₦airaland Forum

Freksy:
This thing is a scam - well organised.

Each time they want to hike the price of fuel, as a means of extorting money from the poor masses to run the corrupt system, they deceive us with this subsidy thing.

Nigeria is broke! Totally broke! They need money by all means. In the coming months or years they will use the same formula to extort money from the poor citizens. They will say it was partially removed.

You can't truly deregulate and still continue to fix the price of PMS - that's regulation.

I assume they are fixing price of their own product. Dangote will also announce his own ex depot price when his refinery starts operation. And any other importer can fix own price

ManirBK:
https://dailytrust.com/tinubus-wife-steps-into-first-ladys-office/?utm_medium=Social&utm_source=Facebook&fbclid

There is no office if the first lady

princeade86:
tell me the day nlc ever mentioned or fight for private sectors workers.

Nlc is made up of multiple lower level trade sector unions, many of which are private sector dominated like oil and gas, telecoms, electricity, etc

skj1377:
Your kind of thinking is what got us to this mess. The crude belongs to Nigeria as such Nigerians don't have to buy it at international price. The actual cost of extracting crude can't be more than $8 while the cost of refining the crude and profit per liter is $0.023 . In other words a litre of fuel in Nigeria should be N20. The reason cost of petrol is this expensive is because of the exchange rate N460 . At an exchange rate of N127 petrol will be much cheaper. The question is why is our exchange rate so poor and the answer is because we use 70% to import fuel in dollars there by leading to a scarcity of the remaining dollars to meet other importer requirements @N460. This lead to a harmonious price of N745 as a balance between the demand and supply . So N550 is still not a final price of petrol as NNPC is the sole importer because the marketers will have to source the dollar at @N745 which unfortunately is the price dollar is available . At such an exchange rate petrol will be N1100 per liter. Don't forget with each request to import at N745 the Naira keeps loosing value something like this N745, N780, N850, N950, N1000............etc the reason for that is also because Nigeria is import dependent and NNPC is the largest foreign exchange earner. The solution to all this is to fabricate local refinaries and produce the petrol locally while exporting extra refined products to earn additional foreign exchange. If we do this the Naira will appreciate to say N80 to $ . Local fabrication means 90% of the maintenance cost will be in Naira so no need to look for dollar for that.

Cost of finding, developing and producing crude oil in Nigeria is about $30 to $40

nairalanda1:
1.Qatar produces 1.8 million barrels of crude a day and shares it among 1.2 million people.

2. UAE produces 2.2 million barrels of crude a day and shares it among 15 million people.

3.Saudi produces 10 million barrels of crude a day and shares it among 40 million people.

4.Nigeria...produces 1.8million barrels of crude a day and shares it (the revenue from the oil) among 220 MILLION people.

We produce the same amount of crude as Qatar and have to share it among .......200 times the population.

That's why we are poor. The per capita oil wealth is too low to make us a rich nation....which is why we got to diversify this economy self.

We haven’t even done 1.8mln in like 4 years now, since Covid.

princeade86:
people are just shouting they should increase salary as if people working under government are up to 40% compare to people working under private sectors. If they increase salaries of government workers, what will be d faith of people working for private sectors that don't have anybody to fight for them for minimum wages. I think government should also have an organization that will be monitoring these private company. Some of them are wicked and heartless to pay peanut salaries to their staff, and still over used them. Some of them will even owe them salaries and if u report to police, they may turn the case on u if they bribe the police. Nigeria needs total reform on private sectors also.

Did they tell you NLC is labour union of government workers alone?

talk2hb1:
Are They Serious, if they piped every house in Nigeria and supply us with free gas, we will still have enough gas to export. Yet they are acting as if they are doing us favor.

All these Nigerians that think governments exist to give you free stuff!

obyno82:
Once again you are not smart. Dangote actually dictates the price of cement because by his monopoly he is the market driver of cement. That is the point, Lafarge and BUA are content with the margins they make and as such will not want to enter a price war that they will certainly lose in. Try and be smart bro

Dangote has market leadership in cement, but NOT A MONOPOLY! Same as Mtn in telecoms has market leadership, Transcorp Hilton has in hotels in Abuja, etc. Every market leader dictates price movements to some extent everywhere in the world. It's normal.

BOUNTYDOG:
He may have a point
When lafarge BUA et al were competing with him
He slashed the price of cement down to 1k sometin,the competitors wonders how Damgote makes his profit as dey were selling at loss
So dey had to leave the market for him, after they left je hijacked the price back

Dangote is just a business man working for Nigeriàn govt
They invest for him and make sure every decision favors him

Beer parlour gist. Lafarge has been in this country since the 70's with their Ewekoro plant. Yet they never thought to invest in a new plant.

When Dangote came with Obajana, because it was brand new technology, it was so much more efficient that it's costs were lower than Lafarge by far.

Eventually, Lafarge had to abandon the old plant at Ewekoro and build brand new one. Of course by then Dangote had built like two more hence the market leadership. Lafarge could have been the market leader if they believed in Nigeria like Dangote did. Besides there is now BUA as well, so Dangote has no monopoly in cement.

prophetfire:
Already commissioned modular refineries in Nigeria? Commissioned and they aren't producing to make serious money from a hot cake that is in very huge demand like PMS?

They aren't big enough to even make a dent. If I recall correctly Waltersmith capacity is 5000barrels

OfoIgbo:
Answer my question. Are those modular refineries licensed by Buhari operational?

The answer is a deafening NO. So why remove subsidy when this critical game changer is not yet in place?

Obi is head and shoulders better than Tinubu as an administrator.

I think Waltersmith and one in Edo state are operational

OfoIgbo:
Peter Obi additionally proposed granting licences to modular refineries. That would have been a game changer as
1. They will be operating in naira
2. The fact that there will be a number of them will automatically guarantee competition with the resultant low price of fuel, perhaps even around the N100 per litre level or less

Even if they operate in Naira, it doesn't make then price of petrol from modular refinery cheap. If crude is $75 internationally, but a modular refinery bought it for $75*750=N56k, what has changed?

Besides product from modular refinery might well be more expensive as they won't have economies of scale.
Your number two point is wishful thinking because they will have to buy the crude. Petrol is not a sector where competition brings down prices dramatically because everybody's cost is almost the same, marginal cost of production is high and margins are tight.

fergie001:
Osimhen, daughter & baby mama

If he doesn't win African Footballer of the Year, then.....!

wirinet:
Don't mind them, we have been removing subsidy since the 80s and each time inflation will rise, naira will fall and we will start discussing subsidy once again.

Abeg helep me ask Subsidy removal proponents how Abacha was able to do it despite all the corruption allegedly uncovered in his administration. Abacha increased petrol prices from N11 to N14 and gave the extra N3 to Buhari's PTF for infrastructure like roads, university buildings, etc. Till today we could see those infrastructure.please remember Abacha did not even borrow $1 from anyone despite crude prices never going beyong $16 per barrel, at a time it fell as low a $8.
Abacha must have been a miracle worker.

Bros, we have never removed subsidy. We increased the prices from time to time to reduce subsidy, but never removed it.

Besides you are talking almost 30years ago. The state of the Nigerian and global economies of 30years ago and now is not the same. $16 in 1997 has purchasing power of about $30 today.

Nigerias population has almost doubled in that time, consisting of mostly young people who will buy cars and generators. Think back to the military era, how many people had generators back then. It was quite a big deal for those who had. Now almost everybody has. Even those in batcha have I pass my neighbour. Also back then this okada craze wasn’t a thing. Now there are probably like 5million bikes in the country. So it’s reasonable to see Nigerias petrol consumption increasing dramatically between then and now.

Check the price of a new Camry is US in 1997 and in 2023 and tells me if it’s the same. Not to talk of here, where we have to factor devaluation into the equation again.

wirinet:
I know you don't understand. You are probably a member of the big three tribes (well two) that enjoy the present Nigerian arrangement, where crude oil is situated in the Niger delta but enjoyed mainly by the north and south west.
Let me break it down for you. Over 90% of Nigeria's revenue (meaning money used to run the government is obtained from sale of crude). Now over 70% of this crude is gotten from the Niger Delta. These are Nigerdeltan whose land is seized by the Nigerian state and then sold to multinational foreign companies and their Nigerian cronies. The people who owned the land lose all rights to the lands. The government just settle a few chiefs, elders and youths and the do as they like. That's the same model the colonial powers used to exploit and subjugate natives. Now that's a digression that's a whole chapter on its own.

Now back to subsidy. What we the Nigerdeltans are saying is that we have crude under our feet. We agree that we submit that crude to the Nigerian state for the common good. But what do we get in return, outside pollution, civil strife and neglect? Ordinary to buy petrol gotten from crude from our lands, you are telling us to buy at international price. Boys bust pipeline or oil wells and start selling the crude themselves, you arrest them and brand them thieves. Meanwhile the political elites are stealing the oil in supertankers.

Now let me brake it down further. The cost of refining Nigeria's crude is about $30 per barrel after removing all production costs. So even if price of crude internationally is $100, the remaining is still profit. Why should I an itsekiri man or an ijaw man be buying petrol produced with crude at $100 per barrel? Is it the government subsidizing me or me subsidizing the government at a crude price above $30 per barrel.

If you say subsidy is not sustainable, how then was Obasanjo able to sustain subsidy and at the same time pay up all our debt, hosted two huge international events and still left over $40 billion in our external reserves for Yaradua?

Once again, we are subsidizing corruption and not fuel.

A lot of what you have said here which you think is correct and makes you smart and knowledgeable is actually wrong. Let me debunk them one by one.

90% of Nigerias revenue does not come from oil. It’s 90% of foreign exchange that comes from oil. Oil revenues currently make up about 60% of Nigeria’s revenue.

I can’t speak to every land in the niger delta but for the oil company I am very,very familiar with, there are land rents paid to the communities on whose lands the oil facilities are. Of course an oil company cannot deal with every individual in a community one by one. However if the chiefs and traditional rulers are scamming their own people, there is not a lot that oil companies can do about that.

I can’t argue whether cost of refining a barrel is $30 or not. But I do know for a fact that depending on the oil company and the terrain, unit development cost of a barrel of oil could be anywhere from $10 to $30 (that’s the cost of exploring for the oil, appraising the find if any and the developing the infrastructure to produce it). Remember that you might spend $50mln for an exploratory well and find nothing. Then you come to unit operating cost (that’s salaries, admin, production expenses, indirect taxes, nddc fees, host community fees, finance, security, legal, hse etc). Again depending on the company and terrain, it ranges from $10 to $30 per barrel. If you take the upper limit of those plus your refining cost, that comes to $90 per barrel ba?

On Obasanjos time, there are lots of actors at play, oil production level then vs now, oil price then vs now, volume of cars on the roads then vs now, population then vs now.

Obasanjo was President at a time just after military rule. How many people could afford cars back then. There is no doubt that middle class really boomed in obasanjos era and so many young people bought cars for the first time in that era when banks were really expanding rapidly and employing as well and the gsm companies.

There is a lot of difference between 2.2million barrels a day of that era and 1.3 million barrels of today. That 900k difference is more than some countries total production that they survive on like Gabon, Algeria, Ghana, Equatorial Guinea etc

Of course corruption is probably much worse in Jonathan and Buhari era compared to Obasanjo era.

Luckylife:
Go study the advantages of capitalism in a corrupt government. The burden are usually bored by the innocent citizens . I doubt you comprehend the full points a made here, check the percentage of blames I gave the government and that of marketers! Ok let me give another point you didn't consider before replying, the masses are at the mercy of marketers who decides the profit margins on their products. I learnt that some where in Ebony State PMS were sold at the rate of ₦1000 to ₦1200 . Are you justify this particular marketer with your above points?

Except that filling station was in a remote party of town, otherwise why would a rational person buy there if NNPC station are selling for N530? I'd be happy to drive 20km to NNPC station to buy at N530 than the N1000.

The laws of demand and supply will quickly sort that out. Within a week when no one buys his N1000 petrol he will reduce the price.

DaddyCoool:
You are confusing yourself.
Here's an anology that won't confuse you:
Say your poor mammy went to the market to sell 2 chickens she bought for N20 each hoping to make a N5 profit. But on getting to the market she found chicken was now N1M.
So she sold and made a profit of almost 2milion - automatically making her the richest person in the village.
The fact that she has to go back to buy chicken at N1M for resale, will that in ANY WAY change the fact that she is now the richest person in town??
Mumu!

Clearly we are arguing two different things. You seem fixated on the one off event of an exceptional gain, while I am focused on the going concern of a business. Cheers.

Kukutenla:
As a government, is it responsible to allow your citizens to be exploited by a thieving oil cabal?

Which thieving oil cabal exactly? I think too often we like to cloud simple issues by linking then to an unseen cabal. Last I heard is that NNPC has been the only importer of petrol in the Buhari regime. The cabal of various importers was in the Jonathan/Diezani era.

Cabal is why petrol subsidy isn't working
Generator cabal is why we don't have electricity.

Meanwhile in those two sectors, the real issue is we are selling product below the cost of production. In other sectors where there is zero government intervention ND prices are set based on market dynamics like GSM, hotels, event center, diesel, airlines, clothes etc why is there no cabal there?


We buy petrol at say N450 per litre then we come and sell at N185per litre, making huge losses on purpose. Now it might actually be good if we were spending this from our actual earning, but no, we actually borrow to even do this. That's how precarious our finances are as a country.
Yes there is misappropriation of funds in this country, but also how many people pay proper taxes. I can bet you 90% of people on this forum have some hidden income they don't pay any tax on.

APCNig:
Anyone can be sick. Buhari was sick for several months, now he is younger than he was 30 years ago.

Only God gives and takes life

What point exactly are you making?

DaddyCoool:
What has new product got to do with the profit they ALREADY made?? How u folks reason eh. Someone made N1B on a trade he just completed, he can decide to do WHATEVER he wishes with the money. Is there any law that says he must buy new product or what amount? It is his money. Full stop!

Does he exist just to make a one off profit and then retire for ever? Won't the business continue? Won't he require cash to buy again. This your lack of understanding off accounting concepts like solvency, liquidity, working capital etc is why many businesses in Nigeria die quickly.

If I sell to everybody on credit, technically I'm profitable, but if I then can't pay someone else I am owing because my money is tied up with other people, I can be sued and declared bankrupt and my busines wound up.

That's the difference between cash flow and profitability for you!

DaddyCoool:
Nobody can be this mumu. Let me simplify it for you:

We bought at N3, we were selling at 4 but now we are suddenly selling same at 10, tripling our profit. That's money in the bank! If we decide to continue after selling out, we'd be like any other person just entering the market - we'd buy at the new price of 8 and sell at 10! How does that affect the profit we made when we bought at 3 and sold at 10??!!

Maybe you are a bit of a mumu too!

The point that is being made is that if the guy refused to increase his price and sold at N4 on the basis of not cashing out as you people call it, where would the N8 to buy new stock even come from, if the guy has only N4 in the bank after selling his old stock?

There is a difference between solvency and profitability. And solvency is actually more important. Because unless you can pay your bills, you may not even stay in business long enough to make profit.

richidinho:
Stop supporting rubbish

Government all over the world are subsidizing basic needs of the people

China provides world record subsidy on cotton for its people

USA subsidize oil, Agriculture, housing, automobiles and health care

What are our govt subsidizing for its people, nothing

The only product you are subsidizing is what you want to remove because you simply have no idea on how to tackle the corruption that has engulf the policy?

If you cant, abeg step down..we have people that can sanitize the system and bring normalcy

Please explain how USA subsidizes housing, autos and healthcare. Cos I know for a fact that healthcare in the US is among the most expensive in the world. If you call ambulance to your house alone, expect bill of like $2k.

datola:
Hmm... Mr Kperogi.

Nigeria cannot survive further subsidy payment. America is 1,000 richer than Nigeria and can afford to subsidize

The issue of fixing refineries does not even profer any solution because it will still be sold at market price. And can those refineries ever work again after sinking billions every year in year out.

If I were them FG I would sell off the refineries at any amount offered than be spending so much on it for decades without any positive results.

Are you minding him? The budget of the state of Texas alone is higher than Nigeria's FG, State and local government combined!!

What America or a western country can afford is very different from what we can afford.

KingKO22:
Good

At worst petrol should not be more than 450 in Nigeria

No matter how bad international market is

So if crude prices go up to $120 n ko?

Eecho:
No, you are the worst thing that happened to your father . You are so daft , you don’t know fuel controls the price and supply of almost all commodities, you don’t know subsidizing fuel is the only benefit an ordinary Nigerian will get from his/her corrupt Politicians that will still loot the money saved from not subsidize fuel . Empty heads littering Nairaland.

So we should continue borrowing and end up bankrupting this country for subsidy abi? When Zimbabwe type inflation comes our way, you will still say they didn't manage the economy well.

Nigeria is more or less broke! Do you know what it means for interest payment on debt to be 96% of revenue!!? We are not paying principal o. Just interest. Can you run your personal life like that?

gr8child:
My understanding is that govt. was borrowing to pay for subsidy. If that is the case, it's not like money is being saved, they are just trying to stop the debt from growing. They will still need to keep servicing the existing debt, the cost of which has now apparently exceeded the country's revenue.

Spot on. That's what most people don't realize. There is no savings from subsidy removal to be spent on other things.

Oladeji245:
Yet the tinubu you are licking his ass today was once against it,writing useless articles and granting interviews up and down despite the fact that the government of that time even made provisions for palliatives just for his own personal ambitions and interest.
How do people who earn 30k or even slightly above survive when prices of things which is already beyond expensive skyrocket to another level without palliatives from the government.
Your position do not even surprise me cos you’re a famous tribalist here and normally tinubu supporters no Dey get sense.

He was against it for political advancement reasons. If you ever thought it was for you or the masses then I laugh.

Hoelujohn:
So any filling station can fix whatever price they want to? Even if it's 1k per litre? You need mental evaluation

Stop being dramatic. If NNPC own is N512 and oil marketer is N1000, would anyone buy it?

Diesle inflation has done more damage to Nigerians than petrol will ever do. Food increasing like 3x in past year is mainly due to diesel increase from N150 to N800 in the past year because heavy duty haulage trucks use diesel not petrol.

Agreed this will cause local transport fares of individuals to increase, but instead what labour should be fighting for is a salary top up line specifically for increased transport for workers of say N10k and general inflation top up of another N20k for lowest workers. Private sector should also be encouraged to do similar top ups for their staff.

Left to me we have too many staff in government anyway. Too unproductive! For me I'd relieve like 30% of civil servants of their jobs.

And beyond this we all need to be more creative how we move around. Despite this petrol increase you won't fail to see our women packing themselves in bus, going for one party or burial somewhere. If it's too expensive, stay at home instead of unnecessary trips.

Wambiz:
The newly Inaugurated President just announced removal of subsidy and boom oil marketers have started selling at exorbitant prices
Aren't we the problems of ourselves 😔

But if a policy is announced today why the fuss when stakeholders implement it the following day?

There is a lot of pain about marketers selling at exorbitant Gian. But isn't it money they are going to use to buy the next stock as well?

If their new stock will cost them 3 times to buy, where will the money come from. And even if they make gain now, she it's only once they will make it.

How does their one off gain effect Nigerians who will be buying petrol for N600 for the foreseeable future.

The only issue I have is with them hoarding it and making it hard for Nigerians. But if a pump price has been adjusted to a deregulated price and I can drive in freely and buy it, I have no business with the marketers supposed gain. Cos if the pre deregulated petrol was bought at N10mln for a tanker, it will cost him N30mln for the next tanker.

Basic123:
WIKE actually performed well.


Not supporting one anambra failed former governor for president can not erase that fact.





WIKE IS A LEGEND!

By only doing Pleasure park and flyovers?

I lived in PH from 2006 to 2017 and in my view Rotimi Amaechi set the foundation for Port Harcourt of today. Amaechi dulised like 15 key roads that improved flow of traffic such as;

Old Aba Road
Stadium Road
Trans Amadi Road
IKwere Road
Rumuola Road
Rumuimasi Road
Slaughter/Woji Road
NTA Mbuogba road
The road that passes by Airforce Base.
The one that goes to airport
Rumukwurushi road
Peter Odili road.

He also left behind a legacy of well designed and built schools, which Wike turned upside down.

Amaechi also did an IPP if I remember correctly in Trans Madi.

He also had plans for the new city to be managed separately by RIVGIS, which again Wike turned upside down.

The only key thing Amaechi messed up with is the Rivers Monorail. A. Monumental waste.

lexy2014:
Did you understand the questions I asked?

How does the fact that "None of the three frontline candidates in the last election meant to keep PMS subsidy", justify the removal of subsidy?

Can you tell me how much percentage of the subsidy has government been paying all this while?

Previous govts have at inevtime or the other removed subsidy. How much percentage was removed from the subsidy and how much was left to be removed?

What is the percentage of subsidy has been finally removed?

Subsidy has never been removed. The petrol price had been increased from time to time in the past to reduce the amount of subsidy we were paying, but it was never totally removed. If subsidy had been totally removed it should have been sold at the market rate and not a fixed price ie different filling stations would have slightly different prices the way diesel is

43Ronin:
you asked the right question. many of the fools littering the tread with fuel will be sold at international prices so it would not be cheap are just APC paid senseless goons. Subsidy is given to importers of fuel. it covers their shipping and landing cost.... and the shipping and landing cost accounts for about 70% of the price of the petrol when it get to nigeria. Now if we had enough refineries, there would be no need to pay shipping cost cos we are not carrying our crude anywhere to refine. so fueling as a by-product of crude would be very cheap in Nigeria. Now those saying fuel will still be expensive even with all the refineries because nnpc will sell crude oil at international prices are liars and govt sponsored officials because why ournown thing go costly for us?. look at this example - one small tuber of naija Yam is sold in some stores in yankee from $4-$6, since that is the international price of a tuber of yam why are we not buying a tuber of yam for 4k or 6k in naija? tha is because we don't need to pay custom duties, landing cost because na for our yard e dey grow same with fuel. They are only pushing the fuel will still be expensive narrative cos they want to make dangote a Monopoly in the market so that they can also loot....

Your statement about shipping and landing cost being 70% of the price of petrol we pay locally is blatantly false!! I don't know what it is, but I know it can't be 70%. If I were to hazard a guess, I'd say it can't be more than 10 to 15%.

To ship a car to Nigeria from US is not more than $2k, yet the car might cost $20k.

And your analogy using yam is faulty. Yam is expensive in US because it's not freely imported into America. On my last 2 trips to Yankee in Dec 2022 and March 2023, I took yam both times and it was seized both times because of risk of importing pests into America. And it doesn't seem like many people grow it in sufficient quantities in America and only west Africans eat it, so maybe demand is not big enough to warrant local farming of yam.