₦airaland Forum

PhockPhockMan:
I hate discussing issues with little kids like you, I've been living at Port Harcourt main town since after my graduation in 1992, that's 23 years ago. Check my profile picture.
I don't know what you Mean by conqueror , are you a cultist?

Please esplain futher, I do not understand this question.

I will put an answer, tell me if this helps

1. Because the sector is not fully deregulated. The money these marketers get from PMS, they can afford to sell diesel to you at any price. You are lucky. If the sector is fully deregulated, you may buy diesel at 180 Naira per liter

4. I also believe the reason why diesel was scarce last week is because marketers refused to lift. diesel boggle everywhere

TheGoodJoe:
I saw the caption of the Federal Government telling marketers not to sell above N87 and I laughed. These are the same people that want the same marketers to control the market.

The same marketers GEJ said scammed him.

ohzee:
[/color]

1. How many time do you want me to tell you the reason they refused to load? Can someone in this forum tell this guy the read my comments. Mr, have you read the reasons I gave you.

2. If you can't understand me or read my comments, why should I keep posting. I will do others a favor to give post my proposed solution to price fixing is to pass laws punishing severely price fixing. If you work for an American company and you are caught sharing information and trade secrets to your competitor, it is instant dismissal. No room for cartels in the eyes of the law. The marketers should collect loan and stock their AGO in the tanks. If they don't sell, they should keep it. We will buy from Togo. Our planes will fly to Ghana to refuel.
Prominent Price Fixing Examples
Air Travel

In August 2007 British Airways was fined £121.5 million for price fixing. The fine was imposed after BA admitted to the price fixing of fuel surcharges on long haul flights . The allegation first came to light in 2006 when Virgin Atlantic reported the events to the authorities after it found staff members from BA and Virgin Atlantic were colluding. Virgin Atlantic has since been granted immunity by both the Office of Fair Trading and the United States Department of Justice who have been investigating the allegations since June 2006. The US Department of Justice later announced that it would fine British Airways $300 million (£148 million) for price fixing. BA maintained that fuel surcharges were "a legitimate way of recovering costs. "

Beer

In April 2007 the European commission fined Heineken €219.3m, Grolsch €31.65m and Bavaria €22.85m for operating a price fixing cartel in Holland, totalling €273.7m (InBev, another brewer, was convicted for price fixing but escaped punishment) . The brewers controlled 80% of the Dutch market, with Heineken claiming 50% and the two others 15% each. Neelie Kroes said she was "very disappointed" that the collusion took place at the very highest (boardroom) level. She added, Heineken, Grolsch, InBev and Bavaria tried to cover their tracks by using code names and abbreviations for secret meetings to carve up the market for beer sold to supermarkets, hotels, restaurants and cafes. The price fixing extended to cheaper own-brand labels and rebates for bars.



Source: Boundless. “Price Fixing.” Boundless Marketing. Boundless, 14 Nov. 2014.

To be honest, I am tired of your post. It's a big shame you do not know the effects of a devalued Naira. 18000 Naira today is less than 18000 minimum wage is this time last year. It has lost its value by 25%. It means if you continue to put subsidy on your budget, you will of course continue to run deficit, which will in turn weaken your currency, and then further reduce your 18000. So who loses, the masses.

You seems to be a marketer or paid agents, that why you are hell bent on distorting reality. Don't mortgage people's children's life because of the fraud subsidy. It must go.

Lastly, if you think we are incapable of running a free market in Nigeria, especially in the oil sector like every other countries (95% countries) the Nigerian spirit will prove you wrong.

gohome:
1. The Nigerian solution is to get rid of subsidies on PMS.

2. I have also told you why AGO was scarce. Can't you read?

3. They won't give you candies or pepper if your government learn how to regulate a free market

TheGoodJoe:
I saw the caption of the Federal Government telling marketers not to sell above N87 and I laughed. This are the same people that want the same marketers to control the market.

The same marketers GEJ said scammed him.

OK noted. Let me believe that what I wrote was misinformation. However I am still curious. Can you explain why a marketer will import AGO that has much less demand and no subsidy payment instead of using his capital to import PMS? If the demand for AGO is high like PMS and you have a deregulated market open to all investors including refiners, do you think they can still gang up and form a cabal and fix the price? I believe some

investors will rather take their chances and sell lower than the cabal to increase their turnover.
A

gain I stand to be corrected. These are my thoughts. In Enugu where PMS price is not fixed, you choose where to buy petrol and at whatever price you can afford. The marketers have never been able to fix the price. Sometimes a few have been known to sell at 64.50; when the price was 65 to attract customers. JUHEL in New Haven had done that in the past.

gohome:
Please be more civil.

Stop being scared. It is better we are at the mercy of them and learn how to checkmate capitalism excesses in a free market than still be on thier mercy right now. No country ready to progress will pay subsidy on Imported PMS. Subsidy is not a bad word. It should be done in other places (Transport, Agriculture, Education) Not Imported PMS.

Like someone said, Imported fuel accounts largely for why the Naira is so weak, that hurts your purse 10 times more than removing the present subsidy will. As it is, remove or no remove only those involved in the scheme/scam wins! The only difference will be an accountable leader will have more money to work (Build Infrastructure)

ohzee:
Actually they can import more. They currently rent tank farms to do so. The problem is that they are unbelievably corrupt. But then maybe the fear of GMB will help. The point is that there should be an alternative to private importers to force down their prices.

Renting tank farms means they do not have enough storage capacity, who pays the rent for the farms It is still part of the over bloated subsidy, if the market is deregulated, will the rent disappear? NO, but the Nigerian people will have to pay for the inefficiency of NNPC.
You just confirmed that NNPC lacks the capacity to import reason the cabal is doing that JOB.
Storage goes with import, if you cannot store, you cannot import enough, so they refine a little, import a little and leave the rest for the cabal.

ohzee:
Nairaland is a forum where people air their views on issues after thinking them through with facts at their disposal. So I am not sticking my mouth anywhere. I believe I have a right to state my opinion freely. I have gone through your posts and they sound very angry. Let us learn from you. Even if we don't agree with you or you with me, we will all improve our knowledge. Thanks

gohome:
you are also making me repeat myself. Pray tell me why AGO is not scarce in Togo, Chad, USA KENYA etc. You owed the markerters and they showed you pepper. Also pray tell while the annihilation of the middle class has not occured in 90% of the countries. They have devalued your Naira, what it means is that any money you have now (savings) has been reduced by 10 percent. Your expenditures have also been increased by 10%. It means you are actually buying your so called subsidized PMS for 10% extra. Annihilation of the middle class has not occured.

Stop the delusion that government can not regulate a free market. Its a communist mentality.

ohzee:
Actually they can import more. They currently rent tank farms to do so. The problem is that they are unbelievably corrupt. But then maybe the fear of GMB will help. The point is that there should be an alternative to private importers to force down their prices.

ohzee:
AGO prices are high because there is more to gain from importing PMS most marketers don't bother to import AGO because there is no free lunch there.

ohzee:
Subsidy is a fraud. In the days of essential commodity, the same thing happened. Fix prices and you simply create artificial scarcity. It will be tough for Nigerians but NNPC should increase their importation capacity in the short term. Flood the market with products and watch prices come down

If NNPC had the "importation capacity" let me borrow your phrase, why do we need the cabal?
When the cabal is holding us to ransom, why does the NNPC not bail us out? well, you conveniently forgot that NNPC workers are union members too aka Cabals

gohome:
Again, please be more civil, it will help us all aprreciate your line of thought. If the so cabal are allowed to sell at 1.1 dollar per litre they wont hoard. PMS is not cheap let us deal with it. AGO is deregulated in 90% of the countries, but not scarce, why should it be scarce in Nigeria?

tunene66:
in simply terms to me subsidy is ensuring that the price of a good or service is below the actual cost price-in other words, there is a loss. No concerning the Nigerian situation, the crude oil is sold in the international market at ruling price. Its based on this that the Federal Government bases its budget. So the crude is sold and we import, like any other country, refined oil at international price, together with it attendant cost of transportation, insurance and landing charges. These no doubt makes the cost of refined oil higher than crude (since value has been added). Now the Govt. arbitrarily fixes the refined oil (PMS) price. So the differential is called Subsidy

Well the counter argument is that ideally, the budget of Nigeria should be based on crude oil that is sold to external customers. The crude oil that is to be used eventually in the country should be sold at local cost of production price to refineries who will the send it back at a reduced price. States and LGAs will kick because it will mean reduced revenue, no wonder they wand an Accountant General of the Federal Republic

So to me there is subsidy but its being mismanaged because our monitoring agencies have been corrupt

The way out.....

kinibigdeal:
Your comment are too loopsided. The fact that you said you were against it in 2012 due to your unfounded fact speaks alot about your personality and you supporting it now enapse my conclusion. The protest against subsidy in 2012 was highly political and not for the interest of the nation, the calculation was to render this present administration ungovernable in lieu of their interest in 2015 which really work for them perfectly. Majority of the policy GEJ administration had then was strongly opposed through press and whatever platform because of their political calculation of 2015. The effect was, the more you oppose a beneficial policy, the more the aesthetic decay compiled and remain unsolved. Now the consequence of their unfounded critics is what they want to carry now which is almost impossible to solve in 8years. The problem we have as a nation is that our critics are never issue based but political gain

Realdeals:
@ gohome

What happen to the 445,000 barrel of crude produced for domestic consumption

In addition,
a. What is the tangible evidence of how well the proceeds of the partial removal and SURE-P initiative?

b. What explains the price of N130 for kerosene that enjoins subsidy and should be sold at N50 official?

c. Where is the common sense of buying refined fuel from abroad while we export the raw crude when the same govt is preaching a ban to the importation of fish and other goods that we naturally produce locally?

Energy sector and Agriculture obey different set of rules, when Buhari sits, he will realize that Nigeria doesn't even have feed stock for existing refineries, from there he go begin develop grey hairs
Make no mistakes, buhari understand the energy sector a lot, I still trust his judgement, what we cannot guarantee is the extent of damage Jonathan has done.

e. How do you react to this revelation:

kinibigdeal:
Question

Were you able to give this analysis when jonathan government made several attempt to remove it? were you not part of those that protested against it at ojota? Now those that oppose it during is government are trying to remove it! Our politics is all about interest and not about the citizen

Realdeals:
subsidy a scam! visit this thread https://www.nairaland.com/2339465/buhari-not-use-oil-marketers

"...In the short run, we will not use the marketers for the PMS importation... we shall give all our local PMS needs that NNPC cannot refine to foreign firms to refine for us and pay them the cost of refining...
"We shall provide transport to ship crude to and from the foreign refineries and pay the cost of refining for us...I believe that will remove the subsidy fraud in the short run...
"when I give you 200,000 bpd to refine, you must give me the equivalent outputs that it will bring in kerosene, PMS, Diesel etc...
"...But in the long run, we shall encourage local refineries..."

nairamaniac:
why do you Nigerians forget so easily?Jonathan didn't say "let's remove the subsidy, cos its a scam". he said, " let's remove the subsidy cos iv been scammed". he was scammed to spend 1.2trillion naira as against 400 billion which was spent the previous year. now, Jonathan transfered the burdens of his damage to us the ordinary citizens to pay for the excess 800billion. we d citizens played for this damage every subsequent year thru d removal of subsidy. Jonathan's government is the worst ever, economically speaking. no one has even asked why the naira was devalued last year November. the naira was devalued from 160naira/1dollar to above 250naira/1dollar becos our wicked country had to access our foreign-reserve in order to make up for difference in oil-revenue after oil prices had crashed. the yearly budget depends mainly on oil revenue. as oil prices crashed from above $100 to less than $60, the government wdnt have been able to meet up with a budget of 4trillion anymore, the most they WD have gotten is about 2trillion. they needed money from somewhere. that somewhere was the 'foreign reserve'. they wanted it to be plenty wen converted to naira, hence they devalued the naira and the economy and masses suffered just as it suffered when subsidy was removed. My people, God loves this country that y he has directly bailed us out on two major-occassions . the 1st time was thru the death of Abacha. the 2nd time was the removal of Jonathan.

I just died!!

Sir,

Cant make sense of what you wrote.
Articulate your points properly for me Sir, so l can respond them.
If l have 'no idea what is going on', l will appreciate if you educate me here, openly.
Tell me why the "cabal is praying that "subsidy" be removed! Which subsidy?

1. Because the sector is not fully deregulated. The money these marketers get from PMS, they can afford to sell diesel to you at any price. You are lucky. If the sector is fully deregulated, you may buy diesel at 180 Naira per liter

2. I also believe the reason that the price of diesel is high is because it is not lucrative to import it. The marketers simply ignore it and all rush for the beautiful bride called PMS because of the subsidy they will get from govt. This creates artificial relative scarcity of diesel and the price remains high

3. The price of crude oil is not directly proportional to the price of diesel. In other words if the price of crude oil is reduced by 40 percent, the price of diesel will only reduce by 5% or less The reason being diesel is a necessary by product from the very cherished PMS. It's prices are determined by refining margins amongst other factors. These margins are calculated from the composition of crude refined

The price of diesel has dropped in several countries but risen in others. From July 2013 to July 2014 (oil price peak), the retail price of diesel dropped by 3.6 percent in Germany. In Japan, prices increased by 9.7 percent during the same time. The United Kingdom had some of the highest prices for automotive diesel, reaching 1.93 U.S. dollars per liter in July 2014. Today in the UK, the price of diesel is 1.91 U.S. Dollars.

4. I also believe the reason why diesel was scarce last week is because markerters refused to lift. diesel boggle everywhere

Answer

ohzee(f): I believe the reason that the price of diesel is high is because it is not lucrative to import it. The marketers simply ignore it and all rush for the beautiful bride called PMS because of the subsidy they will get from govt. This creates artificial relative scarcity of diesel and the price remains high.

The price of diesel has dropped in several countries but risen in others. From July 2013 to July 2014 (oil price peak), the retail price of diesel dropped by 3.6 percent in Germany. In Japan, prices increased by 9.7 percent during the same time. The United Kingdom had some of the highest prices for automotive diesel, reaching 1.93 U.S. dollars per liter in July 2014. Today in the UK, the price of diesel is 1.91 U.S. Dollars.

wirinet:

Having said that, i am not a fan of deregulation in a critical sector like the petroleum sector. There is never deregulation in the real sense of the word in any country in the world, government always regulate to some extent all industries in order to prevent abuse, monopoly and to protect public interest. It is the degree of regulation we should be debating about. "Deregulation" is good in situations with efficient market economy with strong institutions, but had been proven to be disasterous in countries with inefficient or underdeveloped markets with very weak institutions. All you will produce is monopoly or Oligarchy and the masses being at the mercy of a few powerful cabals.

gohome: If you do not deregulate, you wont build efficiency in Nigeria. Refining margines are very small with the volatile oil market you have. Big players like Shell BP Total etc would not build refineries if you do not let you government hands off. When Dangote's refinery is ready he will sell to Ghana, Togo and the likes if your Govt does not hands off. Fuel is not cheap. it is 220 Naira per liter. Get use to it.

wirinet:

This is what we have in almost all sectors of the Nigerian economy that had undergone deregulation. This is why deregulated Diesel and aviation fuel will never be cheap and available. This is why DSTV, MTN, Etisalat, etc can charge the masses very high tarrifs with very poor services. This is why deregulated NEPA is worse than regulated NEPA. I can go on and on. Before Thatcher deregulated or privatized the British economy, she made sure that the public run enterprises were running optimally and efficiently and very efficient regulatory bodies were in place.

gohome:

Thats the good thing about deregulation.

MTN better than NITEL
DSTV better than NTA
NESCO better than NEPA.

If you choose to use NITEL because MTN service is not good, go ahead. If you choose to watch NTA, go ahead. If you choose to use NEPA instead of solar and inverter, or NESCO go ahead.

NESCO is an independent power company in Jos that supplies 24 hours light to its customer

gohome: Subsidy removal has nothing to do with scarcity. PMS subsidy does not exist in 90 percent of the countries in the world, yet no scarcity. Why should it be scarce in Nigeria. No subsidy in Ghana, Niger, Togo, Benin, Kenya, SA, No scarcity. PMS is available worldwide if you want to have it at 1.1 dollars per liter. The only reason for Diesel scarcity is the fact that marketers refused to lift. If MTN refuses to give you service, Etisalat will. If OandO refuses to give you diesel, Capital Oil will. Deregulate the downstream sector is the only way. 3% of your budget goes to your National Assembly. Let them pass law and implement policies to guide against capitalism excess. Go and read about the meager between ATT and Tmobile.

Reply to Wirinet Comments

[b]450,000 for domestic consumption does not fall from the sky. You have to produce it. It cost 30 dollars per bbl to produce it. Depending on the oil price, you will likely lose 9 billion dollars a year. This is minus the so called subsidy. With an infrastructural decay that needs hundreds of billions to solve, you want to pay subsidy? You are in a country where the government expenditure per person to tax is the highest in the world and you want to still pay subsidy. Your economy (mass transit, banks and industries) runs with diesel not PMS.

What is the population of the UAE? You are 170 million boy. It is not affordable.

Your budget is a mere 4 trillion. Guess what the budget of New York City with 8.9 million people alone is 15 trillion. Your government is poor, it needs money from anywhere. Help it.

Help it create a level playing field to unlock new opportunities. If we show investors we can buy fuel at 200 to 250 naira a liter, you will see them come. We then will be talking about 200K direct jobs easy and another 5 million indirect jobs.

Your country is poor. You need to start paying 30% tax so your government can run your country.

Buhari will not pay a dime on PMS subsidy. Petrol will sell at 1.1 dollars per liter. Unless he wants to throw away 9 billion dollars (465000 bbl) another form of subsidy. You won't die. My grandma in the village buys petro at 210 per liter, food are transported via diesel, mass transit is via diesel, industry via diesel. Nothing will happen

i really do not know how to explain to these guys that we cannot afford it. No country with a population of 150 million plus pay subsidy on PMS.

Let them keep hiding under masses. Borrowing money to enrich few rich men. Sometimes I feel like disowning this country. People you try to help are the same people killing you.

Pavore9:
The subsidy is a fraud! A litre of Petrol is N181.07 here in Nairobi though it was about N224 per litre before the recent oil crash but even at the N181.07 per litre transport fare is still cheaper here than in Nigeria. Subsidy should go as Nigerians are not even benefiting from it.

sparkleboy:
Booked


GEJ should have removed this subsidy on Pms completely then and spent the SURE-p fund on building or repairing new refineries that should have been handed over to private companies to handle and manage.
We wouldn't have been in this mess if such had been done but the wicked cabals that are enjoying the deep corruption in that sector would not allow such.
People like Wale Tinubu, ifeanyi uba, pres obasanjo, otedola, rahamaniyya oil,
These people enjoy the loot from under supplying and been overpaid. If you see the deep corruption that goes on in the Pms supply chain You'll be scared for Nigeria.

Most of them import the cheapest fuel, and over value their oil,
A lot of the so called subsidised oils are refined in the refineries owned by our former leaders and business moguls in Trinidad and tobago, guinea, etc.
a lot of the subsidised fuel ends up in neighbouring African countries such as TOGO, BENIN, GHANA ETC,

SOLUTION
BUHARI SHOULD CANCEL PAYMENT OF SUBSIDY AND REVAMP OUR REFINERIES AND GIVE IT TO A PRIVATE COMPANY TO MANAGE.

I have just a few questions.


1). How much were previous administrations paying for subsidy??

2). How much did Jonathan pay on assumption of duty as the president and in subsequent years as president??

3). What necessitated the geometric increase in the expenditure on subsidy soon after Jonathan took over?? It was about 300billion on the budget but burgeoned to nearly 2trillion at the end of the fiscal year. Was there a corresponding increase in the demand of products to have warranted such increase in "supply"?? Did Nigeria get thirstier for petroleum products??

4). Was there any supplementary budget passed by the NASS to accommodate the increase as stated in #3??

5). There were about 40 importers of products prior to Jonathan's regime. After he took over, the list went over the roof to about 150!! What was the reason behind this??

gohome:
Answer

[b]The subsidy issue is not shrouded in mystery. You have chosen to be ignorant. The average price of PMS around the world is about 1.1 dollars per liter. That's 220 Naira per liter. Poorer countries pay this. We produce 2.2 million barrels per day, rich countries like Russia US, China, India UK Brazil that produces up to 5 times more oil than we do pay this. Poorer countries like Haiti Angola Gabon also pay this. Even poorer and remote villages in Nigeria, burutu Nembe, mambila pay 200 plus for a liter. So what is the problem with it all gone? I'm 2012, sanusi and Iwealla with Allison went round TV stations explaining the steps to fully deregulate the downstream sector, no one listened. 65 Naira or nothing was the chant. I remember when Sanusi said the best way to put a fire out is to eliminate the source of the fire.

It was shame that GEJ and his ministers did not have the political tenacity to completely do way with this fire. Buhari seems to have it. He will remove it, fuel will sell at 180-220 per liter[/b]

gohome:
Question



Answer

[b]Nigeria can no longer afford to pay subsidy on petroleum products full stop. Corruption or no corruption we do not have the money to pay. You have to let it sink in your head. We have an infrastructural decay that will take 200 billion dollars to fix, you have annual 'deficit' budget of less than 20 billion dollars of which 40 percent is used to fund lazy states and you want to continue to spend 25% of your the remaining budget to subsidize PMS?

Hope the anology below helps

You are the head of your house, and you have an annual budget of 100 naira. Rent in a dilapidated house is 20 Naira. School fees is 20 Naira. Transportation to work and school is 30 Naira. Fueling your generator is 30 Naira. Let say you want to start up a new business to increase your income and as such you need to save 20 Naira. You also need to move from your present apartment because the ceiling leaks water any time it rains, which will require you save an extra 10 Naira. You took a loan from the bank, and the monthly deduction is 10 Naira. You have relations that cannot run their family and they have come asking for money because the landlord is about to evict them from the house. In the middle of all these, Something happened and your annual budget is reduced to 50 Naira. Will you keep paying for fuel to light up your house while you cannot pay rent and your kids can not go to school?

Before you critic always put yourself in a leadership position and provide practical solution
[/b]

OreMI22:
[size=17pt]

Unless President Mohammed Buhari implements the agreements of Nigerians at the CONFAB, there will be crisis in Nigeria.

Buhari has said he will dump the CONFAB agreements into the dustbin.

As for me and my own corner of Nigeria, CONFAB approved a 50% derivation principle.What needs to happen now is a guerrilla warfare against oil pipelines, installations and personnel until the agreement is implemented.[/size]