baralatie:

If you say you don't want subsidy because of the implication of cost.
Should you now by local production engage in sustaining the same cost unit of the product as if you are importing the product

SamboAnguissa:



The refineries overseas that the products are imported from don't undergo maintenance? They don't pay taxes? Are there staff volunteers who work for free? You think those refineries have not factored all of that into their cost of production, which will be added to the price they sell? I don't get your point.

Newdawn30:



Bro no mind the guy, because you are supporting tinibu or apc. That doesn't mean you should stop thinking. People just support things workout interrogation it

nairalanda1:


Things cost money, you know.

1Alex:
So what's the difference between local production and importation?

He did not say why the price will remain same. He only said that the refineries will add cost of refining the product, why will the pump price remain same if the cost of importation is removed?

nairalanda1:


At the end of the day, the problem is, people want to be paid.

Transport costs are expensive, mind you. Remember our roads are bad, and distances are long.


That's why we have to get the railways fixed and a pipeline network running so that we have reduction in transport costs too.

baralatie:

That is why you started local production inorder to cut off those inputs to your costs of production so that your unit cost of sale of product will be cheaper than the imported ones.
If I am making pure water locally Andi am selling it at #100 a bottle why we uld I want import spring water from the USA to buy at $0.55.
But if a govt agency want to create and continue it's structure of money ganging it will say wether it is locally,imported the price of water is $0.55

You get the gists now

isio1:
You are just busy defending the indefensible. I will advise that read again all what you have written. For Mele Kyari he is doing his job thinking he will be retained or he will be there forever. "Community Chance" if you know what I mean.

Larry1960:



I know, but you can't compare the total cost on importation of these products to their different destinations with d cost of transportation when producing locally and transporting it to the different locations. There is supposed to be a slight difference there by reducing the price a little bit. Even So many anlysts have analysed this

Abeg if na so then they should continue importing na only be say we are killing our naira

Omo e surprise me when the guy talk say even when we start local production like when pH refinery starts price would remain the Same

There is no landing cost again nah
Okay he's talking of cost of maintaining the refinery shey those ones abroad no dey factor in that too for the price to be at that level too

nairalanda1:


You don't.

The problem is, the pure water you are selling actually costs N250, but you are selling it at N100 because the government told you to do so, and the subsidy being paid is not enough to cover the loss.

So, your business crashed, you go into imports, and you sell the imported water at a N100, while government pays you the balance. Water you are importing at N350 per bag. You even start lying about what you imported to make more money.

And government has to take more and more money from the budget to pay for your claims...and other people's claims. Deficit and debt results.

Whereas, if government had let you sell at N250, such an issue won't have happened



See how subsidy damages our economy?

Good morning. E don do.

baralatie:

Iemm!
You did not get it!
In the pure water business of Nigeria as at today o.
There is no foreign product cost that can rival local production in terms of capacity ,cost and logistics .I used this to explain,buttress apoint on the importance of local production vs foreign importation.
Now with respect to refinery and cost of production.
You cannot defend the notion that if a country paid $1.02 to import fuel product into country because it lacked capacity to produce.the same country after opening up local production capacity will still pay $1.02 saying that the cost of production is the same as the cost of importation.
Haba

nairalanda1:


You still don;t get it.

Anyway, I have tried. If you want your subsidy back, go and run for office. And get it back.

baralatie:

Stip using subsidy removal as an excuse or as a threaat to sustain bad policies.
Why should cost of local production of a product be the same as an imported product and you think it is normal

richmond500:
the market will regulate the price when competition sets in.
For now there is no competition and it is a Monopoly

1Alex:
the market? Probably by independent importers abi?

If yes, then you are still talking of importation.

richmond500:
with subsidy gone, there will be investors which will lead to competition and the local market will then decide the price.

1Alex:
but where will the investors invest? In Dangote refinery or where?

nairalanda1:


Okay, here is how subsidy damages the economy.

Assuming that the two don't happen...1) smugging 2) poor accounting of how much fuel we actually consume here.

The problem with subsidy in Nigeria is simple.

1.The cost of production always increases. This adds to the other costs, and leads to subsidy costs increasing.(This applies even if we are producing domestically)

2.The amount of fuel we consume increases year in and out. At the end of the day, this increases subsidy costs.

3.Also, the money to pay the subsidy has been low...as we have not been earning enough from crude since 2014, when oil prices began falling. (Meaning we had to take loans to keep our heads above water).

As a result....we have to take more and more money from other parts of the budget to pay for the subsidy year in and out. As seen in 2022, when subsidy costs were 4.6 trillion naira, and as at today we have spent 3/4 of that in 2023 for subsidy. This causes a hole in the budget which leads to us to borrow more...on top of the borrowing we do because of low oil prices.....which leads to us being in mega debt.

And the scary thing...last year, we were borrowing to pay for the subsidy itself.

That is why the subsidy has to go.

Hope you get.? Calling me names does not change the bad situation. If we keep the subsidy...and in my heart of hearts, I wish we could....we would eventually reach a point where we would be all borrowed out. And money would completely run out, and we would be so broke that things like salaries won't be paid.

Once we are there, you won't like it.

Now call me an oppressor and an APC supporter, thank you.

LordAdam16:


This should not be a surprise.

Plastic, rice, chicken, noodles, cement, cable and a lot of stuff we produce locally are not significantly cheaper than imported variants.

Gasoline will not be different. He should not have said it on national TV tho'.

-Lord

richmond500:
FG has commanded the Portharcourt refineries to start working at optimum capacity by year end, Dangote will work with Portharcourt own to reduce Monopoly.
Investors may import too, which ever one that offers the most competitive price, whether local buyers or imprters will be the bull in the market.
For now only NNPCL imports

baralatie:

You are still going about using subsidy removal as a threat🙄
I will still say it again you don't need to use subsidy removal to justify the claim that the cost of producing refined products at your working local plants is the same as the price of imported refined products from foreign plants

Treadway:
people just dey yarn trash since, I jus dey laff. Nigerians like self deceit gan, so no surprises. Local rice is still fresh in our memory. The price difference btw so called imported after all costs and local na 500 naira. Lol

Don't even get me started on how some clowns, both old and young are expecting Dangote to give you cheap fuel..MENT or stupidity, or both? Dangote? 'Cement' dangote? Na im dem expect say go sell cheap fuel..when I don't expect any competition to spring up in the next 8 years at least. Like someone has intelligently said yesterday, calculations have been finalised, and basically what NNPCL shared yesterday was the NNPCL- Dangote refinery price list.

The sad thing is that there are zero guarantees that the funds will still not be misappropriated even after the huge storm that has come and will be here for a while....ppl dey here to everly sing their praises even unto their doom. As they sang Buhari's praises for 8 years blaming Jona, na to dey sing this one praise too blaming Buhari. It has begun already.

The coming days ehnnnnn! I no go talk pass this one.

nairalanda1:


Get the pipelines fixed, the rail fixed, prices may reduce.

But at the end, profits have to be made. So that things run well.

Anyway, we shall see how things go.

1Alex:
So what's the difference between local production and importation?

He did not say why the price will remain same. He only said that the refineries will add cost of refining the product, why will the pump price remain same if the cost of importation is removed?

baralatie:

You see that ph refinery e.
I dey pray God say e work because that is the refinery that nnpcl uses to fraudulently get funds from fg
One month after operation the same nnpcl will announce that ph refinery has shut down for repairs

Dennisbulkan:


Dangote refinery is a profit making organization; it borrowed tens of billions of dollars which accrue interest overtime, someone has to payback all the money right? The refinery employed thousands of Nigerians that dangote pays their salary, right? & dangote built the refinery to make profit, put all of these into perspective including the cost of crude oil per barrel, cost of production, taxes, logistics & come with your own calculation & let's see.

Benefits: Dangote refinery is not a government or a non profit organization. It will boost our GDP & many more. You can do more research on this subject to educate yourself. Google is there for you if you can afford to ask this question on nairaland forum, you can equally channel the same energy to ask Google for elaborate answer

Dennisbulkan:


Dangote refinery is a profit making organization; it borrowed tens of billions of dollars which accrue interest overtime, someone has to payback all the money right? The refinery employed thousands of Nigerians that dangote pays their salary, right? & dangote built the refinery to make profit, put all of these into perspective including the cost of crude oil per barrel, cost of production, taxes, logistics & come with your own calculation & let's see.

Benefits: Dangote refinery is not a government or a non profit organization. It will boost our GDP & many more. You can do more research on this subject to educate yourself. Google is there for you if you can afford to ask this question on nairaland forum, you can equally channel the same energy to ask Google for elaborate answer

baralatie:

You see that ph refinery e.
I dey pray God say e work because that is the refinery that nnpcl uses to fraudulently get funds from fg
One month after operation the same nnpcl will announce that ph refinery has shut down for repairs

1Alex:
Are the foreign refiners not paying salaries and making profits too?