices is wrong on this score!

Back to the strike, I'd profer my own solutions.  First, d multinational gold-diggers must be compelled by deliberate government policy to build and refine all the crude produced in nigeria within.  It's nonsensical to sell crude oil! The word crude means, raw! And it is a fool that sells his resources raw.  When crude is refined, value is added.  Just imagine what kind of superppower we would be in the world, if we had capacity to refine 2.5 million barrels a day!  Imagine the employment and wealth this would generate.  It means, we could now be ruling the world and playing games with america just like venezuela is doing.  When hurricane katrina hit New Orleans, it destroyed more than 100 refineries in that state alone! It means, there are several hundreds of refineries in the USA!

I have it in good authority that Exxonmobil ships all its crude produced everywhere in d world to the USA where it has capacity to refine all, and resell to the world!  In 2005 it paid tax  to the USA that was more than the total revenue Exxon made in the USA!  For as long as the oil industry is seen as a cash-cow by all stakeholders, we shall continue to move round this cycle.  For me, I feel that insofar as the govt isnt doing what it should do to give nigerians leadership and protection it no reason not to continue subsidizing the price of fuel. Let the strike be! QED.

truth Celemel

Why are we even exporting crude, why cant the Nigerian government compel the multinational companies to refine its oil in Nigeria.

If they do there will be more jobs.

@ celemel i was buying your gist untill you mentioned NCC fixed prices 4 GSM coys. I got on google to find that out and found no clue of NCC's directive to fix prices @ N50. I placed a cal to someone that should know and he was like hun?

Well the main crux of this thread is that impoverished nigs shouldnt bear importation cost.

@celemel

you have spoken very well and I'm extremely pleased with your line of argument. I'm not trying to confuse anyone here. It was one OTOKX individual just before my post that he was watching on AIT where one NLC comrade said the final cost of 1 litre of petrol is N31. How am I supposed to know he was a liar?
Besides I have also read where one NLC member was giving similar analysis on the Tribune.

Now what I'd like to ask is that, are you saying it should forfeit its own share of the $63 profit? And then lets assume the government's share is $20/barrel and it surrenders it, what stops these other JV members from still going into the world market to sell at the international market price, thereby making extra $20 on top of their initial profits.

If Dangote Refineries takes in 100,000 barrels per day of crude, why wouldn't they just divert 50,000 and sell into the international crude market, making the $20 per barrel that should rightfully belong to government. That will amount to $1million a day without lifting a finger. That is exactly what is called round tripping in the banking industry today.

Government will lose $1million dollars daily to 1 individual and also there will be scarcity since out of the total amount of crude estimated for the daily use of the country, half is being diverted.

Then regarding the banning of crude export from Nigeria, that is something we have to do in order to have a useful future as a nation. At most 2010 should be a time when there will be ZERO crude oil export from Nigeria.

Refining crude oil will create more than 3 million jobs. I kid ye not. The cost of transport in first exporting crude and then importing refined products will be chopped off the end cost of petrol. Import tax, export tax, those will no more play a part in petroleum products consumed in Nigeria. With cheap labour, At the end of the day, prices will still come down to N60 / litre. Just the way SIM cards sold for about N30,000 in the begining of the GSM craze, but now it's about N300. This refining policy double the profits Nigeria makes.

But first, how do you get these refineries to open shop? You have to let them realise at least they won't make less profit, or at least a loss by coming down to Nigeria.


About the NCC thing, it is one INITIATOR guy on earth that started initiating that there was no such thing as fixing of tariffs by NCC. In fact, he's still claiming it didn't happen.

@initiator

I told you how difficult it was for me to get these links but I don't think you even bother to check them out.

www.mediarightsagenda.org/mrm/jun01/jun01_front2.htm


www.dailytimes-nigeria.com/index.php?option=com_content&task=blogcategory&id=9&ltemid=12

celemel:

For me, I feel that insofar as the govt isnt doing what it should do to give nigerians leadership and protection it no reason not to continue subsidizing the price of fuel. Let the strike be! QED.

Spot on!!

Am really surprise and disappointed that alot of Nigerians don't get the jeck! Do you guys ever wondered why the so called "FEDERAL GOVERNMENT" are so reluctant in repairing the refineries? Has any body ever wondered that some thing that would be beneficial to the economy and the country as a whole should be left unattended to?

Please reply if you all want answers.

Back to the strike, I'd profer my own solutions.  First, d multinational gold-diggers must be compelled by deliberate government policy to build and refine all the crude produced in nigeria within.  It's nonsensical to sell crude oil! The word crude means, raw! And it is a fool that sells his resources raw.  When crude is refined, value is added.  Just imagine what kind of superppower we would be in the world, if we had capacity to refine 2.5 million barrels a day!  Imagine the employment and wealth this would generate.  It means, we could now be ruling the world and playing games with america just like venezuela is doing.  When hurricane katrina hit New Orleans, it destroyed more than 100 refineries in that state alone! It means, there are several hundreds of refineries in the USA!

How are you going to increase dramatically,Nigeria's refinery capacity,when you insist that fuel should be sold below its true cost? You can't force multi-national companies to build refineries.Nigerians love force!You have to induce them to build refineries.It costs between $600 million to $1 billion to build a 100,000 b/d refinery.To build refineries handling 2.5 million b/d could cost up to $25 billion.To get them to spend that money,you will have to stop fixing prices at low levels.

Every country I know of that produces oil in excess of domestic demand still exports oil.They must all be fools then.

I honestly think it is about time this strike stops. NLC has bitten much than it can chew. Nigerians are bearing the brunt here. Just spoke to my mom and she's telling me how expensive petrol sells for. What is the point? 70naira, 65Naira,75 Naira. Concessions have to be made. The Federal Govt did hers, NLC has to do same. There is no point on going back to 65naira when improvements can be made with fuel at 70naira. Denex gave a logical assessment of crude prices, refining cost, transportation, supply among other cost incured before it gets to the final consumer which totals to more than 100naira or so. I think Nigerians ought to chew the bitter straw sometimes, if we want to reach better heights someday, we have to go thorugh a rigorous process. The GSM analogy was given, SIM cards started at almost 60000naira, now they are at 300naira. I think the petroleum sector, the power sector, water and all basic needs which continue to erode us must be deregulated. Even the US governement doesnt take full responsibilities for all this. Profits have to be made by whoever runs them, but it must not be made excessive over poor people.
Bitter pills ought to be chewed. Those are just my two cents!

@initiator

www.cellular.co.za/news_2003/082003-nigerian_regulator_ncc_to_set_up.htm
So don't call that your friend If you ever find yourself on the hot seat of who wants to be a millionaire.

@am aikama

the simple answer is that Nigerians won't pay the right price for the products.

Danmasani:

I honestly think it is about time this strike stops. NLC has bitten much than it can chew. Nigerians are bearing the brunt here.

My point exactly! The winners here are those selling fuel on the black market. Who knows how they got that fuel anyways.

Each day spent on strike,a day's worth of economic output is lost(50 billion Naira by one estimate).The sad thing is that all this loss is for an entirely flawed cause

You just struck on the basic thrust of the labour strike. Why should Nigeria refuse to repair 4 refineries and build at least 5 additional since 1999 if all other OPEC countries from Saudi Arabia to Bahrain, Russia to Venezuela all refine their crude and even export to other countries? Is it because Nigerians have been so docile and stupid to accept the baloney that only the so - called private sector could do anything while the Otedolas make their trillions taking money from our banks to import refined petroleum products which they sell at ridiculous margins? Like IPMAN is saying what stops Otedola and Dangote from simply closing down the refineries they have "bought" the same way Dangote closed down the National Salt Company, Ijoko Ota he bought from Babangida in the 1980s while he made his cool billions from imported "Dangote " salt?

The issue is if Obasanjo could build two refineries between 1976 and 1978 (i.e. Port harcourt 2 and Kaduna), what nothing stops him from repairing 4 refineries and building at least 5 more between 1999 and 2007? Would that not have ensured less dependence on imported fuel, provide enormous amount of jobs as well as support local industrial productivity? I am baffled that even the NLC is not raising issue about local production but harping on reverting 70 naira to 65 naira. Isn't this puerile? Why should govt not increase prices if prices of PMS for instance is at least 230 naira in the international market from which the Otedolas import from and we all have to pay them the balance that should be used for other things?

The issue is we must produce locally! and we can no longer wait for any private investor to come and build refineries for us when they couldn't do it in 8 years. What stopped Otedola and Dangote from building refineries all these years from the super profits garnered from cheap fuel imports? Why do they have to buy existing ones? Enough of all this IMF and World bank bullshit. We have been held hostage long enough by their nonsensical arguments and our govt slavish acquiscence to them.