mrvitalis:
This is what I was saying for long people abused me

Not only that most can't even produce petrol

For what we sale fuel in Nigeria no refinery would break even in 100 years even

Fuel should sale for nothing less than 400 a litre
Not only should subsidy be removed ...#50 to #80 road tax should be imposed for fuel and #100 tax on diesel for road maintenance

Poor people don't benefit from subsidy it's the rich n middle class that do

That was what nitel said until mtn, econet came on board.
Mtn said it was impossible to do per second billing, until Glo came and they all started per second billing.
Oga, raise price of fuel to 1k per liter and you will get the same excuse why they cannot produce at that price and tell you it must be 2k!
How about assigning 1 marginal oil well to each modular refinary. Extract and refine and sell to the local market? After all the oil is our natural resources. Give it to the refinary for nothing!
Anyway, if there is a will there is always a way.

what a daft thing to say. if you can subsidize foreign petrol why cant they subsidize the petrol from local producers? is the fuel they are importing landing at below the approved price?

backbencher:


Government used to subsidize locally refined fuel back in the day.

It's why we don't have 4 working NNPC refineries, because subsidies impact on the profit making ability of such refineries and thus their ability to operate and function well..

No, the refineries are obviously not functional because of government's culture of impunity. This is explained in the continuous subsidy of imported fuel despite the 'high cost' (arguable) of fuel.

Or are you telling me the subsidized funds are not enough to keep the refineries working even when those cost run in billions of dollars?

backbencher:


No they should not.

But subsides on local refinery production has problem .....the cost of production is never static, but keeps on rising.

So, even if you can afford to subsidize petrol to sell at N162 here, the rising cost means you have to pay more to subsidise it to sell at that price, or remove it partially or completely

The point of the article is that modular refineries cannot operate well under a subsidy regimen. They need to be allowed to sell fuel at a profit, home and abroad.

Is the cost of production in other countries static?
If the rising cost is only present in Nigeria, then you can't blame subsidy.

If we remove subsidy and imported petrol has lower cost of production than locally refined petrol, then buyers would prefer to import than to buy locally.

backbencher:
What the NNPC boss is saying is simple.

Modular refineries can only work when government allows petrol to be sold at market price, otherwise they won't make enough of a profit to function well otherwise.

It can't not work because they dont wantt it to work.

To account for the regulated price, the crude oil can be sold to them at lesser price to balance the subsidy on the imported one.

backbencher:


If you subsidies petrol from modular refineries, they would run at a loss.

Like now, assume it costs N362 to refine one liter of fuel in the modular refinery. Government comes in and tells that refinery to sell to the market at N152 per liter., pays a subsidy of N210 per liter to cover the loss.

Next year, costs go up to N462 at the refinery. Meanhwile, government revenue is not adequate enough because of our large populaiton. Would you support a rise in subsidy payments to keep the sale price at N152?

Or would you let the modular refinery make a profit by selling the fuel at N412 per liter to the market, and recoup its costs, and pay for expansion and upgrades?

Why would local modular refineries run at a loss when the foreign refineries are making huge profits from the same subsidy that the local refineries will be getting if they are subsidised?

Why would cost of production increase when they can use the subsidy to scale up their production by building more refineries?

backbencher:
What the NNPC boss is saying is simple.

Modular refineries can only work when government allows petrol to be sold at market price, otherwise they won't make enough of a profit to function well otherwise.

why cant the FG pay the subsidy to the modular refineries so they can function. at least we know where our petrol is coming from and the volume can be checked.
Answer, fraud wil be reduced so they dnt like this.

erico2k2:

why cant the FG pay the subsidy to the modular refineries so they can function. at least we know where our petrol is coming from and the volume can be checked.
Answer, fraud wil be reduced so they dnt like this.

The point of the report is that subsidises , which is part of the 'regulated price' system, won't let the refineries operate at a profit.

Why is NNPC trying to block the Creativity of Nigerians ?

Alexgeneration:
Why would local modular refineries run at a loss when the foreign refineries are making huge profits from the same subsidy that the local refineries will be getting if they are subsidised?

Why would cost of production increase when they can use the subsidy to scale up their production by building more refineries?

All in all, modular refineries must be allowed to operate at a profit, and paying them a subsidy after setting their price too low by government won't allow that to happen.

Better read up about subsidies.

lalasticlala:


https://punchng.com/modular-refineries-cant-refine-fuel-due-to-price-regulation-nnpc/

This people think they are talking to idiots ,
If you can pay subsidy for fuel imported from foreign countries, then it the home refined products you can't pay subsidy for?

nedekid:

That was what nitel said until mtn, econet came on board.
Mtn said it was impossible to do per second billing, until Glo came and they all started per second billing.
Oga, raise price of fuel to 1k per liter and you will get the same excuse why they cannot produce at that price and tell you it must be 2k!
How about assigning 1 marginal oil well to each modular refinary. Extract and refine and sell to the local market? After all the oil is our natural resources. Give it to the refinary for nothing!
Anyway, if there is a will there is always a way.

Stop saying what u don't know what's the price in Togo , Ghana , Benin Republic, Cameroon ?

Stupid! Enact a law to sell to Modular Refineries in naira and not dollars. Then they can sell below 165 or even #70 after refining. Must you sell to your nation at international price?

BennyDGreat:


The government has failed big time. If they remove subsidy, the protest that would follow would be too crazy.

What they should have done was to ensure our non-oil export earning increase over the years.
That would have helped the economy and the Naira.

Now, with massive inflation, if they ever try to remove the subsidy as it stands, there will be big problems for the government. They are in a box already!

Sure but they should have removed it in 2015

Golan007:


And the solution is complete deregulation which the masses don't want, not realising they are punishing themselves.

It’s so bad that nothing works in this country

Nigeria had been missing its oil production quota lately. Early last month, OPEC increased Nigeria’s crude oil production target for the month of March despite the fact that the country had been missing its approved monthly output targets..Even nijar produce there oil themselves and import some to Nigeria through kastina, daura

backbencher:


Illicit methods, and even then, they don't sell fuel from those refineries at N162 per liter...they sell way above the price.

And yes, if government recognises them, they would have to upgrade the refineries, which costs more money, and which adds to their production cost,and sale price.

They sell their fuel very very cheap.

Government recognition will increase productivity and not sale price.

timefarm:

It can't not work because they dont wantt it to work.

To account for the regulated price, the crude oil can be sold to them at lesser price to balance the subsidy on the imported one.

And then the people who bring that crude oil out will be angry with you for reducing their salaries, plus the companies drilling won't have much profit to maintain their rigs, expand their rigs, and so forth.

Dude, everything has to operate at a profit. What you are calling for is similar to someone telling you to do the same work at the cost of them paying you half your salary, with no chance of salary increase, even when promoted.

jmoore:
Dumb reasons!!!

They can produce and export to neighboring African countries.

They can produce and the government will buy it at subsidize rates too.

It is cheaper to subsidize locally refined petrol than imported petrol.

That doesn't mean it is a dumb reason. The government has not made any commitment to buying at a subsidized rate from the modular refineries yet. Until then their fears are justified. Also we know a lot of the subsidized fuel imported to Nigeria end up in neighbouring countries anyway so even the modular refineries cannot sell outside the country until we get rid of the subsidies.

mrvitalis:

Stop saying what u don't know what's the price in Togo , Ghana , Benin Republic, Cameroon ?

I am talking of Nigeria not those countries you mentioned. Nothing concerns me with their prices.

jmoore:


Is the cost of production in other countries static?

No, that's why prices rise at a much higher rate in other countries . Nigeria has used subsidy to prevent you from feeling rises of cost in production...it's the reason why the subsidy was brought in in the first place (oil price rises due to the Yom Kippur war of 1973 which meant that fuel prices would rise as well. Government rushed in a subsidy on fuel)

If the rising cost is only present in Nigeria, then you can't blame subsidy.

If we remove subsidy and imported petrol has lower cost of production than locally refined petrol, then buyers would prefer to import than to buy locally.

It's called competition.

Alexgeneration:

They sell their fuel very very cheap.

Government recognition will increase productivity and not sale price.

Their fuel is relatively cheap because they steal the oil. If they're recognised and made to function legally, operations cost will rise.

mrvitalis:

Stop saying what u don't know what's the price in Togo , Ghana , Benin Republic, Cameroon ?

Counter his argument of giving one oil well to one modular refinery to produce and sell to their local market.


I'm waiting.

Nice one Very good 2Now I have another forum to go anytime nairaland mess with me

HonestFriend36: The site is a good alternative to Nairaland

BSsniffer:
story..... modular refineries can't refine crude oil because it would affect dangotes business.


We can divert those subsidies to modular refineries.

Dangote refinery hasn't started business o

mcdokwe:


No, the refineries are obviously not functional because of government's culture of impunity. This is explained in the continuous subsidy of imported fuel despite the 'high cost' (arguable) of fuel.

Or are you telling me the subsidized funds are not enough to keep the refineries working even when those cost run in billions of dollars?

Exactly. Subsides don't allow refineries make profit, they just cover the losses from government setting the price below the cost of production so that we can have 'cheap fuel'.

And yes, the impunity that wrecked the refineries is a side effect of subsidies. (If there was no subsidy, no one would sabotage any refinery since under such a regimen, the refineries would be forced to live off their profits. Any corruption or sabotage would impact profits, and cause problems. Serious problems)

HarryDuce:
Their fuel is relatively cheap because they steal the oil. If they're recognised and made to function legally, operation cost will rise.

You're making baseless assumptions. How do you know that operation cost will rise? Oh, you would want the government to sell the crude to them at the international rate,right?

Alexgeneration:

They sell their fuel very very cheap.

Government recognition will increase productivity and not sale price.

Well, on another thread, someone commented that he bought fuel from 'illegal refinery' at a cost higher than N200.

Also government recogniton means that they have to adapt to the same standards, including environmental , to work well. Meaning they have to buy and build new facilities that meet the new standards, and maintain them,and those cost money. Meaning a rise in their cost of production, and a rise in fuel price.

(Or you want people to keep on having soot and pollution because 'cheap fuel'?)

mrvitalis:
This is what I was saying for long people abused me

Not only that most can't even produce petrol

For what we sale fuel in Nigeria no refinery would break even in 100 years even

Fuel should sale for nothing less than 400 a litre
Not only should subsidy be removed ...#50 to #80 road tax should be imposed for fuel and #100 tax on diesel for road maintenance

Poor people don't benefit from subsidy it's the rich n middle class that do

On this issues of refining, you seems to be anti- people and aligning with the Government!

On a long thing o

salbis:
Honestly, if you think you have any hope for Nigeria and Nigerians you are on a long thing.

Alexgeneration:
You're making baseless assumptions. How do you know that operation cost will rise? Oh, you would want the government to sell the crude to them at the international rate,right?

Well, they will have to buy the oil they're used to stealing. They will also refine using cleaner methods all of which involve money. I'm sure you're no stranger to the soot pollution in Port Harcourt and environs.

Give them crude oil at the price of 40$ pb and they will produce. We can’t sell crude oil to ourselves at the price we sell to opec