There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.

how much is the cost of production?

and which 'other things' is he talking about.

juvewalex:
He didn't explain why local production won't reduce fuel price , if you're producing in Nigeria, will there still be a landing cost ?

Nigeria government is never straight forward in dealing with its citizens.

Na still corruption be this anyways.

NNPC AND ITS OFFICIALS ARE HORRIBLE CORRUPTION RIDDEN LOUTS

If refining license is no longer politicized and the price of crude for local consumption is fixed for level playing ground. The price should
come down.

So invariably, you are telling us that ABA made products should be sold at the same price with the imported wears you order.


What economic reason is why Locally produced PMS will not be cheaper than the imported one

I don't believe in what he said, what about forex landing cost and some many other foreign charge. I am not sure the guy know what he said.
There may be different but it may not be too much.

puregoldsusan:
So invariably, you are telling us that ABA made products should be sold at the same price with the imported wears you order.


What economic reason is why Locally produced PMS will not be cheaper than the imported one

Don't mind them. They are protecting Dangote Refinery. The refinery will require FPSOs to supply them crude from offshore field which have higher production costs than onshore fields that will be supplying modular refineries in the SS and SE.

We can also see the effect of distance from depots on current fuel pump prices. So if we have modular refineries in the SS and SE, then the supply range of Dangote will be reduced. For instance if Dangote sells PMS at 500 and a modular refinery in PH sells for 520, he is still in a better position that Dangote in PH and neighboring states further from Lagos such as Uyo.

I watched the interview and this is not exactly what the Man said. He said there is a high chance of the price dropping and the government is also part of the Company. He also said in a due time there will be competitions that will lead to reduction of the price. He also added that the global oil price can also affect it drop or to rise more.

😄😄😄😄😄😄😄😄
The bats who refused to listen go get am hot 😄😄

yaki84:

How much be local rice,, how much be foreign rice?

Some China slippers even cost lesser than naija made slippers...

Cost of production varies in every country...
In Nigeria cost of production includes sum total of all u spend before getting ur product,
From bribing officials, paying tax to communities, local govt, state govt and fed govt,. Other sundry charges and security Levy both to state, local and fed govt plus hiring police and army for protection plus wages to workers both real n ghost staffs...

So it cost more to do business in Nigeria than in any other country

You get time to explain 😄

Godszilla:


https://punchng.com/dangote-ph-refineries-others-wont-change-fuel-price-nnpcl/

So is it compulsory that Nigeria must sell crude oil at international rate even to local refineries for local supply?

omohayek:

Again, all of this is utterly irrelevant. The economic analysis is what matters here, not who voted for whom. It's notable that you have nothing whatsoever to say about said economics, and how they would differ under any other government. Would Atiku or Obi have abolished the laws of supply and demand? If you have nothing to say about the economic realities at hand, all you're doing is spewing bile over the electoral defeat of your preferred candidate.

so you know about supply and demand and how they influence prices but you are quick to blame Emefiele for weakened naira when he has no direct control over the supply or demand of forex and by extension Naira value.

persius555:
All these is cock and bull story. Allow as many players into the fencing sector and allow free market economy take shape.

This dangote celebration is just another means of economically pinning down the growth of Nigeria.

it took Dangote some 7 years to build his so expect him to have a strong monopoly of petroleum products for same number of years. It isnt as easy as allowing others join Dangote. As it stands now, time is needed and a lot could go wrong. What I expected a serious govt to have done was to heavily partner with Dangote and aim for 50% stake in that refinery.

That way, they get to share forex inflow, profit and other benefits. That should have been done when Dangote was getting cheap forex. All we have now are weak emotion based suggestions that Dangote should make his product and forex cheap.
Sad.

blaise26abj:
Freight cost to and from nigeria , landing cost . Foreign refining expenses as well as taxes in the countries with the refineries . How will it not reduce?

However , I always said Dangote is no fool . He borrowed money to build the refinery . He would rather sell at the current price or higher to quickly meet his financial obligation . In fact if it is 1000 per litre the better for him . Why do you think that subsidy removal coincides with the start of his refinery ? Make we dey play dey go .

It's supposed to reduce as you said. It's either they want to scam us so we can continue with subsidy so they can continue smiling to bank with inflated importation or they are holding brief for Dangote so he can peg the price very high when the refinery starts delivering.

Freelancer2020:




They always think ppl are dunce, how can you compare the cost of a product made locally to the one refined in a foreign land, and they need to be careful tbh.

Why will a private businessman reduce his price for you?

D refinery won't start working this year.
Buhari jus go cut ribbon.

Patrickker:
Very true. Save employment that they may grant, the prices are even going to soar. When Dangote bought Benue Cement Company Gboko for instance, we all jubilated here and thought prices were going to crash, but we unfortunately saw the prices doubled. Infact, a bag of Dangote cement in Benue where the product is produced costs more than it is when the same product is taken to Kano. The rich always have a way.

Just another way of raising his stakes as one of the richest men in the world. Plus or minus, it is good for the economy, but don't expect prices to crash.

How is it good for the economy?

blaise26abj:
Freight cost to and from nigeria , landing cost . Foreign refining expenses as well as taxes in the countries with the refineries . How will it not reduce?

However , I always said Dangote is no fool . He borrowed money to build the refinery . He would rather sell at the current price or higher to quickly meet his financial obligation . In fact if it is 1000 per litre the better for him . Why do you think that subsidy removal coincides with the start of his refinery ? Make we dey play dey go .

The oil industry is far more advanced than you think. The price of crude oil is volatile. What if you import crude oil at $80 per barrel and by the time you want to sell, the price has fallen to $50 per barrel? This bankrupted Otedola in 2009.

How do you compete against a local producer who bought at $50 and you bought at $80?

If you people really worry about Dangote controlling the market, then ensure that there's real competition by having low import duty on refined crude as that is what will keep him in check. The man said the importation would stop once his refinery is ready and the PIA stated only local producers of refined crude would be allowed to import. One can be certain Dangote had that inserted

So CBN gave fx $1/N199 when black market was at $1/N600, to sell refined petrol at prevailing market rate?
So NNPC is supplying crude of 300k bpd to Dangote so that they can charge Nigerians higher?

So NNPC invested $2.7bn into Dangote for 20% equity so that Nigerians can pay higher??

It seems FG wants to monopolize subsidy and channel it to Dangote..??

Kyari government can give him tax concessions, and landing/freight costs will be removed. It's our crude, we can sell cheaper to Dangote, so he sells cheaper pms to Nigeria. May e it's time to remove kyari.

Godszilla:


https://punchng.com/dangote-ph-refineries-others-wont-change-fuel-price-nnpcl/

Una see this people , so if you minus the cost of transporting crude abroad and importing refined products to the production cost, you are telling me price shouldnt come down
Omo this people they use us play

dalass:


NNPC AND ITS OFFICIALS ARE HORRIBLE CORRUPTION RIDDEN LOUTS

Your prostitute mother will be rolling in her grave now