What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? - Politics (3)

What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? - Politics (3) - Nairaland

Nairaland Forum › Nairaland General › Politics › What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? (17032 Views)

Poll: Do You Trust That President Tinubu’s Government Will Use Savings From Higher Crude Oil Prices To Better The Lives of Nigerians?

Yes 21% (91 votes)

No 78% (338 votes)

This poll has ended

1 2 3 4 5 6 Reply (Go Down)

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by nairalanda1(m): 7:58pm On Mar 08

givedemwotowoto:
Out of 1.6 million barrels of oil daily production, going by 60 - 40 arrangement, Nigeria owns 960,000 barrels.

Out of 960,000 barrels, Nigerians consume only 327,000 barrels daily. Nigeria still has over 600,000 barrels they can sell to the international market at prevailing global oil prices.

It’s interesting that Nigerians who are victims of corruption are the ones looking for all possible ways to explain and excuse why the government can’t do better for them

Oga, why are you like this.? Did I excuse corruption in my comment?

Did I support any government in my comment?

Seriously man, you are behaving like the data boys from the government side

At the end of the day, there are many reasons why we can't subsidize fuel again, and yes that's largely due to past government inefficiency, but what is done is done.

I'm ending this here. You ain't interested in an answer. You just want to mock people

Seriously man, man up.

3 Likes

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Cromagnon: 7:58pm On Mar 08

ceejay80s:
Does any one knows tinubus username on nairaland, I need to tell him how useless and evil he is for making Nigerians suffer cos he wants to be president,
Seun ban me

post letter to Aso rock. It will reach.

1 Like

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Cromagnon: 7:59pm On Mar 08

MrPresident1:
Absolutely nothing.

Dangote will be nationalized. It is just a matter of time

Even in Iran where they are fighting, the price of petrol is less than N60 per litre.

What they are doing to Nigerians is evil.

How is demand and supply evil

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by bukatyne(f): 8:00pm On Mar 08

givedemwotowoto:
So you mean Nigeria is now making a lot more money to take care of the local needs of Nigerians?

If they explain Nigeria to you and you understand, it means the person did a bad job.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Cromagnon: 8:00pm On Mar 08

Sheuns:
The purpose of government is to provide good governance to the people it govern and not make profit.

The federal government if they had a functional refinery are supposed to set aside a certain amount of crude that will cater for local consumption and has to be lower than what they sell to international markets.

That’s what Russia, Saudi Arabia and some other oil producers do.

How many barrels do they produce
What's their population

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Blackdisciple(m): 8:02pm On Mar 08

Normally if this country is working this should be the time for us to make money with our oil ... But reverse is the case...

1 Like

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Cromagnon: 8:02pm On Mar 08

Do you use your business for Nigerians welfare?

Mrtaye:
You can't be using Nigerians welfare to make your business naw...nobody is saying you shouldn't prosper but not at the detriment of Nigerians naw abi can't we have local or modular refineries to cater for our local needs ni abi Nigerians to are your business partners....this is all about innovation

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Lithiumite: 8:05pm On Mar 08

lawani:
If ships can not pass through the strait then transportation becomes more expensive and supply becomes an issue pushing up the price. Once the price of crude goes up then Nigeria's federal government will gain but consumers of PMS will have to pay more for it. Nigeria will not sell to Dangote or anybody at lower than the international price. They are not even obliged to prioritize Dangote

You answered it all.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Sheuns(m): 8:07pm On Mar 08

lawani:
That is just an unnecessary complication. It is better to sell at market rate and also pay your workers competitive wages. It does not make sense to sell at two rates

Is 70,000 naira per month a competitive wage if you sell petrol to your people at international prices?

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by tixo: 8:08pm On Mar 08

Does it mean apart from Dangote, no refinery in Nigeria is able refined and mitigate the effect of this rise in price; Or are Nigerians at the mercy of that special factor - CORRUPTION!

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Mrtaye: 8:13pm On Mar 08

nairalanda1:
So if you were running a business, would you let Nigerians set your prices or would you set the prices that enable you to pay taxes and meet your daily needs and replenish stocks among other things?

That is where innovation comes in...if Nigerians have to suffer because you are making business then you are not innovative even with the fiat you have

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Frezhkid10(m): 8:15pm On Mar 08

givedemwotowoto:
Nigerians consume only 327,000 barrels daily out of over 1.6 million barrels produced daily, and the government still makes huge profit.

In addition to that, government still has over 1.3 million barrels to sell to the rest of the world at the global oil price and make even bigger profits

Why must the local population pay the price of rising global prices even when their purchasing power is already very low from Tinubu’s policies?

You remember the loan tinubu government got from AU bank??..3billion dollars..how will they repay?..by supplying 90,000 barrels per day till 2030..so most of Nigeria today's production has been contracted out..

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by NothingDoMe: 8:16pm On Mar 08

lawani:
If you are in business, do you sell lower to your friends and family members? Then a large portion of Nigerian crude is already pledged to pay debts. Also, if you sell lower to Dangote, that is going back to subsidy again and I personally don't support that. I believe and hope hostilities in the middle east will soon end because I read American analysts on Quora saying if Iran actually closes the strait of Hormuz then it can't be reopened in less than three to seven years and pms price will at least double

Lol and you didn't ask what they will use to close it? Rocks? Abi fishing boats that will be blown out of the water. Lol again.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Mrtaye: 8:16pm On Mar 08

Cromagnon:
Do you use your business for Nigerians welfare?

You are not just all about business but also about the welfare of your people

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by givedemwotowoto(op): 8:16pm On Mar 08

casualobserver:
1: Dangote imports most of its crude and will pay the international price whether it is buying local or imported crude.
2: Dangote is a private concern.
3: Dangote refinery is sited in a free trade zone, technically it is not cited in Nigeria, it is a merchant refinery.
4: subsidy has been removed.
5: Dangote refinery is not a govt refinery.

Nigeria doesn’t spend N1 in crude oil production, the oil companies do, and they will get their profit from their own share of crude. Nigeria sets its own price when they receive their share of crude, about 1 million barrels per day. If they sell to their international market, they must sell at the prevailing international market price. If they sell locally for local consumption, they can sell at a lower price.

Nigerians consume only 30% of Nigeria’s share of daily production. They still have over 60% to sell globally at the prevailing international market price, so what’s the problem? Why are already suffering Nigerians paying for the blockage on the Strait of Hormuz?

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by bukatyne(f): 8:16pm On Mar 08

givedemwotowoto:
Out of 1.6 million barrels of oil daily production, going by 60 - 40 arrangement, Nigeria owns 960,000 barrels.

Out of 960,000 barrels, Nigerians consume only 327,000 barrels daily. Nigeria still has over 600,000 barrels they can sell to the international market at prevailing global oil prices.

It’s interesting that Nigerians who are victims of corruption are the ones looking for all possible ways to explain and excuse why the government can’t do better for them

@ bold:

Really strange.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Fekumzi123: 8:17pm On Mar 08

tubolancer:
But the people will suffer and the looters will spend the gain, that has been the way.

They can never eat it alone.
It will surely get to everyone.
People work under them.
People render services to them.
They will have money to pay for hookups, etc.
Last last no be only government dey chop.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by kolokolobi(m): 8:17pm On Mar 08

Most of the current oil being produced are tied to forward contracts that was used to obtain loans. The actual ones that the government recieves payment from us low oooo.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Thomasankara(m): 8:21pm On Mar 08

[/color]why is it that situations around the world always seal the fate of Nigeria, but nothing happens in Nigeria that will affect the world. Is Nigeria so insignificant [color=#770077]

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Rutherinspace: 8:22pm On Mar 08

givedemwotowoto:
This is a rejoinder to: Petrol Price May Hit N1,800 In Nigeria- Refiners Warn

20% of global oil passes through the Strait of Hormuz. We get it.

But here are the facts:

1. Almost all of Nigeria's crude oil is sweet crude.

2. Dangote Refinery has the capacity to process 650,000 barrels of crude oil per day.

3. Nigeria's daily consumption of crude oil is 327,000 barrels per day (or 52 million liters per day).

4. This means Dangote Refinery can process 100% of Nigeria's daily consumption locally.

So for the defenders of fuel price increase, explain to us why there is fuel price increase at Nigeria's petrol stations.

Before you come with Canada argument, let me preempt you:
Most of Canada’s crude is heavy crude and almost half of the 16 refineries can’t refine heavy crude, so the crude oil needs to be exported to the U.S. for refining. Because it is exported abroad, global oil price will affect it: you export at a high price due to demand, you import at a higher price.

Oil is an international product. The government doesn't own all the oil. Let market forces decide the price. It's simple you reduce your demand.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by obailala(m): 8:25pm On Mar 08

givedemwotowoto:
This is a rejoinder to: Petrol Price May Hit N1,800 In Nigeria- Refiners Warn

20% of global oil passes through the Strait of Hormuz. We get it.

But here are the facts:

1. Almost all of Nigeria's crude oil is sweet crude.

2. Dangote Refinery has the capacity to process 650,000 barrels of crude oil per day.

3. Nigeria's daily consumption of crude oil is 327,000 barrels per day (or 52 million liters per day).

4. This means Dangote Refinery can process 100% of Nigeria's daily consumption locally.

So for the defenders of fuel price increase, explain to us why there is fuel price increase at Nigeria's petrol stations.

Before you come with Canada argument, let me preempt you:
Most of Canada’s crude is heavy crude and almost half of the 16 refineries can’t refine heavy crude, so the crude oil needs to be exported to the U.S. for refining. Because it is exported abroad, global oil price will affect it: you export at a high price due to demand, you import at a higher price.

Dangote buys the crude which he refines at the global oil price. So if the price of crude rises, Dangote also increases his prices.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Thomasankara(m): 8:28pm On Mar 08

[/color] honestly, many were rejoicing, but I told them that Dangote's refinery is a curse in disguise. Save this, Dangote will soon venture into communication, power and production of military hardwares, with the sole aim of monopolising them. By that time well be in Dangote's republic and Nigeria don enter one chance by then[color=#770077]

Greencloud:
This is the consequence of leaving the entire economy to Dangote

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Rutherinspace: 8:31pm On Mar 08

cunny88:
But then we should have some benefits as citizens of an oil producing and oil refining country.

Initially, the excuse was that refineries were not working and we had to import refined crude, what is the excuse now

There are many benefits that you get. The price is relatively cheaper compared to other countries. Public education is cheap. The country can no longer increase its debt. Things will get worse so it's better every one adjust. Always remember that the world runs on economies.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by obailala(m): 8:32pm On Mar 08

givedemwotowoto:
Nigeria doesn’t spend N1 in crude oil production, the oil companies do, and they will get their profit from their own share of crude. Nigeria sets its own price when they receive their share of crude, about 1 million barrels per day. If they sell to their international market, they must sell at the prevailing international market price. If they sell locally for local consumption, they can sell at a lower price.

Nigerians consume only 30% of Nigeria’s share of daily production. They still have over 60% to sell globally at the prevailing international market price, so what’s the problem? Why are already suffering Nigerians paying for the blockage on the Strait of Hormuz?

What you're asking for is basically 'oil subsidy'. The only way to keep pump prices low when it's expensive everywhere else is by subsidising.

If global oil price rises to say $100 and NNPC is instructed to sell to Dangote at $70 to keep petrol prices low, what that means is that Nigeria will be losing $30 for every barrel of oil sold (i.e. govt. paying a subsidy of $30 per barrel). So if 327,000 barrels (Nigeria's daily consumption amount) is sold to Dangote daily at $70/barrel, that's equivalent to ~$10million daily in subsidy to keep local petrol prices low.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by nairalanda1(m): 8:33pm On Mar 08

Mrtaye:
I
That is where innovation comes in...if Nigerians have to suffer because you are making business then you are not innovative even with the fiat you have

Sadly it doesn't work that way

Innovation costs money.

Also, your business has to make a profit. Whether Nigerians suffer or not is irrelevant sadly. If the business is.not making enough profit, you can't pay staff, you can't pay for maintenance and you can't pay for upgrades and even tax.

The thing is happening in the power sector where government forcing power companies to charge cheap prices is causing many of them to sack workers because money is not there to pay them, and government is not paying their salaries for them.

Life no be easy at all.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by MemoriesAndMe: 8:34pm On Mar 08*

Dangote already stated that it's refined products are mainly for export, so only some part of its products will be sold in Nigeria, others will be exported. Every business will prefer to export their products and be paid in hard currencies than sell in naira.

The straits will affect Dangote and NNPC if ships have to go through that route for exports. If Dangote has to export, NNPC exports too, all ships that goes through that strait route has to abide by Iranian laws, else they can get bombed. Even ordinary containers and consumer goods going through that route through ships need to abide by the laws because that area is owned by Iran.

Oil prices are sold at a global benchmark prices, so no country can come up with its own price, lower than other countries' prices - that's one reason OPEC exists. If Saudi Arabia, Iraq,Iran,Dubai, Afghanistan, Venezuela, Kuwait etc are losing from the war, it affects oil prices globally and Nigeria will be affected too as an OPEC member.

https://www.youtube.com/watch?v=C1ZeBcaEseU?si=OTsplTAD4pm-7UDk

1 Like

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by lawani(m): 8:34pm On Mar 08

Sheuns:
Is 70,000 naira per month a competitive wage if you sell petrol to your people at international prices?

Pms is not sold at international price in Nigeria because production costs are not the same. Price differs from country to country depending on labor costs for refineries.
What I am saying is subsidy is best avoided if only because of the accounting challenges. It creates a big loop hole to steal money. Let everything be business, pay at market rates and also fight for good wages

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by Figger(m): 8:35pm On Mar 08

Yea, like it is in Libya and Algeria, I've been to both countries and I can tell u fuel is cheaper than water.

Sheuns:
The purpose of government is to provide good governance to the people it govern and not make profit.

The federal government if they had a functional refinery are supposed to set aside a certain amount of crude that will cater for local consumption and has to be lower than what they sell to international markets.

That’s what Russia, Saudi Arabia and some other oil producers do.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by emperor4love(m): 8:37pm On Mar 08

Nigerian independent marketer's still import fuel bro after refining and most ships pass through there

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by givedemwotowoto(op): 8:38pm On Mar 08

MemoriesAndMe:
Dangote already stated that it's crude are mainly for export, so only some part of its products will be sold in Nigeria, others will be exported. The straits will affect Dangote and NNPC if ships have to go through that route.

Dangote can refine 650,000 barrels per day. Nigerians consume only about half of that daily so he exports the rest

1 Like

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by PigTormentor: 8:44pm On Mar 08

Ofunaofu:
So the Tinubu-led APC regime’s priority is making more money while the people suffer, and the money isn’t even used judiciously; it gets looted and siphoned.

Tinubu does not determine price of crude oil. Dangote is required to buy oil from the oil companies at international going prices.
Chevron will not sell oil to Dangote at reduced prices when they can sell it for more on open market.
Keep blaming Tinubu for everything.

Re: What Does The Strait of Hormuz Have To Do With Nigeria's Rising Petrol Prices? by givedemwotowoto(op): 8:51pm On Mar 08*

PigTormentor:
Tinubu does not determine price of crude oil. Dangote is required to buy oil from the oil companies at international going prices.
Chevron will not sell oil to Dangote at reduced prices when they can sell it for more on open market.
Keep blaming Tinubu for everything.

Nigeria gets almost 1 million barrels of oil as their own share of daily crude production. They can set their price for the local market for the 327,000 barrels consumed locally daily, and sell the rest 600,000+ at international price. Must you always defend the government?

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