Dangote Refinery will sell its refined oil at international price to Nigeria when it commences operation next year. The refinery which is being constructed in Lagos, won't sell according to domestic price despite operating within Nigerian.

According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the location of the refinery was a determining factor in the choice of the refinery's market price. The refinery is situated at the Export Processing Zone, Lekki, in Lagos State, and it is expected to refine 650,000 barrels of crude oil per day.

Reason For Allowing Dangote Refinery To Sell At International Price

Ahmed disclosed that the only benefit of the refinery operating in Nigeria is that it eliminates shipping cost. She told NTA’s ‘Good Morning Nigeria’ programme on Monday, that this will.... https://allnews.ng/news/fg-defends-dangote-over-plan-to-sell-fuel-at-international-price

Of course they will defend him to exploit Nigerians to pay the highest cost of fuel, the way we now pay the most expensive cost for cement in the world!

Na dem dem!

This country self...Dangote trying to monopolize everything.

Dangote is the greatest exploiter of Nigeria and Nigerians.

Dangote d Capitalist

Pls is there any oil producing country that sells fuel at international price?

Lets start from there.

Do people expect any different?

The Dangote advantage is employment, revenue and reduced pressure on forex.
Lower than market prices was never on the table.

Simplyleo:
Pls is there any oil producing country that sells fuel at international price?

Lets start from there.

Rather the question should be, is there any private owned refinery that sells fuel at international price?

Do you want Dangote to be doing business like government does?

He built his refinery with $12 billion and you expect him to run it like a charity organization or a family support program!!!

The federal government benefits more.
1 The earn revenue from him
2 their will be less pressure on forex
3 he reduces the unemployment rate
4 it also affects our balance of payment.

For the masses

Even if he is selling at international price it would be cheaper than importation because there will be no shipping and other logistics costs.
In all, its still better than importation

Emusan:


Rather the question should be, is there any private owned refinery that sells fuel at international price?

Do you want Dangote to be doing business like government does?

Nigeria is an oil producing country.

The country can sell the crude to Dangote at a highly reduced price so he in turn sells to Nigerians at reduced price. Forex not involved in this case and nothing like subsidy in addition.

That should be our benefit for oil production. Shebi dem say landing cost, forex bla bla bla are the reason for high prices?

If Nigerians cannot benefit from the refinery by way of reduced pump price, what then is the rationale behind assisting him with forex at subsidised rate for the importation of materials for the refinery?

mariahAngel:
Dangote is the greatest exploiter of Nigeria and Nigerians.

Okay, he too will be exploited in hell

mariahAngel:
Dangote is the greatest exploiter of Nigeria and Nigerians.

That is why whenever you hear of a very rich African, have it at the back of your mind, they are cheats.

Most rich White became extremely rich from the output of their brains. But Africans become rich by exploiting and cheating fellow humans.

What's grade of fuel is he selling to Nigerians at intentional price ? I hope it's not the same lowest grade dirty petrol the Federal govt has been to selling to Nigerians for decades

jtjohn:
This country self...Dangote trying to monopolize everything.

They (politicians) gave him that power.
A very unscrupulous businessman who shamelessly ventures into every business, both small and very small.

Simplyleo:

Nigeria is an oil producing country.

The country can sell the crude to Dangote at a highly reduced price so he in turn sells to Nigerians at reduced price. Forex not involved in this case and nothing like subsidy in addition.

That should be our benefit for oil production. Shebi dem say landing cost, forex bla bla bla are the reason for high prices?

If Nigerians cannot benefit from the refinery by way of reduced pump price, what then is the rationale behind assisting him with forex at subsidised rate for the importation of materials for the refinery?

There could be competition from petrolex which is building another 250000 p/b refinery in Ogun state too.When the sector remains in the private sector, things will be stabilized in the long run

Xisnin:
Do people expect any different?

The Dangote advantage is employment, revenue and reduced pressure on forex.
Lower than market prices was never on the table.

Minor reduction in forex, the government will still buy from him at the international price in US dollars. The only cost savings is the shipping cost.

Cjrane2:
Of course they will defend him to exploit Nigerians to pay the highest cost of fuel, the way we now pay the most expensive cost for cement in the world!

Na dem dem!

A wailing Failure, how many houses have you built in Nigeria, or anywhere in the world before you know the comparison in the price of cement? Mumedey.

RuudVanNisteroy:


Minor reduction in forex, the government will still buy from him at the international price in US dollars. The only cost savings is the shipping cost.

Which should automatically bring down the price, since shipping cost has been eliminated? A win, win any which way?

favor914:
Which should automatically bring down the price, since shipping cost has been eliminated? A win, win any which way?

You heard from the Minister it will not lead to reduction in fuel price and Dangote has monopoly and will be in a rush to recoup the $13 billion dollars he invested in the project. Is there any industry a monopoly has brought about reduction in the current price?

Cjrane2:
Of course they will defend him to exploit Nigerians to pay the highest cost of fuel, the way we now pay the most expensive cost for cement in the world!

Na dem dem!

That's how he became a rich man: ridding on the back of a corrupt government bent on enslaving the people.

jtjohn:
This country self...Dangote trying to monopolize everything.

weather we like it or not dangote is a private individual and has the right to sell at what price he wants, so we shouldn't crucify him, we should channel our anger to the govt who over the years have failed woefully in doing the needful.

mariahAngel:


They (politicians) gave him that power.
A very unscrupulous businessman who shamelessly ventures into every business, both small and very small.

It will never be well with the Wailers, Nothing they hate more than the truth? They believe in illusions like Biafra will come to pas, Obaseki will win on Saturday.

favor914:
A wailing Failure, how many houses have you built in Nigeria, or anywhere in the world before you know the comparison in the price of cement? Mumedey.

Forget it.

It doesn't make any sense for Nigerians to be buying fuel at a pump price from Dangote competitive with international prices. What then is the benefit of Nigerians by reduced forex for him for the importation of the refinery equipment?

Besides, Nigeria is an oil producing country, meaning crude oil is nearby, he doesn't have to transport it from another country. Additionally, the refined products doesn't need transportation to Nigeria.

eagleu:


That's how he became a rich man: ridding on the back of a corrupt government bent on enslaving the people.

1 wud “Zombie”.

Did anyone really expect him to do so?

If he sells it lower than 'international price', he bears an opportunity cost and doesn't maximise profit like a business man normally would

If FG sells crude to him below 'international price' , then FG also bears an opportunity cost and is in effect subsidizing and does not maximize potential revenues.

A CASE FOR WHY FG SHOULD NOT MAXIMIZE ITS REVENUES AND NOT SUBSIDIZE:

The world is currently witnessing a peak in the demand for crude oil. Medium to long term forecasts sees demand for crude declining consistently from 2023 or so (depending on the model). In fact, due to COVID-19, one could argue that it has started already.

And where is this decline supposed to come from? Wind and Solar are the fastest growing electricity sources in the world today. This means that many developed countries are replacing gas and heavy oil fired turbines with Solar and Wind. Electricity utilizes about 8% of crude oil.

The real big deal is petrol. Many European and Asian countries are planning significant restrictions or outright bans of internal combustion engine (ICE) cars from 2030 - 2040.

https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles

Road transportation utilizes 50% of crude oil. Imagine what happens in 2035 when this happens. A good chunk of crude demand is going to evaporate. . The real shock to the system will happen when America announces it's own ban on new ICE cars. America is the driving capital of the world. From passenger cars to trucks and SUV's to heavy articulated trailers.

All this means that crude has a potential to become as cheap as $20 -$30 in the medium term. In fact, in many cases it will make no sense to continue production in the most expensive areas, hence you hear a lot of talk by NNPC of reducing operating cost. Unfortunately, we make operating cost high in Nigeria by our own actions (NDDC that collects 3%, Security, Corruption etc)

This means that Nigeria is looking down the barrel of reduced earnings from crude by 2030, so it makes NO SENSE to fritter away what we make now in the name of subsidies.

Nigeria needs ALL the money it can make now to diversify it's economy. The removal of subsidy in the electricity sector is also in line with this. If we do not make our electricity sector bankable before 2030- 2035 and almost all new cars are electric, where will we get the electricity to power it? And this will be happening at a time when FG revenues would have significantly reduced. It's a situation the FG has to GET OUT OF NOW!!

Even the mighty Saudi has seen this handwriting on the wall and a notoriously stubborn country that believed it had all the money in the world in finally taking steps to diversify its economy and improve productivity. What has Saudi done in the last few years?

1. Allowed its women to drive in order to enable them to be more productive and add to the economy.
2. Reduce it's subsidy on petrol
3. Introduced taxes for citizens, albeit small.
4. Introduced relaxed visa for outsiders for tourism purposes
5. Invested massively in solar power generation facilities

UAE is a country that has done this already. Yes they have oil, but they used their oil wealth over the last 20 years to invest in infrastructure and a well designed and planned country. Now asides oil, they have a vibrant global airline, global shipping sector, global financial services sector, global tourism sector, solar power sector and even educational sector (many universities have a Dubai center) and relaxed residency visa requirements (now with guaranteed income of $5k a month, you can get a retirement residency visa). So when oil reduces significantly in value, they will have a semblance of an economy to power it forward. Nigeria unfortunately has NONE of the above!

This is why Nigeria can no longer put it's head in the sand and basically flush money down the toilet in the name of subsidies. We are a relatively poor country. Oil brings about 60% of revenue and 90% of forex. Our tax base is really low. Even worse for Nigeria, a lot of our economic activity happens at the informal, subsistence level where it's very difficult to track and tax. Brazil a country with about 5 times our GDP has a budget that is like 36 times bigger, because they are able to generate better tax revenues from their more developed and more formalized economy.

chriskosherbal:
weather we like it or not dangote is a private individual and has the right to sell at what price he wants, so we shouldn't crucify him, we should channel our anger to the govt who over the years have failed woefully in doing the needful.

We shouldn't crucify him?

So all the forex subsidies he got from cbn is of no use to Nigerians?