₦airaland Forum

The government spends about N2tn yearly on fuel subsidies, the Group Managing Director, Nigerian National Petroleum Corporation, Dr. Joseph Thlama Dawha, said at a recent conference.

The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said, “Petroleum subsidy on refined petroleum products will decline from N2tn by almost 30 per cent.”

He noted that oil price fall was already having a negative effect on revenues, stating that revenues could decline in the third quarter of the year to $6.1bn from $8.84bn in the second quarter.

An energy specialist at Ecobank, Mr. Dolapo Oni, noted, in an emailed response to enquiries from our correspondent, that falling oil prices impact directly on the landing costs of petrol in Nigeria.

According to data from the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol as of November 3, 2014 is N127.57 per litre and subsidy of N44.94 per litre.

Oni said, “As of November 3, Brent was still $85. However, Brent has fallen to $78 and landing costs are now around N113/litre. The subsidy element is also around N31 (when you add in margins). If prices fall below $70 to about $65 per barrel, we could see a situation where the government is no longer having any subsidy to pay.

“But the trade-off is still negative from the perspective of how much revenue we lose from sale of crude oil versus expenditure on fuel subsidies. We could lose a minimum of $10bn in crude oil revenue if prices fall to $65 on the average in 2015 but save $8-9bn in fuel subsidies. So, we end up with a loss still.”

Source: http://www.punchng.com/business/business-economy/fuel-subsidy-to-reduce-by-n600bn/

How much is Dangote planning to use in building his 500,000b/d capacity refinery? Dangote said he had agreed on a $3.3 billion loan with 12 Nigerian and foreign lenders to build the refinery as well as a petrochemical and fertilizer complex costing a total of $9 billion.

Na all this things I dey see wey make I go France

I wonder if the amount paid on subsidy will reduce now that oil prices have reduced

nwanna89:
I wonder if the amount paid on subsidy will reduce now that oil prices have reduced

The amount is just a fixated fraud that started immediately Jonathan became President.

In 2009 this country paid 291 billion naira as subsidy for
petroleum products. By 2011, this number had jumped to 2.7
trillion naira.

Did we start consuming 10 times as much petrol? Do we have
10 times as many cars? Did the population of Nigeria
multiply 10 times?

Abagworo:
The amount is just a fixated fraud that started immediately Jonathan became President.

In 2009 this country paid 291 billion naira as subsidy for
petroleum products. By 2011, this number had jumped to 2.7
trillion naira.

Did we start consuming 10 times as much petrol? Do we have
10 times as many cars? Did the population of Nigeria
multiply 10 times?

Diezani the froggy eyed thief from Bayelsa is the brains behind the fraud. They are all working to rip the country bare to the bones

Countries are reducing the pump price of fuel, diesel worldwide, ours still remain same.

The sooner people realize GEJ is a fraud the better they will know the country will not continue this way and still survive. Nigeria is on mortgage

Best crude prices in 5 years yet lowest foreign.reserve, lowest amount in the excess crude account , biggest foreign loan since OBJ paid off the Paris club, massive infrastructure decay, no power, no roads, no quality schools, dead public health systems, Nigerians need to wake up to the reality.

Why are people in that country blind to the broad day corruption in the country?

No country in the whole wide world that has oil and still import refined products except...Nigeria. What a shame?