₦airaland Forum

Kobonaire4:
Yes, subsidy is the main reason why our refineries, nitel and nepa failed.

At the end of the day when goverment price is below the production cost problems start.

Private companies do not have that problem because they have to run at a profit and their getting money depends on having everything working.

Public companies get free subsidy momey and free allawee whehter they work or not, which is why they fail.

Keep that in mind.

You are still not getting it.

The most important reason for failure of public enterprises is corruption, tribalism, poor management and Nepotism.

That's while globally governments do not run businesses successfully weather subsidy or not.

I support removal of subsidy ,if it exist in the first place and at the amount been quoted.

But claiming that removal of subsidy would make our refineries to be run optimally under government is an Illusion.

blueAgent:
You are still not getting it.

The most important reason for failure of public enterprises is corruption, tribalism, poor management and Nepotism.

That's while globally governments do not run businesses successfully weather subsidy or not.

I support removal of subsidy ,if it exist in the first place and at the amount been quoted.

But claiming that removal of subsidy would make our refineries to be run optimally under government is an Illusion.

When the first GSM companies came out...Mtel (the government owned one) was charging rates that where half of what MTN, Glo and Airtel were charging.

The result...the other three had enough profits to improve and grow. Mtel collapsed.

Also, the same thing with power supply....we have a situation, even with privatisation, where discos and gencos are forced to charge fares below what it costs to produce power. Result...they lose money , and they cannot pay for improvements.


Same thing with petrol....we sell one liter of petrol below what it costs to produce it. Result...of 50 years of doing that....bad refineries and repeated scarcity.

At the end, it does not matter how badly managed a company is, if it is forced to sell at a loss, it would break into pieces, even if we had a management team from heaven


You won't sell at a loss to help the poor.


Again, MTN, AIRTEL and GLo work well because first and foremost...thier prices are not set by government, and they can make a lot of profit.




The problem is, we all want cheap fuel, without thinking about how much it costs.

Venezuela has been selling fuel cheap for nearly 3 decades....and in that time, their large regfinery that used to refine 900000 barrels now refines 100000 barrels.

The thing about subsidy removal is simple. NNPC, DAngote, et al would have to work for their profit. That means no sabotage, nothing.


You dont have to agree with me.....but it is irrational to keep selling fuel at N195, when we bring it in at N510 and expect there to be no irregularites.

Cheap fuel does not exist.

reiddecuti:
I won't be surprise if Dangote source his buyers from outside country. And all hope these useless government that have bedevilled Nigeria since 4th republic will be dashed.

A responsible government would have taken up the task to fixed the refinery but not in Nigeria.

Look at UK energy crisis, it was because government sold off it's assets to private sector and subsidize again thereby costing them more to checkmate the highcost of energy. At least, they have a responsible government.

For those of us relying on Dangote refinery, be ready to embrace the turbulence it will come with. What does this mean, government is indirectly handing off her role in the sector to private sector and more chaos is coming.

1) Nigeria government has hands-off in the
transportation sector.

2) They have partially hands-off in the education and health sectors. That's why we have more of private sector dominating in these sectors.

3) What about energy sector (electricity, diseal, petroleum) - partial hands-off.

4) What about security - partially hands-off.

That's why there's chaos, where the sectors record low productivity thereby creating no new jobs and the jobs out there, only few pay decent wage.

Nigeria government has failed and will continue to fail until the day we say enough. It's a pattern that has been birthed and need to be broken before any progress is made.


It is in nature of man that once a pattern is established, he will always travel round the pattern, unless it is broken by 'Discipline, Will, and Commitment'.

The government has no business running businesses and should hands off to the private sector.
Govt. is rife with subsidies, inefficiencies and striking staff because people believe they can get easy money.
For example: walk into a civil service office and see their ethics, and then compare with a KPMG or private company office ethics. The difference is clear!
Private companies owned by citizens should run businesses, Govt should enact policies to drive growth and healthy competition.

FalseProphet1:
I see dangote exploiting Nigerians once he's refinery is completed, I see fuel selling for over N200 per liter, I see people complaining, I see dangote exporting the fuel to neighboring African countries and selling to them at N80 per liter.

This I have seen.

General overseer 😂

Kobonaire4:
When the first GSM companies came out...Mtel (the government owned one) was charging rates that where half of what MTN, Glo and Airtel were charging.

The result...the other three had enough profits to improve and grow. Mtel collapsed.

Also, the same thing with power supply....we have a situation, even with privatisation, where discos and gencos are forced to charge fares below what it costs to produce power. Result...they lose money , and they cannot pay for improvements.


Same thing with petrol....we sell one liter of petrol below what it costs to produce it. Result...of 50 years of doing that....bad refineries and repeated scarcity.

At the end, it does not matter how badly managed a company is, if it is forced to sell at a loss, it would break into pieces, even if we had a management team from heaven


You won't sell at a loss to help the poor.


Again, MTN, AIRTEL and GLo work well because first and foremost...thier prices are not set by government, and they can make a lot of profit.




The problem is, we all want cheap fuel, without thinking about how much it costs.

Venezuela has been selling fuel cheap for nearly 3 decades....and in that time, their large regfinery that used to refine 900000 barrels now refines 100000 barrels.

The thing about subsidy removal is simple. NNPC, DAngote, et al would have to work for their profit. That means no sabotage, nothing.


You dont have to agree with me.....but it is irrational to keep selling fuel at N195, when we bring it in at N510 and expect there to be no irregularites.

Cheap fuel does not exist.

You arguing blindly, I have no issues with subsidy removal, what am saying is that subsidy removal would not cause the Elites or cabal that are running this refineries to become less corrupt and prudent,
Nigeria civil service and government at all levels is corrupt and inefficient, you can blame that on subsidy.


Subsidy is economical factor why corruption and poor management of the refineries are administrative factors, they are different things.

blueAgent:
You arguing blindly, I have no issues with subsidy removal, what am saying is that subsidy removal would not cause the Elites or cabal that are running this refineries to become less corrupt and prudent,
Nigeria civil service and government at all levels is corrupt and inefficient, you can blame that on subsidy.


Subsidy is economical factor why corruption and poor management of the refineries are administrative factors, they are different things.

So when you go into buisiness selling bread...sell it at N100 to help the poor.

Good morning. You think that other people should suffer because you want cheap things, and you do not understand how a subsidy is damaging to an economy.

Kobonaire4:
So when you go into buisiness selling bread...sell it at N100 to help the poor.

Good morning. You think that other people should suffer because you want cheap things, and you do not understand how a subsidy is damaging to an economy.

When you go into business, sell your bread at 5000naria and give the management of your business to ppl who are not capable and corrupt.

blueAgent:
When you go into business, sell your bread at 5000naria and give the management of your business to ppl who are not capable and corrupt.

Yes, so that I have enough profit to

1.Pay workers better salaries

2.Pay for improved equipement and manufacturing facilites

3.Pay any taxes set by government

4.Pay for better transport


5.It won't even be at N5000....it would be above the cost of producing a loaf of bread. Just above the cost....to earn enough profit to pay for all the above.


You on the other hand want to help the poor...without considering nos 1-4. At the end, your average seller of things wants to make a profit...not to help the poor. Restrict his profit motive....and you will see issues.

Go and read about subsidies. You need to. I'm telling you nicely...because 12 years ago, I was exactly like you. Until I sat down and read about what a subsidy was and why it was damaging.


P.S

There was a country called the USSR, where everything was subsidised. And eventually, after 5 decades of subsidising everything, they ran out of money, and collapsed.

People, including you, want to be paid for your services. Take away the profit motive, and there will be anarchy, corruption and bad management.

But then again, you don't have to listen to me

Kobonaire4:
Yes, so that I have enough profit to

1.Pay workers better salaries

2.Pay for improved equipement and manufacturing facilites

3.Pay any taxes set by government

4.Pay for better transport


5.It won't even be at N5000....it would be above the cost of producing a loaf of bread. Just above the cost....to earn enough profit to pay for all the above.


You on the other hand want to help the poor...without considering nos 1-4. At the end, your average seller of things wants to make a profit...not to help the poor. Restrict his profit motive....and you will see issues.

Go and read about subsidies. You need to. I'm telling you nicely...because 12 years ago, I was exactly like you. Until I sat down and read about what a subsidy was and why it was damaging.


P.S

There was a country called the USSR, where everything was subsidised. And eventually, after 5 decades of subsidising everything, they ran out of money, and collapsed.

People, including you, want to be paid for your services. Take away the profit motive, and there will be anarchy, corruption and bad management.

But then again, you don't have to listen to me

You too myopic and ingnorant to argue with.

I have worked in those refineries, am in a better position to tell you about the level of corruption going on in those places.

How many times would I tell you that am not against removal of subsidy, what am saying is that removal of subsidy without privatisation of the refineries is a waste of time and resources.

Both should be done simultaneously, subsidy removal and privatisation, if you still cannot understand this then check your level of comprehension.

your type just want to win argument, even when the facts or evidence do not support your points.

Am sure you are an APC and Tinubu supporter they lack logical reasoning.

blueAgent:
You too myopic and ingnorant to argue with.

That was not really necessary...you know.

I have worked in those refineries, am in a better position to tell you about the level of corruption going on in those places.
your type just want to win argument, even when the facts or evidence do not support your points.

Which is happening because

1.You guys are operating at a loss

2.You get government money from subsides and normal government allowances...whether the refinery works or not.

At the end of the day, if subsidy goes, you would have to work for your profit. Which means that anyone doing corruption and sabotage would be ending up sabotaging his or her earnings.No free government money or allawee or free subsidy money...under subsidy removal...means y'all have to work for profit...meaning no corruption, sabotage or mismanagement.

Like I said, once you take away the profit motive, and replace it with subsides that barely cover the losses made from selling fuel at subsidised prices, corruption and stealing results. Also, putting in free government money in a place is like pouring sugar on the ground...ants will come within minutes.

(Classic example...former communist countries).

Am sure you are an APC and Tinubu supporter.

[/quote]By your reasoning, the man who said this(hint, it was Peter Obi)

Subsidy – I’ve said it before – is organised crime and I will not allow it to stay a day longer

is a tinubu agent, as was Ngozi Okonjo Iweala and Sanusi lamido sanusi. Also, Atiku and many others must be working for Tinubu too...since they have said subsidy must go.

Like I told you, my mind was changed on subsidy 12 years ago. I woke up. Back then tinubu was leading pro subsidy protests.(and back then anyone supporting subsidy removal was a GEJ supporter)

englishmart:
I don't know if you knew that Dangote refinery is a money laundering project. That refinery is a northern project. Dangote alone can't fund that project.
Shame on you all.

Why you no call am money Drycleaning project? When it didn’t come from your Biafro brother. Onye iberibe. Otun n negi.

todugo:
Exactly, the Government has a huge share in dangote refinary. To make profit they will increase the price now to 800 per liter and say they have removed subsidy.
When dangote starts selling they will reduce it to 400naira per liter.
Wicked government.

It’s only 20% government has, Mr. man. Nothing huuuuge investment in that. They would get whatever is declared as dividend, nothing more, except of government will sell its investment in the refinery later.
They o my used it to help the refinery take off quickly. The 20% is on form of crude oil, not even cash.
With other refineries coming on board, price of fuel will come down, although it may first of all remain at average of N500 (the premium one) per liter.
There won’t be anything like queue again and several ancillary industries will spring up.

Even at that price, Nigeria still maintains 8th position in world where fuel is cheapest and 4th in Africa. We were on 3rd position before.

Kobonaire4:
JPMorgan chase is not the only bank in the world...

Plus here are the guys funding dangote (It is in the public).



SIAUCE

And from 2013 when the thing kicked off



Source


And then again, JP Morgan won't finance the project because Nigerians want Dangote to sell fuel to them at a price less than what it cost to produce it...'because we are poor'.

FYI I live in America and hard it may be for you to understand but when an institution sends me a prospectus regarding buying a bond with a yearly yield of 4% even though the yield is good as an American two things I check when buying a bond are one Bond Rating, and secondly the Underwriter. This project's bond rating by Moody was B+ which means 4% yield is too low with the risk associated with the project. The yield needed to be around 5.5%. No USA bank as an underwriter was a red flag for me. If the project God forbid goes south who am i going to sue? Some banks in Africa, I don't think so.

t2luv1:
FYI I live in America and hard it may be for you to understand but when an institution sends me a prospectus regarding buying a bond with a yearly yield of 4% even though the yield is good as an American two things I check when buying a bond are one Bond Rating, and secondly the Underwriter. This project's bond rating by Moody was B+ which means 4% yield is too low with the risk associated with the project. The yield needed to be around 5.5%. No USA bank as an underwriter was a red flag for me. If the project God forbid goes south who am i going to sue? Some banks in Africa, I don't think so.

I'm not surprised...the fact is, since Nigeria as a country runs a subsidy regime...meaning any petrol sold from the refinery would be sold at a loss...meaning that any bank investing is not going to get their money back.

But at the end of the day, we need to not rely too much on 'because American bank did not invest in it, therefore project bad'. I hate to sound like a 'let's not trust the US imperalists' person...but at the end, he did find backers...and we have a large refinery.

All we Nigerians have to do is at least accept that petrol costs money, and stop pretending it is cheap. In the US, at least, they don't do that.

You can keep waiting for som1 that is part of Naija's problem. Govt gives him forex at 200 Naira or less for a dollar, he sells it at 700 or more and comes back again. Forex roundtripping gives him more money than hé would ever make in refinery that will never be completed unless hé is bursted!

ZombieSlayer1:
But artisinal refiners are refining the same crude without spending billions. The funny thing is that a lot of petrol stations are buying from these artisinal refiners

That's cos they are STEALING the crude that oil companies used Billions to explore, develop and produce, using very crude techniques that destroy the environment and do not guarantee quality. It's all well and good using products from those artisanal refineries until your engine knocks!

COMPAQ:
That's cos they are STEALING the crude that oil companies used Billions to explore, develop and produce.

True, but my point is that if they can refine the crude, why isn't Nigeria doing same? We spend billions every day on maintenance of refineries with nothing to show for it

ZombieSlayer1:
True, but my point is that if they can refine the crude, why isn't Nigeria doing same? We spend billions every day on maintenance of refineries with nothing to show for it

If you are looking at it from a business point of view, if petrol is subsidised at N165, while production cost is N400, then surely you don't expect the refineries to survive.

From a social point of view, even if you want to say we accept the subsidy, Nigerian government has a horrible track record of running any business. I make bold to say there is NO SINGLE business run properly by FG. I challenge you to give me one that has been run effectively for 10years straight.

Those are reasons why we cannot refine crude.

englishmart:
I don't know if you knew that Dangote refinery is a money laundering project. That refinery is a northern project. Dangote alone can't fund that project.
Shame on you all.

Do you know how much Nigerian banks put in?

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