₦airaland Forum

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

Look my issue is with our polity (structured institution):

1. It's possible they have pled 6 months ahead base of OPEC quota to sell all crude extracted to the global market and global price.

This means Dangote would still have to buy crude from international markets. Then it's simple to understand the increase.

2. Why shouldn't local consumption be prioritized and crude given to Dangote from NNPC at extraction cost?

This would mean global events won't touch us and we could care less.

3. NNPC has four or three big refineries and none is functional enough to address national demand.

Who do us like this?

I tell you my brother our way of taking decisions has brought us to the precarious situation we're in today. It doesn't even make sense to me.

nairalanda1:
UK that subsidize health care and education ( which ironically the Nigerian government also subsidizes, otherwise hospital operations would be costing in the tens of millions)...their citizens also pay massive taxes for the privilege

Taxes which if they bring them to Nigeria people would be protesting massively.

The problem with subsidy in Nigeria is that most of our revenue comes from oil and borrowing. Oil money has never been enough for all of us. Unless you want to pretend that 2million bpd is enough for 230 million, and even if we were 100 million it won't be enough at all.

If subsidy came back now, we would eventually reach the same point we were in 2014 where there was borrowing to pay for salaries simply because subsidies were eating government revenue badly. There was a good reason why subsidy should have gone in 2012. You guys refused to cooperate then so here we are.

Thanks to years of subsidy, we are in severe debt. That means that any windfall goes to paying off that debt . And bringing back subsidy would worsen the debt as is.

Unless you want the kind of tax rates they pay in the UK, Nigeria cannot afford subsidy.

I didn't say corruption doesn't exist. It does. I am also not defending any of your corrupt leaders. I am pointing out why subsidy would be a bad idea financially for us. And yes, bad decisions by your leaders and the corruption implicit in consumption subsidies led us here. There are good reasons to vote out apc in 2027.

Unless you want us to go back to what buhari was doing, printing money to pay for the thing , which landed us in even more debt.

Lies lies lies..24/7 lies….
Baba this tax excuse is stale..
The number of people looting revenue is the problem….the evidence is clear….

It has because once there is scarcity the international price of crude oil will go up just like in economics the higher the demand the higher the price. Nigeria as a Nation is making more revenue but Dangote is buying crude oil at higher price so he too will also increase his price which will surely have negative impact on pump price this is where subsidy would have been better because Nigeria as a Nation is making more money from the sales of crude oil.

advanceDNA:
Lies lies lies..24/7 lies….
Baba this tax excuse is stale..
The number of people looting revenue is the problem….the evidence is clear….

You want me to tell you sweet lies?

Look, forget politics, apc, pdp, etc....subsides are not that easy to pay. Countries that subsidise everyone pay heavy tax rate for the thing. See Nigeria where most revenue comes from oil, and even without corruption, even assuming there was no corruption the oil money is not enough.

The problem with our leaders is not just corruption, it is that they are not making enough money for the treasury. And yes, it is not just by taxation, it is by also changing the basis of our economy...and so long as most government revenue comes from oyel, nothing will change.

nairalanda1:
You want me to tell you sweet lies?

Look, forget politics, apc, pdp, etc....subsides are not that easy to pay. Countries that subsidise everyone pay heavy tax rate for the thing. See Nigeria where most revenue comes from oil, and even without corruption, even assuming there was no corruption the oil money is not enough.

The problem with our leaders is not just corruption, it is that they are not making enough money for the treasury. And yes, it is not just by taxation, it is by also changing the basis of our economy...and so long as most government revenue comes from oyel, nothing will change.

Subsidies are not easy to pay because there are too many looters….. its that simple….

Ur leaders are making enough money…thats why they steal…..if the money isnt enough the theft wont be this high… how can one person steal over 300billion. Someone thats not even part of the executives….. do u realize more than half of abaha’s loot is still in the wind ??

nigeria has never been structured to truly care for all its citizens….
We dont pay child wafare
Disability welfare
Senior citizens welfare,
We dont fund research
We dont provide water
We dont subsidize anything anymore which is one if the reasons cost of most things is high to the roof..
Go and look at schools and hospitals no maintenance, facilities have crumbled… hospital board have to come exploit patients to manage their clinics

All govt proudly does is pay salary, construct some road and round about which are all embezzlement pits.. then we play small religious politics by funding mosque and hajj trips…..
If u doubt me, listen to fct minister,, salary paid is what he uses as yardstick as to why pple shouldn't complain….he still said it last month..” we are not owing any one salary, so they have no reason to complain”… the opposition are the ones fuelling the complains “

advanceDNA:
Subsidies are not easy to pay because there are too many looters….. its that simple….

Ur leaders are making enough money…thats why they steal…..if the money isnt enough the theft wont be this high… how can one person steal over 300billion. Someone thats not even part of the executives….. do u realize more than half of abaha’s loot is still in the wind ??

nigeria has never been structured to truly care for all its citizens….
We dont pay child wafare
Disability welfare
Senior citizens welfare,
We dont fund research
We dont provide water
We dont subsidize anything anymore which is one if the reasons cost of most things is high to the roof..
Go and look at schools and hospitals no maintenance, facilities have crumbled… hospital board have to come exploit patients to manage their clinics

All govt proudly does is pay salary, construct some road and round about which are all embezzlement pits.. then we play small religious politics by funding mosque and hajj trips…..
If u doubt me, listen to fct minister,, salary paid is what he uses as yardstick as to why pple shouldn't complain….he still said it last month..” we are not owing any one salary, so they have no reason to complain”… the opposition are the ones fuelling the complains “

No, subsides are not easy to pay because we are not making enough money in the first place.

The stealing that happens makes the matter worse (that's why most people are in favor of the 'Ghanaian solution' or 'chinese solutuon' to the corruption issue here).

If Nigeria were to try to subsidise fuel now, not only would most of the windfall be used to pay for it, but we would end up spending billions of money we don't even have.

Right now, a subsidy would eat over two thirds of our revenue from oyel. I wish I was lying...

Better face reality. You guys shout 'UK does subsidy' but you don't want to pay UK taxes to keep subsidy.

Forget APC, PDP, LP etc....money no dey for the kind of subsidy you want.

Sheuns:
Oil prices never got to $145 under Obj. Stop the lies.

It did. Google is your friend. Abi make we bet??

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.

The crisis in the middle east has raised the price of crude oil. Dangote buys crude oil @ international price rate. Imagine buying at $70 and all of a sudden its $100. Prices of refined product will change. Even in US and Europe, petrol prices have increased. As for strait of Hormuz, it's a major passage for movement of goods because it's the short cut to Asia. If ships are stranded and cannot pass through, the other alternative is to take a longer route thereby increasing the cost of Freight and insurance. This is causing added pressure to oil prices.

givedemwotowoto:
If your friends pay you a lot of taxes on their personal and business income, pay VAT for what they buy from your stores, pay multiple taxes and fees for even bank transactions……..

then yes you sell petrol lower to them if they consume only 20% of your crude oil output, if that petrol is one of the most essential things they need in the country to be productive.

This is common sense.

Naivety, Are you saying Nigerians pay more taxes compared to its neighbours? Sometimes it is better to keep mute.

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 have answered everything. If prices go up
internationally, all crude producing nations must join the new price. This is a law under OPEC oil rules.

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.

The issue of Canada exporting their crude to the US has been debunked many times. It's just not true. The US too can't process heavy crude fully and can't store it either cos of leakage, why th y are not taking Venezuelan oil to store.
Also Canada doesn't need to US to process their crude.

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

Weak reasoning.

Yusufisraelj:
Look my issue is with our polity (structured institution):

1. It's possible they have pled 6 months ahead base of OPEC quota to sell all crude extracted to the global market and global price.

This means Dangote would still have to buy crude from international markets. Then it's simple to understand the increase.

2. Why shouldn't local consumption be prioritized and crude given to Dangote from NNPC at extraction cost?

This would mean global events won't touch us and we could care less.

3. NNPC has four or three big refineries and none is functional enough to address national demand.

Who do us like this?

I tell you my brother our way of taking decisions has brought us to the precarious situation we're in today. It doesn't even make sense to me.

I want to clarify on your point 2 that Nigeria doesn’t have any extraction cost. The deal is, the oil company explores oil with their expertise and equipment. When they get the oil, they take 40% of the crude oil as compensation for using their equipment and money to explore and drill. Since oil belongs to Nigeria, Nigeria takes 60% of the crude. Each party can do whatever they want with their share of crude oil.

Since over 1.6million barrels is produced daily, Nigeria gets almost 1 billion barrels daily. They spent 0 to produce this oil.

It’s just like you have an unused farmland and a farmer says, since you’re not farming on the land, let me farm and we share the proceeds of the harvest. You take 60%, I take 40% to take care of my own labor and equipment.

Our budget benchmark is $50 which is way below current price of crude. Since our local consumption is 327,000 barrels daily, even if we sell at $50 to Dangote for him to sell like N800 to the local population, we’re still doing very great. We still have 600,000+ barrels to sell at the global oil price

success1smyn:
Crude oil is a global commodity and its price is determined globally. A country can decide to refine it and sell it at any price to its citizens, and when it is sold below the actual cost, it means it is subsidized.
Subsidy in itself is not a bad thing, but there are several factors to consider, such as the population, how much oil the country produces, and the country's dependence on oil.
The reason fuel subsidy does not make much sense in Nigeria is that we are too dependent on oil and our population is very high compared to what we produce. This means we would end up using a large portion of our oil revenue to maintain the subsidy, leaving us with less money to do many other important things.

Reserving some part of what you have in your backyard for your family consumption and selling the excess is not subsidizing.

callthefred:
It did. Google is your friend. Abi make we bet??

Bring your facts. Crude oil never sold for $145 at any time during Obj’s tenure as both president and head of state.

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.

Oga, you need to broaden your horizon!
Firstly, the petroleum industry in Nigeria is mostly joint venture. Most of the deep sea well are on PSC with Nigeria getting 20% while the multinationals get 80/%. Now if price rises internationally, these multinationals expect to reap from this rise in price. Are you saying Nigeria will subsidies them or force them to sell their share at controlled rates?
Secondly, most of Nigeria crude oil is encumbered! What that means is that Nigeria gets nothing from them. Unencumbered crude oil is not even up to 50% of production. So where does Nigeria get the crude for Dangote refinery?

Thats corruptionfightingback

nairalanda1:
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.

Cromagnon:
Simple question you begin de rigmarole
Are you doing business or welfare

Corruption fighting back

APC people will never see the truth in this. They'll only be praising Tinubu for fuel increase...

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

That's where the leadership stupidity of this country lies. Something that is found beneath the ground here in Nigeria we want to sell it at a higher price to a son of the soil because they're not happy he built a refinery. America won't do this if they had crude flowing from their ground. They will sell cheaper to citizens who build refineries in the country and sell higher to other countries. Our own thing dey always go left left

lawani:
The government will make more money because they are now selling oil above the budget benchmark. It means it will be easier to pay debts and finance the budget.

At the expense of the poor masses abi? With this suffering and hardship?

Mrtaye:
Thats corruptionfightingback

Well, you obviously have never run a business, that's why you are making such a comment.

Till then..

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.

it's world politics and Nigeria won't dear to not follow up or they will come for us.

We are still very much a slave to this world power

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

so what happens to using some part of the higher profit from export sales as subsidy for products imported

madskills:
so what happens to using some part of the higher profit from export sales as subsidy for products imported

If you are producing something, will you consume it free? Subsidy is best avoided, it is better to structure your economy so that citizens can afford what they need rather than having subsidies. There is also an accounting challenge in subsidy and it opens a loophole for stealing. There are many countries with more oil per Capita than Nigeria who don't do subsidy

lawani:
If you are producing something, will you consume it free? Subsidy is best avoided, it is better to structure your economy so that citizens can afford what they need rather than having subsidies. There is also an accounting challenge in subsidy and it opens a loophole for stealing. There are many countries with more oil per Capita than Nigeria who don't do subsidy

You have an unused farmland, and a farmer comes and agrees with you to farm on the land and share proceeds with you in the ratio of 60 (You) and 40 (them).

When you get your own share (60%), how much did it cost you to produce?

Tell me exactly how much Nigeria invested in oil production to warrant the subsidies you’re confidently mentioning all over this thread.

givedemwotowoto:
You have an unused farmland, and a farmer comes and agrees with you to farm on the land and share proceeds with you in the ratio of 60 (You) and 40 (them).

When you get your own share (60%), how much did it cost you to produce?

Tell me exactly how much Nigeria invested in oil production to warrant the subsidies you’re confidently mentioning all over this thread.

Production costs are not constant and they are offset by joint venture cash calls. Both parties pay for it. Right now, the right thing is to stick with no subsidy. Enter bus if you can't fuel your car and any excess money the government has should be used to develop other sectors of the economy

lawani:
Crude oil like cocoa, groundnuts, coffee or cassava etc are traded internationally. Their prices are international. There might be slight variations though according to grade and etc

Explain more as to why other prices of export products are still same and why that of petrol is increasingly,

Remember majority of our crude a sweet light, which when refined, can give them more money than how much they buy is,

Again can you kindly tell me why oil Price should increase here in Nigeria, when the price fall it increases here, and when it increases, it also increases here, can you explain that kindly

lawani:
If you are producing something, will you consume it free? Subsidy is best avoided, it is better to structure your economy so that citizens can afford what they need rather than having subsidies. There is also an accounting challenge in subsidy and it opens a loophole for stealing. There are many countries with more oil per Capita than Nigeria who don't do subsidy

makes sense

madskills:
makes sense

i forgot to factor in kwarruption

do4luv14:
Explain more as to why other prices of export products are still same and why that of petrol is increasingly,

Remember majority of our crude a sweet light, which when refined, can give them more money than how much they buy is,

Again can you kindly tell me why oil Price should increase here in Nigeria, when the price fall it increases here, and when it increases, it also increases here, can you explain that kindly

Not all commodities have a large amount of it passing through the strait of Hormuz. Oil is the main commodity in that category.

When crude oil price increases internationally then there is no reason why pms price will not increase. Do I think pms can be sold in Nigeria at less than 600 even now? Yes but you can't tell a private company how much to sell. The sector is deregulated, therefore the market forces will determine the price