TheGoodJoe:


What I know is that it is an illogical lie for anyone to try to make it seem the same cost to buy imported petrol from overseas, compared to buying from local refineries.

The government buying from local refineries does not mean making them sell below the production price but above. The government bears the brunts of the excesses.

That is what our allocations are for. Making lives easier for the masses. Not harder.

Our allocations are not for politicians to buy exotic cars and build mansions for their girlfriends.

You guys stop making it look like it is a crime for the government to spend allocations on the masses.

It is illogical for this man to sell to us that it is okay to keep importing, instead of channelling to funds to enable local refinery operators to meet local production of PMS.

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


We can divert those subsidies to modular refineries.

backbencher:



Subsidies means that the refineries would be forced to sell at a loss, and the subsidy would be paid to cover the loss.

The same subsidy would be inadequate to cover the loss, because cost of production rises every year.

We did the same with our 4 refineries, forced them to operate at a loss, and paid a subsidy that did not cover the loss.And they all broke down because they were not allowed to be profitable in the name of subsidy, with corruption and sabotage being the side effects.

mrvitalis:

Bros crude oil is over $100
In simple words, every 159 liters (barrel ) of Crude oil produces the following:
* 73 liters Petrol
* 36 liters Diesel
* 20 liters Jet fuel & heavy fuel oil
* 6 liters Propene
&
* 34 liters of other products (Butane, Asphalt & Sulphur) this is even the efficiency of big refineries but let's assume small refinery can produce this
That's 12k for petrol (at 170)+12k for diesel(at 350) +8400 for jet fuel at (420 ) plus propane 4800( at 700) that's 37200 for a product u bought for 55000 ($100) that's that's 18k loss ..ooh

So let's assume their is a petrochemical plant that would by the waste at 8k highly unlikely ...that's still 10k loss ...

Notice a price the products at retail price

Power , labour, maintenance haven't been added ooh

So oga would you do this business after investing 15 million dollars ?

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

mrvitalis:

You guys are so emotional and don't see the big picture reason why Nigeria is like this

Alexgeneration:

They have been producing the fuel without these your analysis and supplying them to the filling stations.

Take the byproducts to petrochemical in Rivers state.


The ones that were refined abroad, did the refineries pay for the byproducts? NO. They gave us what we wanted, we paid them and left the byproducts for them. So,why the change of operation because it's refined locally?


This is one of the reasons people hate this country and the leaders.


You pay millions abroad to refine the oil, we said, pay the same millions to your fellow countrymen to refine the same oil, you begin to give excuses.


Give them just

mrvitalis:

Sure but they should have removed it in 2015

freshkpomo:

I said it before that yiu are stupid. So because they did not increae fuel price that's why Nigeria is like this? If all the money they stole were properly utilized will we be here in the first place? You are just too dumb, it's an insult wasting insults in dumb people because they never learn. So it's our enotion that embezzle funds to Europe? You don't know how state government tax the hell out of people, your brain need an upgrade.

uccheks:
I'm I missing something. You pay subsidy on imported products with landing cost inclusive. Yet you can't pay subsidy to encourage local modular refining pending when you are sensible enough to deregulate. It's either I'm too stupid to understand what's up or the MD is a Duns. Irredeemable Clowns

Fourwinds:
I wanted to ignore this thread but many of you reason through your anus...so poor people don't take transport right? A young graduate earning #30000 to #50000 won't take taxi or buses to work abi.. And farmers won't transport themselves and goods to the market right. Reason with your brain not anus

BennyDGreat:


Is it not the same people in government today that protested against it.
Now, it's difficult to do that due to widespread inflation.

The blueprint wey we no get for Nigeria really messed up things. Removing subsidy without nothing to reduce the effect on the masses is a misfire.

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


We can divert those subsidies to modular refineries.

backbencher:


Because you did not read the article




In other words, if you want a madular refinery, you have to let it run at a profit, and that means removing subsides, and allowing the market to control the price...ie make a profit.

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.

backbencher:


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.

TheGoodJoe:


Are the foreign companies not paying these, importing crudes, then you pay for landing cost etc?

We will use local crude, which the foreign refineries buy. We will not pay landing cost.

So the cost is cheaper for the government to buy than importing.

It is cheaper than importing. Not free. Cheaper. So government will spend far less subsidizing it and the local refineries will not run at a loss.

erico2k2:

Sorry thats is Daft on the part of the reporter cos if the subsidy was paid to the local refineries, they can function till such time where the subsidy is refused. There should have been no talk of subsidy not being paid sited as the reason the local refineries cant work Rather NNPC is sitting on it to make sure they dont work

erico2k2:

I think you should pay attention to subsidy 101

erico2k2:

you come across as someone with no BILLS YET
cos this right there is shallow, no offence!

KazikageSama:


You are right Sir, cost of production increases every year but let's not forget that even subsidy also rises every year to counter the production rise.

Raypawer:
How about subsidy for modular refineries?

It's better than importing fuel

TenQ:

Unfortunately the mumu government forget that they own the oil wells and could have decreed that modular refineries purchase crude oil at a discount

If I have yam farm and my family has to eat pounded yam, should I give my yams to the cook I employed to cook for my family at market price?

backbencher:


So, you want a refinery to refine fuel at N250, sell it at N150, and lose N100 as a result per liter of fuel, and pay a subsidy of N30 that cuts the loss to N70 per liter of fuel?

Nice for the masses, but bad for the continued functioning of the refinery. Local or otherwise.

backbencher:


No, because it means the government will set price at a level where they lose money, and give them subsidy that won't even begin to cover their losses.

That's a big reason why we lost our old refineries.

timefarm:

What is all these you are saying?
The subsidy being paid, is it profit or loss?

It will still amount to the same thing. The subsidy that ought to be paid for the qty being refined here can be used to balance the exploration and production company for now.

Besides all things being equal, the cost of refining here will be cheaper since shipping fee will be out of it.

Even if same cost, more job opportunities created here.


So your analysis does not hold.

[quote author=erico2k2 post=110776445]
I think this is the time for you to leave and stick to Wolves V crystal palace.

If you indeed know what subsidy is you wont have made that statement, it feels like have no clue of what it means for an FG to subsidise a product for its citizen if you knew then you would have realized that the 100 you are quoting as loss would be the subsidy!
once again read up what subsidy means instead of making yourself sound not so intelligent!

erico2k2:

Nop our Old refineries died cos people want to import and inflate the volume of imported product to claim subsidy for fluids they never supplied.

backbencher:


Problem is, the subsidy rising is dependent on government revneue.

Revenue comes from crude oil...whose prices are never where we want them (Even during the times of plenty under GEJ, we were still ten dollars short of our ideal crude oil price on a good day...)..so at the end we take loans . (That's partly why Bubu takes so many loans. Even now, he needs N3 trillion for subsidises this year, up from N1 trillion 3 years ago.)