While i support the fuel subsidy removal. I hope necessary measures are being put in place to cushion effect fuel scarcity within the country. The effect and result of this can send the price of petrol as high as about N300 - 400/L based on people hoarding petroleum products so that they can sell at high price.

I hope the regulators understand this problem can happen, and they are putting measures in place to checkmate it.

E ti rin nken nken.Una no go suffer die !

ekt_bear:

OK,

But if it were me stealing oil, I'd just sell the crude myself rather than trying to process it at all. Since you won't be able to compete cost-wise refining oil with a big refinery. . . so better just to steal and sell rather than steal, process and sell.

Anyway you are probably right.

LMAO, chei
bro abeg i beg to agree with yu full time

I don't know about you guys but I've already sent a letter to my senator for Jonathan's impeachment. I can't do much on my own but the little I can I will. This train wreck has to stop. Nigeria's mounting external dept and missing reserves did not miraculously occur, they were products of a very very skewed and degenerate election buy-out plan. Now that it has begun to tell on our economy this fool of a President needs a new money source, NOT TO BETTER THE ECONOMY, BUT TO RATHER MAINTAIN THE EQUILIBRIUM.
Even if they plan to use the money for good, with the same caliber of people in govt as there has always been why would the money not get pilfered? I mean when things where not to hard they stole with gusto, zest and monkey agility, how in the world would any right thinking individual then think they won't steal when things have worsened overnight, I'm off to Ghana.

Naija sufferings have kicked off

Market forces will determine the price

May God help this country.This may not lead to revolution but definitely a quantum leap towards it.This so called savings will not translate in modern rail/road network to the country.It will not translate to a more stable electricity supply.But it will rather bring more pains to the people.The old woman in the village will no longer be able to buy kerosine to lighten her lantern in the evening.Some will turn back to charcoal.You cannt continue to inflict pains on the people forever.This may be the beginning of the entity called Nigeria.

as much as i want to decry this move due to the hardship it will bring to Nigerians,in hindsight,its a very good move,we have to start from somewhere to make things work

ekt_bear:



But if it were me stealing oil, I'd just sell the crude myself rather than trying to process it at all. Since you won't be able to compete cost-wise refining oil with a big refinery. . . so better just to steal and sell rather than steal, process and sell.

Anyway you are probably right.

I beg to differ. On the contrary, for the small scale business man, illegal refining is the way to go.

Cost of PMS = Cost of crude + cost of refining + associated costs like transport.

The reason why international prices of crude are high are not because of the cost of refining. They are high because of the cost of buying crude oil at international prices.

That is why countries like Saudi Arabia and Kuwait have lower prices. They sell their crude for lower prices to themselves and refine it themselves. The cost of exploration and recovery of crude is low in some countries, export pricing is what is high.

If you are a small time business man who wants to make money, puncturing a pipeline and siphoning crude is the easy part. Finding the equipment to transport large quantities of crude to willing buyers is a nightmare. Not just anybody can own an oil tanker (ship) and you can't carry the crude around in Jerry cans. Conversely, if you siphon the crude and process it like "unrattled" suggested, you can then walk around with jerry cans and sell directly to folks or partner with a petrol station to sell your product.

Crude in your hands is useless to a small scale businessman. If you were Otedola and co who owned barges and shipping tankers, that would be a different case.

My point, for the criminal-minded businessman, refining affords you a scalable business model since

using this equation,


Cost of PMS = Cost of crude + cost of refining + associated costs like transport.

Cost of Crude oil is free since you stole it.
Cost of refining may be several naira for each liter.

The difference here is your target market.
If you sell PMS, your market segment is extremely large, if you sell crude, well,  you have a much smaller market segment.

Try standing along the road with a keg or even tanker truck full of crude oil. See what results you get.  
Now do the same with petrol.




Who knows? Next. . . I might do a SWOT analysis.

Ngozi Okonjo with due respect go back to world bank where u r needed most. U have not given anythin to take away almost halv of my salary for transportation alone, so the other half will take care food, house, health, cloths, tripple cost of fuel for generator, etc. This is not fair at all. Like someone said, for being a nigerian it's only fuel subsidy that one get to benefit from govt. we pay rents, foods, water, electricity, health, security, for the roads i use, we pay tax, police fees at check points, still bad roads everywhere. sometime i ask of what use is this govt to people when people fend for themselve all by themselves?
It's hight time all labour unions embarked on strike becos govt hav not put the necessary things in place before removing fuel subsidy.

New year gift,nice one but am afraid because of the likely inflationary effects nd its impact,am also worried that the subsidy savings wouid be shared by all tiers of government nd go into salaries nd corruption not investment. jensimi, gr8 post,u posted wat i was thinking nd wat would occur.gues its time to return home,burst that chevron well nd set up my refinery

All the doubting Thomas es who believe our president can not bite bullets should swallow their pride
We have been made to understand that after rains the sun must shine
--That good life is going to be enjoyed by only those who survive the storm during rains
The PPRA is still saying it has to regulate,
I hope the dudes will not try to hike prices if there is a downward trend
The govt must not wait for wrinkles in peoples faces b4 applying the much talked about palliatives
Labour unions-we will wait & see how you react . However, dont allow haters dictate the tune
Nigeria is for all of us. "Soldier come soldier go but barrack remains".

Hallelujah!!! lets see how the masses would react.
Fingers Crossed

We've just gotta bear it , folks, Get a bicycle or something, Just improvise cos No pain, No gain,
Okonjo-Iweala & Sanusi with their intellect, exposure and strong technocratic background cannot support policies that will not benefit Nigerians economically in the medium-to-long run. Fuel subsidy is not worth dying for.

jonathan u don kill me, dis small mney nysc/mdg gave me dat i shuld use to start a farm, nw u hav increase d cost øf everytin, hw am i going to start nw? Dis govt is evil. Abeg nlc, trade unions lets go on total strike. Dis is bullshit. Not dis time, we must act, senators nd othr politicians ll b takin billions home every mnth while d ordinary pple ll b begin 4 18k. Dis govt tire me o. If d govt need more money dy shuld slash their salaries. even if dats nt enof dy shuld have remove d subsidy gradually. Dis govt is hrtless.

It is too much talk here
Let us get organised and force this nincompoop out
We need action not talk

paddy_lo:

[b]ok lets see. . In the past one yr, the price of crude has gone up,while the local currency the naira has depreciated in value

Yet the price of petrol(PMS) has been held artificially steady at N65.

Ladies and gentlemen this is no way to run an economy

There is no incentive to conserve the use of fuel as prices rise

no incentive to develop alternative sources of Energy,like EVs or SOLAR

Think for a moment if the US Govt came out after the personal computer was invented in 1980 and decided to intervene (and set prices)cause the cost was to high for the masses, there would be no apple,HP,Microsoft and all other IT innovators today that have brought down the price of a pc to commodity status

Again think for a moment,why subsidize fuel?.why not bread,cement, drugs. etc,the whole subsidy game is a slippery slope,that the GOVT best not get involved in.

Cheap fuel is a license to non critical reasoning,thats why the Europeans have huge taxes on fuel,so mass transport can bloom,the environment saved,and alternative energy developed.

Nigerians say they have Crude in their backyard so PMS should be cheap, but can they refine the crude by themselves without importing machines made elsewhere?, can we build a refinery without outside help?,if the answer in no we cant,then we dont deserve cheap fuel.

Let us get innovative for once,build this economy into a knowledge based one,and stop this laziness of the brain and body that we exhibit time after time

so yea am for subsidy removal,perhaps it will clear our cities of okada,and instead have us build trains,trams and subways

perhaps the next great invention like a car that runs on water or air will come from Nigeria. .

who knows. .

Happy new yr!![/b]

Thanks brother. we are all too rigid to make sacrifices and yet we want to move forward as a nation.

its like those nairalanders supporting d removal, dnt stay in nigeria, if u live in nigeria,i guess u r jst fortunate 2 hav a job. u tink everybody can afford dis? u r jst givin us paper talk, d truth is dat dis pdp govt ll nt use d mney 4 any developmnt, r dy nt d same pple in govt for d past 12 yrs,y do u tink dy ll use d mney well dis time. Show me anytin dat is workin in nigeria. No body ll monitor notin, dy r jst inflictin more pains on poor nigerians.

We ran to the north for help, but Boko haram slaughtered us, so we ran to the south for help but ezza and elizo in Ebonyi state dealth with us. Now we ran to our government for our last resort alas! Fuel subsidy has been removed!

the best massage to people who voted him, fresh air indeed, can selfishness nigerian people would voted PDP again, 2015 may be the begining of fresh air,

For a civil servant: same salary, no promotion, prices skyrocket and you want to kill corruption? so what was the rubbish town hall meeting for? do we have honest people to use the money well? what has been put in place to cushion this sudden hike in prices? can this administration be trusted with this enormouse savings? mr president, may God guide you in the right path cos you must give account to God.

jensinmi:

I beg to differ. On the contrary, for the small scale business man, illegal refining is the way to go.

OK, let's see.

Cost of PMS = Cost of crude + cost of refining + associated costs like transport.

Agreed.

The reason why international prices of crude are high are not because of the cost of refining. They are high because of the cost of buying crude oil at international prices.

Agreed (err, I'm interpreting this slightly differently from what you literally wrote.) Thus suggesting most of the profit is in selling the crude, not refining.

That is why countries like Saudi Arabia and Kuwait have lower prices. They sell their crude for lower prices to themselves and refine it themselves. The cost of exploration and recovery of crude is low in some countries, export pricing is what is high.

Agreed.

If you are a small time business man who wants to make money, puncturing a pipeline and siphoning crude is the easy part. Finding the equipment to transport large quantities of crude to willing buyers is a nightmare. Not just anybody can own an oil tanker (ship) and you can't carry the crude around in Jerry cans. Conversely, if you siphon the crude and process it like "unrattled" suggested, you can then walk around with jerry cans and sell directly to folks or partner with a petrol station to sell your product.

Crude in your hands is useless to a small scale businessman. If you were Otedola and co who owned barges and shipping tankers, that would be a different case.

I couldn't load the crude in barrels and sell off to some larger guy who will then deal with the messiness of refining?

A barrel of oil is worth $100. Why bother refining that stolen barrel myself? There is bound to be a guy willing to buy that barrel from me for at least 50 or 60% of the sticker price (or some other large #.)

If I am a small boy with my own gang of bunkerers, is it really easier for me to refine the oil myself than to just find some bigger dude who will then process it?

My point, for the criminal-minded businessman, refining affords you a scalable business model since

using this equation,


Cost of PMS = Cost of crude + cost of refining + associated costs like transport.

Is refining oil really that easy for a small guy though? That is my whole point. . . I don't think it is. It isn't like these gangs are groups of BS/MS level chemists and mechanical engineers. Instead probably mostly semi-illiterates. Even if they manage to refine oil, their processes won't be as efficient (and hence, not as profitable) as the guy with the $8 billion dollar refinery, for example.

And waste = less money made. This is why if it were me in the business, I'd focus purely on stealing oil.

Anyway, you might be right man. I haven't thought a lot about this particular business model, lol

Thank God oo, GEJ has transformed our lives, oo hapy 2012 pakage, e go better e go better, ooo!!!!!I pity dis nation, bleep GEJ

I am amazed at the reasoning capacity of some people here!
Some have said we need "to save money"!
One said the removal will be an incentive to refine it locally, what about the previous price hikes?
Some have said we need to remove the money so we can enjoy "computer like America"!
Some even said that we like free things and the subsidy removal is desirable.
So we need to remove fuel subsidy hike the price of PMS before we can have "critical thinking" or "get innovative"?
Its even very laughable when you hear people say the "price hike" will clear the road of Okada! Does simple common sense not tell you that they will simply transfer the cost to the end-user by simply raising transport cost? Or will people begin to trek long distance?
Arrant and silly rationalizations from immature minds!

Cant these people just REFLECT ONE BIT?
*IBB increased the price of the same PMS a few times during his govt, Tell me what it translated to, in the LIVES OF NIGERIANS?
*OBJ increased the same PMS Price, seven times in Eight Years.
What was the benefit to the average Nigerian? Or was it not the same reason they gave you people?
*DId they build any new refinery [/b]between IBB and Umaru Yar Ardua/Jonathan's  regime?
*If they never kept their word before now (even the more honorable looters, talk-less of a GEJ that allocated =N=5Billion to renovate his wife's NGO office), what makes you think this "Shoeless Liar without any form of shame", will keep his word this time?

[b]Look, l have always said it, if Nigerians allow some thieving fools in government to make life impossible and they take it lying low, then they deserve to suffer till death!
Freedom is never given FREE, you fight for your FREEDOM. Niegrains must BRING this Govt DOWN.
The "Oppressors" will never be satisfied.

All this doomsday talk is just laughable. It will be painful alright but it is far from all this doomsday rant here on NL. Many parts of Nigeria, especially the south east, has had to pay between N100 to N150 per litre before for a months and hell didnt break loose. I want subsidy, but I dont want subsidy on consumer products. I want subsidy on production facilities. That is the right kind of subsidy.  We should advocate the following

1. A national database. This is one of our biggest problems in Nigeria. The reason banks will not give loans to upstart companies is majorly because there is no national database. I speak from experience. Why would you give someone a loan when you cannot verify his real status and location.
2. We need a full and immediately deregulation of the power sector. I have personally written to the president through his Facebook page and I hope he gets my message. Deregulate power now!
3. We need to encourage small scale industries. People keep talking about labor. What percentage of Nigerians actually work for the government? Very insignificant. The much larger part of the people work in the private sector. That is why it is wrong that government over the years have made too many policies with labor in mind when they form a very small part of Nigeria. That is one reason I hardly support labor strike. I will only support strikes that solve issues bothering majority of Nigerians.

Mikeansy,

You have said it all. Jonathan has created another account for the treasury looters to go on looting spree. What makes you think the money saved will ever come back to the people.

A Fed Govt that could not commission single pedestrian bridge. Babangida in all his Atrocities commissioned the 3rd mainland bridge. What has this administration done for the people?

Just to flex muscle on the ownership of Federal roads in Lagos. This is the worst we've ever had.

Hissssssssssed!

lastpage:

I am amazed at the reasoning capacity of some people here!
Some have said we need "to save money"!
One said the removal will be an incentive to refine it locally, what about the previous price hikes?
Some have said we need to remove the money so we can enjoy "computer like America"!
Some even said that we like free things and the subsidy removal is desirable.
So we need to remove fuel subsidy hike the price of PMS before we can have "critical thinking" or "get innovative"?
Its even very laughable when you hear people say the "price hike" will clear the road of Okada! Does simple common sense not tell you that they will simply transfer the cost to the end-user by simply raising transport cost? Or will people begin to trek long distance?
Arrant and silly rationalizations from immature minds!

Cant these people just REFLECT ONE BIT?
*IBB increased the price of the same PMS a few times during his govt, Tell me what it translated to, in the LIVES OF NIGERIANS?
*OBJ increased the same PMS Price, seven times in Eight Years.
What was the benefit to the average Nigerian? Or was it not the same reason they gave you people?
*DId they build any new refinery [/b]between IBB and Umaru Yar Ardua/Jonathan's  regime?
*If they never kept their word before now (even the more honorable looters, talk-less of a GEJ that allocated =N=5Billion to renovate his wife's NGO office), what makes you think this "Shoeless Liar without any form of shame", will keep his word this time?

[b]Look, l have always said it, if Nigerians allow some thieving fools in government to make life impossible and they take it lying low, then they deserve to suffer till death!
Freedom is never given FREE, you fight for your FREEDOM. Niegrains must BRING this Govt DOWN.
The "Oppressors" will never be satisfied.

What is thieving in someone telling you, you have to pay for what you used and he doesnt want to pay for you anymore? Was it government that gave birth to you? Stopping subsidy is not the same thing as stealing your money my friend. Moreover, it is not about saving money. It is about not spending more than you earn. Nigerian spends more than she earns by subsidizing. We cannot afford it anymore.

But the final solution though is split the country. We have a 36 state country where only about six states take care of the rest. That is a very very bad way of doing business. And the six states are among the smallest states. Imagine states like kano with 40 local governments yet they add nothing to the federation. How can we continue to live like this.

swezenberg:

Mikeansy,

You have said it all. Jonathan has created another account for the treasury looters to go on looting spree. What makes you think the money saved will ever come back to the people.

A Fed Govt that could not commission single pedestrian bridge. Babangida in all his Atrocities commissioned the 3rd mainland bridge. What has this administration done for the people?

Just to flex muscle on the ownership of Federal roads in Lagos. This is the worst we've ever had.

Hissssssssssed!

In your anger, which I fully understand, you have made a few missteps. 3rd mainland bridge was a project spanning more than 9 years. It was started long before Babangida's time. If Jonathan wanted to loot money, he would have simply stayed with fuel subsidy. It is easier to connive with fuel importers to steal money than to let it remain in the Nigerian government system, not to talk of all the pressures the whole episode has put him thru. He has actually made a much more difficult decision

dmainboss:

What is thieving in someone telling you, you have to pay for what you used and he doesnt want to pay for you anymore? Was is government that gave birth to you? Stopping subsidy is not the same thing as stealing your money my friend. Moreover, it is not about saving money. It is about not spending more than you earn. Nigerian spends more than she earn by subsidizing. We cannot afford it anymore.

But the final solution though is split the country. We have a 36 state country where only about six states take care of the rest. That is very very bad way of doing business. And the six states are among the smallest states. Imagine states like kano with 40 local governments yet they add nothing to the federation. How can we continue to live like this.

^^^^^^^^^^^ do you trust this government that much? With all the lies about Bokoharam, to constant power etc

Hmmm, I see it coming! I think this a step in the right direction, I forsee a time when filling stations will practically woo you to buy fuel from them, maybe free tyre service or carwash! Afterall, mtn dash you sim card today and add free credit to you! Patience I urge you all!