backbencher:


That's because in order to get a refinery at home, subsidy on PMS has to go first.

Same problem his predecessor had. Signed an agreement to build 3 refineries with the chinese, which were not built because subsidy was not removed completely.

If subsidy does not go, the refineries cannot operate profitably. Had we removed subsidy in 2012 or 2015 or 1993 we would have had refineries galore.

But everytime subsidy removal has been suggested, people come on the street and cry poverty. People threaten to come on the street and cry poverty. So, subsides remain, and investors keep out.

At the end, someone had to take an unpopular but good decision, but no...

Tonytonex:
and if that is what they have been doing then why are they crying foul that they will increase the prices of the product?

WebWriter:
Omooo

I'm taking content writing offers. Need a Web writer? Kindly reach out

Greyworld:


Not people.... politicians with ulterior motives like buhari did in 2012.

backbencher:


Because after sometime, it becomes expensive to maintain subsides at a certain level

So a decision is taken to either remove subsidy fully (which most people don't want) or remove it partially (done several times over the last 40-45 years).

Tonytonex:
They should use the extra money they made from increase in crude oil to pay for the subsidy. Abi dey wan pocket that one? I wonder how these people dey think.

GardenOfGod:
Crude Oil Price: MAN Warns Of Hyper Inflation, Subsidy Hits N400, Diesel, 625

The rising prices of crude since the Russia-Ukraine war began, coupled with exchange rate instability in Nigeria, among others, have pushed up the prices of refined petroleum products across the country, according to findings by The PUNCH.


Punch

Tonytonex:
who are the most people that don't wants it removed?

Moferere:
Last week I bought diesel for ₦460 /litre, on Sunday, I bought it for ₦500/litre.. Only to get there yesterday and they told me it's ₦627/litre.

Mind you, 100 litres will only last for 8 hours.
That's how they are killing me softly in Nigeria

GAZZUZZ:


one of the only sensible comments.


It's simple maths, you make more on crude, divert it to subsidy since we cannot refine locally.

backbencher:


That's because in order to get a refinery at home, subsidy on PMS has to go first.

Same problem his predecessor had. Signed an agreement to build 3 refineries with the chinese, which were not built because subsidy was not removed completely.

If subsidy does not go, the refineries cannot operate profitably. Had we removed subsidy in 2012 or 2015 or 1993 we would have had refineries galore.

But everytime subsidy removal has been suggested, people come on the street and cry poverty. People threaten to come on the street and cry poverty. So, subsides remain, and investors keep out.

At the end, someone had to take an unpopular but good decision, but no...

Kokaine:
what exactly is this subsidy thing. Explain how its done from the scratch.

We have crude oil, we extract it, we send it to what and what country? Then they sell it back to us? And then we make profit.? I don't just understand this petroleum industry chain

Mumusaphire:
Die-sel, #625? Lol. And many irrelevant online miscreants supporting Putin.

gabzymedia:


Send us mail: gabzymedia[@]Gmail.com

backbencher:


Okay here is how subsidy works in principle.

Fuel as at 3 days ago, cost N330 to bring in. We sell that fuel at N162, the money paid to cover the resulting loss is called the subsidy.

The problem is, we refine all our fuel abroad because refineries are in a bad state...and even if they were not, we would have to import some fuel

Why we refine our fuel abroad is simple...when we had refineries, initially, they were allowed to sell fuel at a profit, and then government paid part of the costs...that was the subsidy then

Then from the late 1980's, government started making the refineries sell fuel below their production cost...which meant they started losing money...but then government paid them a subsidy to cover the loss. Naturally, rising costs meant that the subsidy could not cover the whole thing...which led to our refineries breaking down and by 2011, producing 6million liters of fuel a day., down from the over 20 million they were capable of. Sabotage and corruption did the rest of the job.....because the refineries were dependent onsubsidy to survive, not profit.

So, we started importing fuel, and selling it below the production cost. Intially, NNPC was one of several importers. The number of importers kept on growing until we had a large number of them...which led to subsidy costs rising, and a lot of corruption...people making false subsidy claims on fuel not imported...till Bubu made NNPC the sole importer.

Also, to keep fuel below the production cost, we refine crude in substandard refineries abroad. That keeps subsidy costs low, but leaves us at risk of bad fuel, and even then, PMS in this country is very dirty.

So, that;s it in a nutshell.

Basically, in order to ensure cheap fuel, we sell it at a loss, and pay a subsidy to cover the loss...

justdream:
This Nation is about to Implode. Crime will triple and hunger will force more crimes. The coming days are filled with uncertainties, God help us walai.

But nobe we tell Russia make e evade Ukraine na, wich kain wahala dem want put we law-abiding Nigerians.

backbencher:


Which is what we have been doing for decades, and which has led to us ending up eventually having deficits in the budget.

Plus it is getting to a point where the debt incurred from our years of low oil price is being paid back as well

Finally, subsidy costs are rising. Nigeria needs more money for things like health, educaiton, sports, transport, etc. Why should we spend more money on subsidy instead of those other things?

Moferere:
Last week I bought diesel for ₦460 /litre, on Sunday, I bought it for ₦500/litre.. Only to get there yesterday and they told me it's ₦627/litre.

Mind you, 100 litres will only last for 8 hours.
That's how they are killing me softly in Nigeria

backbencher:


Okay here is how subsidy works in principle.

Fuel as at 3 days ago, cost N330 to bring in. We sell that fuel at N162, the money paid to cover the resulting loss is called the subsidy.

The problem is, we refine all our fuel abroad because refineries are in a bad state...and even if they were not, we would have to import some fuel

Why we refine our fuel abroad is simple...when we had refineries, initially, they were allowed to sell fuel at a profit, and then government paid part of the costs...that was the subsidy then

Then from the late 1980's, government started making the refineries sell fuel below their production cost...which meant they started losing money...but then government paid them a subsidy to cover the loss. Naturally, rising costs meant that the subsidy could not cover the whole thing...which led to our refineries breaking down and by 2011, producing 6million liters of fuel a day., down from the over 20 million they were capable of. Sabotage and corruption did the rest of the job.....because the refineries were dependent onsubsidy to survive, not profit.

So, we started importing fuel, and selling it below the production cost. Intially, NNPC was one of several importers. The number of importers kept on growing until we had a large number of them...which led to subsidy costs rising, and a lot of corruption...people making false subsidy claims on fuel not imported...till Bubu made NNPC the sole importer.

Also, to keep fuel below the production cost, we refine crude in substandard refineries abroad. That keeps subsidy costs low, but leaves us at risk of bad fuel, and even then, PMS in this country is very dirty.

So, that;s it in a nutshell.

Basically, in order to ensure cheap fuel, we sell it at a loss, and pay a subsidy to cover the loss...

GAZZUZZ:


This is one of the few things a common Nigerian benefits from being a Nigerian in an oil producing country.

We are not the only country that subsidised petroleum products, the UAE , Bahrain, etc subsidize products BUT have functional refineries that refine crude.

Until the govt can refine petroleum products locally subsidy should continue

Do you know graduates still earn ₦40,000 per month in certain quarters? Do you know what removal of subsidy will do? End sars will be child's play, the govt will give the populace a common enemy.

Moferere:
Last week I bought diesel for ₦460 /litre, on Sunday, I bought it for ₦500/litre.. Only to get there yesterday and they told me it's ₦627/litre.

Mind you, 100 litres will only last for 8 hours.
That's how they are killing me softly in Nigeria

VaselineCrew:


Our politicians are extremely corrupt, because with all you said, it would still make sense to have a refinery at home and pay them the subsidy.

I don't support subsidy either, but if we have been paying subsidy, why pay it to a foreign country?

When it comes to paying subsidy to the white man country, their money will always be complete, but when it comes to paying subsidy for our own refineries, that is when they will tell you that their money is not complete, because it seems they would rather deal in dollars.

Also, if subsidy is removed in its entirety, then shouldn't minimum wage be raised?

Lastly, the NNPC could have a subsidy to benefit Nigerians while other companies sell at market price. So for instance, you would have an NNPC mega station selling at N165, while you would have the others like Total, Shell and so on selling at the prevailing market price, maybe N300. So the people can decide to form long queues at NNPC mega station or if they are in a hurry, go in to buy without a queue at the other stations.