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Nairaland Forum / Nairaland / General / Politics / NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre (21287 Views)
Petrol Pump Price Reduced To N121.50 By FG / FG To Reduce Petrol Pump Price From ₦125 To ₦123.5 Per Litre / Expected Petrol Pump Price Drops To N114.53 Per Litre (2) (3) (4)
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Re: NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre by Nobody: 6:49pm On Jul 19, 2022 |
Saintinoo: The money they are spending on subsidy....if the government removed subsidy and kept the money in the treasury...the petroleum sector will make profits that include an amount equal to the amount we spend on subsidy plus extra profit...which can then be used to fix and maintain refineries. Refineries do not work in Nigeria because...quite simply...it is not profitable to refine fuel in Nigeria. Under the subsidy system...it does not matter if the refinery works or not...subsidy money will be paid. That incentivises stealing of subsidy money and government money...and sabotage of the refineries...since whether they work or not..subsidies and government money would be paid to the sector. Also subsidies limit the amount of profit the sector can make...meaning there is not enough money to keep refineries running (and yes, I know they have spent money on reparing refineries..but let us be frank..the money is not enough, plus at the end, the thing is not running at a profit...meaning no cash for continuing maintenance...meaning the thing will break down) The downstream is then forced to look for other means of making money eg...black market, smuggling to other African countries, to sell above N300 per liter. And we still lose money even then Removing subsidy, privatising NNPC is the only way we can have working refineries...because the profit motive would ENSURE they work...since under the new no subsidy regime...the refineries have to work well...meaning no stealing, sabotage, or corruption...because it would affect profits. The reason why is that Nigerians do not want to pay the market price for fuel. We want to pay N30 for one liter of fuel because we are poor, and because we are poor. But the truth is, if you want any business to work...it has to have the means of making a profit. The thing is, experts have been telling us for decades...even before I was born, that we should get rid of subsidy. We refused to listen to them. Now we are paying the price of over 40 years of doing the wrong thing. (We make the same mistake in the power sector, which is why we have no stable power too) So subsidy has to go. You do not have to agree with me, and before you start....I know that if it goes, fuel will cost as high as N400-700 a liter. I know that prices will go up. I effing know. But the alternative is, we end up spending up to N7 trillion on subsides or more by Dec 31 this year on keeping fuel below N200....or we save money by removing subsidy, and using part of it to mittigate the pain of removal. Take your choice of medicine...it is bitter either way. |
Re: NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre by Cognitivereason: 8:21pm On Jul 19, 2022 |
Subsidywise20:first bolded Do you really think Government will fully deregulate PMS especially with what we have seen with AGO?..hmmm let wait and see second bolded. If FG still wants PMS at a fixed and controlled price. they will have to pay subsidies ..sufficient subsdides dat will cater for the welfare of the refinery and generate profit for dangote.. they can achieve this by selling crude at an extreme discount...in summary if deregulation is not removed..subsidies goes to dangote |
Re: NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre by Nobody: 8:34pm On Jul 19, 2022 |
Cognitivereason: Right now we have a choice between 1.Paying subsides to Dangote or NNPC...or both, and spending an increasing amount on subsides due to rising production costs, and cost of doing business per year. At the expense of the budget...either way, we still end up paying too much money and taking loans to cover the resulting budget deficit. (Funding subsides from raised taxes is another matter)...plus subsidsing Dangote essentially means we don't let him make enough of a profit to run and upgrade his refinery...which leads to it breaking down, and then we back to square one. 2.Not paying subsides, meaning prices go up to over N400 per liter....BUT...government saves the subsidy money and uses it for education, health, sports, welfare, salaries, etc...meanwhile profits in the petroleum sector attract investment...plus government gets increased revenue in the form of tax...in return for some years of high fuel prices. |
Re: NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre by SIRTee15: 2:57am On Jul 20, 2022 |
Kayyy: Govt do not need to subsidise local refineries. Nnpc can sell crude oil to them at fixed cost based on agreement like it's done iran and Saudi Arabia. Though they may not be able to export products from such arrangement due to WTO regulation on subsidised products. Even if govt decide that local refineries should buy crude oil at international rate, fuel will still be cheaper because it's not going to be subject to fluctuating dollar rate. So the permanent solution is to refine crude oil locally for subsidy to go. This is not the right time to remove subsidy, it should have been done 2 yrs ago when FG was actually not subsidising fuel due to low price of crude oil. Nigerians would have gotten use to the gradual rise of pump price and adjust accordingly. FG would also have had enough time to show Nigerians what it can do with the subsidy money in other sectors of the economy. But telling Nigerians to buy fuel from 200 to 800 per litre now is suicidal. Trust me this APC govt may not survive it. Nigeria will implode, lekki tollgate protest will be a child's play. They know and the decision to postpone it indefinitely. It's going be the headache of next govt. |
Re: NNPC Quietly Approves Petrol Pump Price Hike To ₦179/Litre by Cognitivereason: 4:46pm On Jul 20, 2022 |
Subsidywise20: They both come at a cost let see how Obi and Yusuf will tackle it |
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