Subsidy still dey. If there is no subsidy, DPK can never be higher than PMS in Nigeria.

Subsidy is gone only @ the National Stadium

HenryTimes:
Subsidy still dey. If there is no subsidy, DPK can never be higher than PMS in Nigeria. Subsidy is gone only @ the National Stadium

Exactly...especially since the landing cost has risen above the set prices since October 2023.

The government does not want to lose, so they sacrifice the economy on the altar of political ambition.

Gadafii:
...

The only way you can afford a subsidy, assuming you were president

1.Crude oil production should rise to 40 million barrels of crude a day, with the price remaining above 90 dollars a barrel.

2.Tax to gdp ratio risies to 40% and over 70% of the taxable population was paying tax,

Then you would have the funds to pay for subsidy.

nairalanda1:


Exactly...especially since the landing cost has risen above the set prices since October 2023.

The government does not want to lose, so they sacrifice the economy on the altar of political ambition.

That's 9ja for you

Gadafii:
I can now tell you that you don’t know what you are saying, partial removal was the way to go, so that the economy can adjust to it gradually, while working on bringing the refineries to optimal capacity, instead of the abrupt and total removal APC govt did without any of the refineries working

So in other words, Buhari and Tinubu are also right.

As for me, they, and PDP are all wrong. Subsidy had to go totally, and it had to have happened since 1993. The result of keeping it is massive debt, broken refineries, and massive deficits, as well as corruption, and mass losses via smuggling.

You claim debt would have been higher, you honestly have no idea of what you are talking about, how much was our external debt Jonathan left for buhari, how much did buhari left for tinubu even without removing the subsidy, what was our external reserve pre-buhari regime and now, and lastly why did tinubu opposed the partial removal then just for him to support complete removal now, I need you to answer intelligently otherwise don’t bother to quote me cos I won’t reply you anymore

It is precisely because Buhari kept subsidy that the debt rose as high as it it (among other reasons, including failure to diversify, and poor tax uptake). And it is precisely why he should have totally removed it in 2015, as experts advised, instead of keeping it and doing partial removals to reduce costs now and then

nairalanda1:


So in other words, Buhari and Tinubu are also right.

As for me, they, and PDP are all wrong. Subsidy had to go totally, and it had to have happened since 1993. The result of keeping it is massive debt, broken refineries, and massive deficits, as well as corruption, and mass losses via smuggling.

It is precisely because Buhari kept subsidy that the debt rose as high as it it (among other reasons, including failure to diversify, and poor tax uptake). And it is precisely why he should have totally removed it in 2015, as experts advised, instead of keeping it and doing partial removals to reduce costs now and then

So the billions buhari borrowed are not the reasons for the huge external debts


You are unbelievable, the expert that advised total removal, what else did they advised to be put in place before subsidy removal

Because you don’t even need to be an expert to know that functional refineries are needed before subsidy can be removed, no dam refinery is working and subsidy is removed, same you who admitted fuel won’t sell lower even if dangote start refining is saying all of these, ?

Gadafii:
So the billions buhari borrowed are not the reasons for the huge external debts

A problem with subsidy is that it forces the government to run a defcit, which leads to more loans. Hence, Buhari taking more loans...particularly as he ignored good advice to remove subsidy totally.

You are unbelievable, the expert that advised total removal, what else did they advised to be put in place before subsidy removal

Well run social programmes have been advised , plus putting the money into a sovereign fund.

Because you don’t even need to be an expert to know that functional refineries are needed before subsidy can be removed, no dam refinery is working and subsidy is removed, same you who admitted fuel won’t sell lower even if dangote start refining is saying all of these, ?

The only way you would get investment in refineries is if you can guarantee that there would be no price controls and the resulting losses, which can only happen when there is no subsidy.

Dangote is an outlier. If his refinery crashes, he has the kind of collateral that most other would be investors do not have. His other lucrative industries.

nairalanda1:


At the end of the day, things have to be sold at a profit, no matter what you think.

Selling at a profit doesn't mean "people should walk to work" especially from an item that is HEAVILY consumed in the country,

There is a reason Nigeria is one of the few countries with 'poor man size' for EVERYTHING, this is not a rich country,

Luckily we have people like BUA that understands that maximizing profit shouldn't always be the priority, especially when u can't stop selling

StaffofOrayan:


Selling at a profit doesn't mean "people should walk to work" especially from an item that is HEAVILY consumed in the country,

There is a reason Nigeria is one of the few countries with 'poor man size' for EVERYTHING, this is not a rich country,

Luckily we have people like BUA that understands that maximizing profit shouldn't always be the priority, especially when u can't stop selling

It still does not matter, people cannot sell things at a loss, otherwise , salaries will not be paid, suppliers will not be paid, manufacturers will not be paid, even taxes will not be paid.

we are in big big trouble.

That amount isn't enough. It should be at least 5k per litre in line with world prices. At least by 2027 it should be around 7k per litre so that APC can be voted for again.

Eddygourdo:
That amount isn't enough. It should be at least 5k per litre in line with world prices. At least by 2027 it should be around 7k per litre so that APC can be voted for again.

I second.

By the time tinubu is done and nogeria becomes a shadow of itself his supporters will have brain by force that's if they even will still be alive to stand on their mandate

Gist4u:
1200 per litre ontop 30k minimum wage

Sebi u dey work. Thay is why your concern is on minimum wage. What about who no get work

Hadeylex:
The Nigerian National Petroleum Company Limited and fuel marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria, on Tuesday, clashed again over the removal of subsidy on petrol.

This came against the backdrop of the depreciation of the naira against the United States dollar at both the official Investors & Exporters Window and the parallel market.

On Tuesday, the local currency closed at 998/dollar at the official market, while it traded at 1,225/dollar at the black market.

On the back of the falling naira rate, economists and oil marketers said PMS subsidy was increasing in recent times, but the NNPC quickly countered these positions and declared that it was recovering its full cost on the importation of Premium Motor Spirit, popularly called petrol, countering the positions of

The Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, had during a live television programme on ChannelsTV on Sunday, explained that fuel subsidy was not removed but reduced.

Similarly, oil marketers told our correspondent on Tuesday that subsidy on petrol was increasing considering the crash of the naira against the United States dollar and the cost of crude oil, stressing that PMS should sell for N1,200/litre in a free market.

Petrol, which is solely imported into Nigeria by the NNPCL, currently sells for between N617/litre to N660/litre, depending on the location of purchase in Nigeria.

Also speaking on the matter, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said there was partial subsidy on petrol, but noted that the commodity was subsidised by the government for political, social and economic reasons.

Full cost recovery

But when contacted, the Chief Corporate Communications Officer, NNPCL, Olufemi Soneye, described the positions of economists and marketers as assumptions, and insisted that the Federal Government had stopped subsidy on petrol.

President Bola Tinubu had during his inaugural speech on May 29, 2023, declared that subsidy on petrol was gone, a declaration that was effectively implemented the next day by NNPCL.

Before Tinubu’s declaration, the pump price of petrol was below N190/litre, but it jumped to over N500/litre after the President’s statement, and moved up again to over N600/litre a few weeks later.

Asked to state if the NNPCL, being Nigeria’s sole importer of petrol, subsidising the commodity as posited by dealers and experts, the oil firm’s CCCO replied, “We prioritise our time on substantive matters rather than responding to assumptions.

“At NNPC Ltd, we prioritise national development through energy security and sustainable growth. We reiterate that the Nigerian government does not pay subsidy on fuel; we recover full costs from our imported products.

“As a global energy company, our focus remains on fostering a vibrant and energy-secure Nigeria.”

‘Subsidy reduced’

Rewane had earlier explained that subsidy on petrol was reduced and not removed, while featuring on a live television programme on Sunday evening, as he further highlighted the effects of the reduction in fuel subsidy and how it was affecting salary earners in Nigeria.

He said, “At the inauguration, it was said that (fuel) subsidy was gone but subsidy was actually reduced.”

Buttressing his position, he explained, “There is the convergence of exchange rates and reducing the windows into one. The consequence of that is that money has been transferred from consumers to the government.

“Subsidies are reversed taxes; if you reduce them, you increase the people’s taxes and reduce their income. What has happened is that government revenue has increased by 44 per cent between May and June (2023). Money has been transferred to the government but what is the government doing with it?

“The consumers, on the other hand, had a minimum wage, which in dollar terms was $40 in 2002. In 2019, it was about $70, but it has now been reduced to $24.”

Marketers project N1,200/litre

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, stated that subsidy on petrol was rising and that the cost of the commodity should be around N1,200/litre in a free market.

“To be pragmatic in this analysis let’s consider the cost of petrol today in the United States. For premium petrol, it is $2.99, while super petrol sells for $3.15 or $3.10 depending on the part of that country where you are making the purchase.

“Now, $3 in Nigeria is over N3,000, because a dollar in the parallel market is over N1,000. You can also see the cost of diesel, that is over N1,000/litre, and it is important to state that petrol is usually higher in price than diesel in a free market.

“So if you consider the cost of diesel, dollar and other international factors, the price of petrol in Nigeria should be around N1,200/litre, but the government is subsidising it, which to an extent is understandable,” he stated.

Ukadike noted that he had earlier explained that the government was implementing quasi-subsidy, and by this it means that “the Federal Government, instead of taking out the subsidy by 100 per cent, decides to take out about 50 per cent.”

The IPMAN official, however, expressed optimism again that the cost of refined petroleum products would reduce as soon as the Port Harcourt and Dangote refineries start producing the commodities.

“I also believe that there will be a reduction in the prices of petroleum products this year when you consider what the government is currently doing. The coming onboard of the Port Harcourt refinery and the supply of crude to Dangote refinery are good developments in the sector.

“Their operations will help stabilise the price of PMS and other petroleum products in Nigeria, because it will definitely cut down the importation of products,” Ukadike stated.

Social, economic reasons

The Centre for the Promotion of Private Enterprise CEO said subsidy was being retained partially because of its economic, social and political implications.

Yusuf said, “To protect the citizens from further hardship is the reason why the government seems to have applied the brakes on subsidy removal. We are all witnesses to the pain and hardship that citizens are going through.

“So when you are adopting some of these policies, especially these liberal economic policies, it comes to a point where you have to moderate your position for social reasons.

“Just as the World Bank said, if we want to leave the price fully to market forces and the liberal economic policies, the fuel price will be above N800/litre. Can any government that is sensitive to the feelings of its citizens allow that to happen?

“Even if economically that is the way to go, there must always be a human face to economics. So what the government has done is to moderate the reform, and that is why I think the government has insisted that the NNPC should still hold the price at the current level.”

Yusuf noted that the government must balance the gains and side effects of subsidy, stressing that economic hardship may worsen should subsidy be removed 100 per cent.

“All of us who were saying that they should remove the subsidy, we can see that they have partially removed it now, but look at the consequences. Economically it will sound good, but socially and politically it is very costly.

“So those in government need to balance all those considerations. They need to balance economic, political and social considerations. That is why we find ourselves in a situation where we have partial subsidies, both in petrol and electricity,” he stated.

The World Bank had stated in December that subsidy on petrol was still being implemented by the Federal Government, as it insisted that the cost of PMS should not be less than N750/litre if there was no subsidy.

Naira at N988/$

The naira closed at N988.46/$ on the first day of official trading on the Investors and Exporters Window on Tuesday.

This is an 8.97 per cent decline from the N907.11/$ it closed trading on Friday (the last day of official trading for 2023) according to data from the FMDQ Securities Exchange. This continues a worrying trend for the naira which was one of the worst performing currencies of 2023.

According to Bloomberg, the naira had one of its worst years in 2023, a title that 2024 might usurp. It noted that the national currency lost about 55 per cent of its value as of Thursday 28, 2023.

Based on Kyle Chapman, FX markets analyst at London-based Ballinger & Co, the naira was the third worst-performing global currency in 2023 due to a backlog of unsettled forwards, undelivered promises of dollar inflows, and a two-decade peak in inflation.

Chapman said, “The naira’s downward momentum is likely to continue through much of 2024, and its ultimate trajectory will depend on whether the CBN’s rhetoric transforms into concrete policy moves that drive up the flow of US dollars into Nigeria and shore up trust in the official market.

“If the CBN’s promised measures materialise and Tinubu’s government enacts structural changes to increase oil production or to drive foreign investment, there is plenty of opportunity for the naira to lift from its record lows. But a quick fix is unlikely, and further depreciation will come to counteract supply and demand imbalances.”

In its December Nigeria Development Update, the World Bank noted that naira had depreciated against the US dollar by 41 per cent in the official market and by 30 per cent in the parallel market. It noted that the naira needs increased volume to stabilise in the official market.

It said, “Further monetary policy tightening is expected to help underpin the value of the naira. However, there is also a need to increase FX supply in the market. Facilitating FX flows, especially from all exports, through the NAFEM can help provide additional volumes in the official window that can help provide stability.

“In addition, clarity on the CBN’s net reserve position, and on the CBN’s continued progress in clearing the FX backlog, would also strengthen market confidence.”...

https://punchng.com/nnpcl-marketers-clash-over-subsidy-operators-peg-petrol-at-n1200-litre/

Petrol should be N1,500 without subsidy and not N700 with subsidy.

nairalanda1:


The only way you can afford a subsidy, assuming you were president

1.Crude oil production should rise to 40 million barrels of crude a day, with the price remaining above 90 dollars a barrel.

2.Tax to gdp ratio risies to 40% and over 70% of the taxable population was paying tax,

Then you would have the funds to pay for subsidy.

Which is not even possible. OPEC can't give Nigeria such quota.

Nicepoker:
Which is not even possible. OPEC can't give Nigeria such quota.

If OPEC where to give Nigeria such production quota, who will be the one to buy crude provided crude consumption across the world is going down due climate change campaigns, green energies, electric cars, biomass energy and some countries have recently discovered crude which makes them a producer instead of importer as they used be.

Gboss247:
If OPEC where to give Nigeria such production quota, who will be the one to buy crude provided crude consumption across the world is going down due climate change campaigns, green energies, electric cars, biomass energy and some countries have recently discovered crude which makes them a producer instead of importer as they used be.

The glut in supply will even drive it to $20 per barrel.

If Tinubu doesn't know how to
run a national government, he better
resign quietly and go back to Lagos❗️❗️❗️😐😐😐

Kenochi:
What was said in this article is something some of us have always known
The price of Diesel as at December 2023 is over 1,000 while Kerosene and Aviation Fuel are between 700 to 1000+. No one needs to tell you that Petrol is being subsidized,forget whatever comes out from NNPCL
I have always said on some threads that Government needs to find a way to subsidize Diesel, Nigeria is perhaps the only economy in the world that is powered by Generators,it is very funny that this Government is still dilly dialing on what to do with our Electricity challenges
Funny Enough,the article has talked about the solution to reducing prices,once both the Dangote Refinery and Port Harcourt Refinery start operations,it is going to be game over for all this subsidy madness
I seriously encourage this Government to look at the possibility of fully privatising at least two of our Refineries
I don't understand why we need to have four Refineries,sell off two of those scrap metals to people who can run them
As for our Electricity woes,I still believe that Government should stop this National Grid Madness
Let states and Corporate Organizations start producing and distributing power to their citizens.Nothing stops this country from having 36 or more power distribution and generation companies
Who says a company can't generate electricity and sell to just a few customers,this idea that all Power generated must be fed to the National Grid must be critically assessed
Kindly check my signature to get good properties with good titles around the Ibeju Lekki Industrial Hub in Lagos State

which PH and dangote refinery are you expecting to work?

how will their working stop this "subsidy madness"?

When are we going to get it right for once in this country

This president has take the number one position as the ever worse in the history of Nigeria

/
Subsidy removal?

It is all about common sense which I understand may be a crime in Nigeria.

May 2023: Crude oil $65/barrel.
September 2023: Crude oil $93/barrel.
December 2023: Crude oil $78/ barrel

Yet pump price remains steady at N600+ per liter--no wide variations relative to fluctuations in oil prices.

Feel free to believe whatever you want.

/

First you claim to have removed subsidy, yet you continue to play around with subsidy at the background while lying to the citizens.


The year just started, and this tenure has run out of room to lie and hide.

Make we just dey observe all of una.

Nicepoker:
The glut in supply will even drive it to $20 per barrel.

You don't expect a barrel of Bonny light crude with production cost around $30 to be sold at $20 without subsidy because law of demand and supply has limits.

Confused Government

nairalanda1:


At the end of the day, things have to be sold at a profit, no matter what you think.

Answer the man's question.

They want masses to start war and kill them but we won't

Gadafii:
what is this one rambling about
GEJ Removed subsidy Jan 1 2012, tinubu mobilized nationwide protest to have that reverted, the economy abd everything else stood still for a week before it was reverted, so blame tinubu for not allowing it go in 2012

If fue sells at above 1000 like you said, how many companies can sustain operations, without cutting down on staff or production time. You removed subsidy but you haven’t made provision for adequate power supply, that’s insane and myopic

As in ehn really insane and am sure the tilumbuubu didn't think about this problems that is looming now that if they remove subsidy hardship will increase ..

That's why dey didn't prepare for it 😢😭

APC REGIMEN EHN 😢😭