backbencher:
.

So, you are now going to tell the people drilling the oil, the people running the rigs that drill the oil and the owner of the rigs that they are not going to earn far less than they earned last year?

Right...see if they keep drilling for oil if government is selling at a discount. Plus, if I was government and you were selling rice, and I told you to start selling rice at N1000 per 50kg bag today, would you like it?

PEOPLE love to make money. Even oil rig workers. Discounted crude=reduced earnings for them their oga, and the owner of the rigs and oil wells.





There is a world of difference between farming for yourself, and farming yam that would be sold to make money. Unless you are Ebenezer Scrooge, you won't sell the yam you farm to your wife so that she can cook!

erico2k2:

As we speak, we can never have it as good for the last two years, for that past 1 year Oil has been above $90 no one is talking about it, they all went hush hush

Subsidy is the right of the common man and its the Only Bill the Fg pays to elevate the plight of the man on the street so it must go on

What they the FG should check is the corruption surrounding subsidy and volume allocated V volumes supplied

We all hailed the NNPC when they became sole importer we never knew theirs would be worse. As we speak, the FG is getting the Highest revenue from Oil since the exportation of crude from Nigeria

For instance, if there is a decline in oil prices and oil revenue, the lagging and collapsing non-oil export sector will not be able to compensate for the drop in oil revenue while domestic demand for the non-traded goods and imports remain sticky. Consequently, the country will be forced to borrow from the international financial market to compensate for the decline in oil revenue. Over time, external debts will increase and so will the debt service obligations. Even when oil prices go up later and there is another round of oil windfall, it is difficult to correct the earlier damage or distortions created by the initial or previous oil windfall. In some cases, the oil exporting country may be forced to adopt some form of structural adjustment program (SAP) to correct such distortions or imbalances. Some of these SAPs are painful and may increase the prevalence, depth and severity of poverty

Let the modular refineries sell to the importers and the FG pays the difference in subsidy period.The west still subsidise Diesel for its people ie in the UK up till now still subsidise Diesel to farmers and some sectors of the economy.

TenQ:

You seem to forget that the cost of oil internationally is inclusive of the cost of drilling.
Nigeria has a sharing formula with the oil companies who drill

The bad economics we run is the cause of the flying inflation we have in our economy.

If it makes economic sense to you when Nigeria has a dual exchange rate, this should make sense to you too.

TenQ:

You seem to forget that the cost of oil internationally is inclusive of the cost of drilling.
Nigeria has a sharing formula with the oil companies who drill.

The bad economics we run is the cause of the flying inflation we have in our economy.

If it makes economic sense to you when Nigeria has a dual exchange rate, this should make sense to you too.

Why are oil subsidies bad economics?


Every year, the Nigerian government runs huge budget deficits that could have been avoided if money budgeted for oil subsidies was allocated to other critical projects.

Subsidies should be used to spur investment in activities that raise the productive capacities of an economy (such as education, health, entrepreneurship, and infrastructure). They should be targeted at strategic sectors of the economy. They should not be used to finance non-durable consumption items like petrol.

Oil subsidies are inequitable, as they transfer the national wealth to those who own several cars and add little or no value to the national economy.

In lieu of subsidies, the government should invest massively in public transportation and boost the transport allowances of public-sector workers.

Removing fuel subsidies would also be good for the environment and safety on Nigerian roads. When motorists pay the full economic price for petrol, they will drive less, emit less pollution and reduce the incidence of road accidents.

There should be a clear communication to Nigerians that the removal of fuel subsidies favours the poor, and eliminates one of the several perks that the Nigerian elites undeservedly enjoy.

Golan007:


You want to compare a man who steals crude oil to refine with one who buys the crude, employs lots of staff, employs scientific methods to refine, and must produce to an agreed standard?

bestdudes:
are other countries not using modular refinery? What kind of stupid gaslighting is this so that only dangote gets power to refine crude?

Abeg carry this ur lie to APC members.

backbencher:


The government sets the price of the PMS you buy, and the price is the same , whether you live in Lagos or Owerri, or Sokoto, or Nguru....that's what regulation means

(When there is scarcity, everyone does their thing, but the bigger marketers like Total, Conoil, Oando, and NNPC sell at the official regulated price)

lalasticlala:


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

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

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:


Sorry to quote you again, but I would like to leave you with this quote, before I fly



Source: Fuel subsidizes in Nigeria, they are bad for the economy, but the lifeblood of politicans.

The federal government spends more than $20 billion a year on subsidies for farm businesses. About 39 percent of the nation's 2.1 million farms receive subsidies, with the lion's share of the handouts going to the largest producers of corn, soybeans, wheat, cotton, and rice.1
https://www.downsizinggovernment.org/agriculture/subsidies#:~:text=The%20federal%20government%20spends%20more,wheat%2C%20cotton%2C%20and%20rice.

Fourwinds:



uccheks(m): 2:06pm
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

TenQ:

Unfortunately the problem we have is greater than the economics of subsidy. It is the economics of production capacity.

In theory, subsidy is bad for the economy but when properly channeled it's a life saver. Do you know that the USA government subsidizes Food and farming businesses?



The question is WHY?

Without revamping the production capacity of citizens, removal of subsidy is a CRIME against humanity.

backbencher:
.

Well, considering that oil has been high for the last one month, plus the money does not come in like immediately.....

Anyway, oil prices mean nothing to me. Nigeria, even if oil reaches 200 dollars per barrel, is a poor, and economically idealess nation. We need more than oil, we must be productive.



Ah, so that's what it is all about. That's why you are so angry with me

For the record

1.Subsidy comes from oil revenue, whose prices fluctuate, and as a reuslt, we end up with deficits in our budget...which is part of why we take loans.

2.Also, government subsdisies education ( which is why you pay university fees less than N50000 a session, not the millions universities like Covenant and Bbcock pay)and power(government forces the power sector to operate at a loss, so that people like us don't pay N100 per kwh for electricity..we pay N71 and below. And the result..the power sector is broke, and N1 trillion in debt....)., and health (which is why you don't pay millions of naira for a Caesarean when your wife needs it in a government hospital. Private ? Another matter).

.

They should, but they cannot because at the end ...people love to make money. Prevent them from making money legit...they will go illegit.

Like now, fuel costs N162 here, and over N300 in all opur neighbours. Nice incentive for smuggling...unless you want to build a wall around this country. (and the smuggling has been going on for decades. Everything has been tried. Including closing the borders. Did not work)




.

No, that would be under Yaradua, when oil was at $145, and GEJ also had it above $120 at several months in 2012, and 13.

Plus it has been there for only one month. One month...does not do much.

Also, we had a prolonged period of low oil prices. Sometimes as low as 30 dollars or less. We had to take loans that time to meet up. At the end, the government has to pay those loans..and when prices go up, paying back loans becomes priority. (We were here before, in the 1980's).

At this point, I quote an article written in 2004

.

Sauce: Managing the Dutch disease in Nigeria. by Dr. Emmanuel Ojameruaye (2004).

.

The difference between us and the West is that the West

1.Pays for subsidies from INCOME TAX.

2.Nigeria pays for subsidies from CRUDE OIL REVENUE. Which as we know is not stable.

3.EVEN THEN, SUBSIDES are not paid in the West like we pay them here. They are paid to the producer, not the end consumer...and diesel still costs the equivalent of N836 in the UK)

(UK has a tax to gdp ratio of 34% and Nigeria is just reaching 8% (7 years ago it was 4.8%).

erico2k2:

U keep shifting the goalpost during the match we are talking OIL here not any other sector.
The west Ie the UK subsidises its diesel for certain sectors to ease the Borden on their operation, they do this by colouring the diesel RED.[/b][b] so its nearly 50% less than regular diesel

Subsidies is not paid to the End user in Nigeria, I have both Diesel and Petrol cars in Nigeria, we pay pump price I don't know about you mayB you get paid directly unless thats not what you meant to type. Subsidy is paid to the importers as the difference in mkt price.

Diesel in the UK today is £1.65 on average and £1.70 in some places naira to pounds rate is N773 todays rate. My car in the Uk is a Diesel
RED Diesel is btw £0.72 to £0.80 in the UK, the difference is paid by the government.
so that quote is like quoting the Minister of Information of Nigeria

backbencher:
.

So? The person drilling still cannot drill at a loss.



We have bad economics because we are not a producer, and yes I know we do.

We also have bad economics in part because we do price controls in petrol, when we should not..and get into a budget deficit paying the resulting subsidy.

TenQ:

Unfortunately the problem we have is greater than the economics of subsidy. It is the economics of production capacity.

In theory, subsidy is bad for the economy but when properly channeled it's a life saver. Do you know that the USA government subsidizes Food and farming businesses?



The question is WHY?



Without revamping the production capacity of citizens, removal of subsidy is a CRIME against humanity.

TenQ:

Our economists to a large extent are all books and no brains.

We import everything we CONSUME and the government need more money to spent hence their cry for stopping subsidy on fuel.

In 2018, 19 million Nigerians paid into federal or state coffers, according to government data.

A World Bank report in that year put the country's economically active population at 65 million - so even with rising numbers of taxpayers in recent years, that is still less than 30% paying tax.

My problem is with economics devoid of production capacity. Every economic theory will fail because economics assume that you have production capacity. Unfortunately, our production capacity in Nigeria (apart from agriculture) is nearly ZERO!

It's the same bad economics that has failed us this far from $1=N1 to $1=N530.

Instead of our economists and President going back to the drawing board they are grappling for straws as they drown themselves and Nigeria in the economic quagmire they have plunged this country.

Bottom line:
When a country import everything, no economic theory can bail them out.

mrvitalis:

So there is no corruption in Ghana , Benin and Cameroon ? So Nigerians are poorer than those country ?

Subsidy itself aids the corruption u want to fight

People like u believe it's possible to have democracy without corruption .. lmfao I laugh ...call me names if u like

backbencher:


They do pay them subsidies, but that comes from the INCOME TAX americans pay, not the revenue that the US gets from exporting agricultural products. That's the difference.

That's why I say, if we want subsides in Nigeria, pay them from the INCOME TAX paid to government including VAT...which means government would have to tax the 70% of taxable Nigerians who don't pay tax owing to being in the informal sector....which people would complain about.

Production capacity can only be revamped by making a profit, not by price controls

Also, you want subsidy, pay for it from taxes, not from crude oil revenue.

backbencher:


Yes, and I told yer, that they pay for it from income tax, not from crude oil revenue




Which reflects as a reduced price for car users, and savings. (Thanks for the correction anyways).




Once again, subsidy in the UK is paid for from taxes...which they can afford because UK TAX to gdp ratio is 34% compared to Nigeria's 8%, AND THEIR gdp is much higher because they are an INDUSTRIAL NAITON compared to oil dependent Nigeria, which APC and PDP have done nothing to fix. Or army rule for that matter.

alphaNomega:
If full regulation is stopping modular refineries from working, then it is the major reason our 4 refineries are not functional.

This sabotage to our refineries is an extensively thought out plan with both state and foreign actors.

backbencher:


We also don't raise enough money from taxes.

As said by the WB via a BBC report



That makes it difficult to raise money for subsides from taxes...even then...



So, let us stop importation of petrol by removing subsidy and incentivising domestic refining...since a domestic refiner can now be free to make a profit.

If you want to be a producer, then by Jupiter and Mars and Ares, and Hera, LET THE PRODUCER MAKE A PROFIT IN PRODUCING.

Good evening. I got to go.

backbencher:


We also don't raise enough money from taxes.

As said by the WB via a BBC report



That makes it difficult to raise money for subsides from taxes...even then...



So, let us stop importation of petrol by removing subsidy and incentivising domestic refining...since a domestic refiner can now be free to make a profit.

If you want to be a producer, then by Jupiter and Mars and Ares, and Hera, LET THE PRODUCER MAKE A PROFIT IN PRODUCING.

Good evening. I got to go.

erico2k2:

This what Im trying to say to the man, there is nothing wrong in subsidy if for anything we should continue the petrol subsidy. The Uk subsidised solar panels for houses so that we can install renewable Energy generators and gave tax incentives to wind and solar farms in terms of taxes etc.The west must have subsidised more than 50 stuff in our every day life but Nigeria subsides just petrol and they want to give that up. Imagine if petrol sell as diesel cos my car in Nigeria is Diesel and I bought diesel last week b4 I returned for N410/litre. Tell me who in Nigeria can do Biz with petrol at N300??everyone will pack up.The stop the subsidy crew have no clue. even the FG I mean no FG has the balls to stop petrol subsidy.I stand to be corrected

TenQ:

Agree with you.

Our Economists and the FG have no clue to the problem of economic development.

Subsidy is actually supposed to help develop production capacities and not consumption. Unfortunately the government and our economists have milked this country DRY and like Oliver Twist, they need more money to spend.

The Chinese government spent almost a trillion dollars in helping the solar panel and the Lithium Battery packs for electric vehicles.

Many Nigerian Economists think that the solution to Nigeria's problem is just mere adjustments of fiscal and monetary policies. They are even now still repeating the same mistake!

freshkpomo:

Your definition of progress is to tax the people to death and then embezzle it because democracy cannot be free from corruption right? Our politicians huge salary nor be problem o, na poor man money when them nor collect dey draw country backward.. clap for yourself Sir.

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.

Osanoghodua1:
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?