₦airaland Forum

Is this actually a true analysis:
Okusanya Abimbola Oluseyi wrote,
"At a crude oil price of $47/barrel, import price (cost and freight) of petrol is N64.41/litre (exchange rate of N171.36 advised by PPPRA) and landing cost is N74.41 (inclusive of N1.28 trader's margin). This is lower than the ex-depot price of N81.51 (the difference between the landing cost and the ex-depot price is paid as subsidy). If you add bridging of N5.85, retailer's margin of N4.60 and transporter's margin of N2.99, the total cost is N87.85. Technically, there is no more subsidy on petrol. Analysts predict a fall below $40 before end of Q1. Will our government further reduce the pump price in line with the fall in crude oil price?" Economist, how true is this analysis?

I don't understand sef. Anyway reducee pms price anyhow.

anytin to remove subsidy is welcomed

10naira is insignificant considering the price of fuel in other oil producing country moreover so GEJ administration can reduce the pump price all this while but refused to.
Now they will tell us they have gone to maiduguri and also theyve reduced pump price. I smell desperation in all this moves more importantly its at a wrong time

This is a better analysis than the 1+1 =2 almajiri economics APC has been peddling.

ULSHERLAN:
10naira is insignificant considering the price of fuel in other oil producing country moreover so GEJ administration can reduce the pump price all this while but refused to.
Now they will tell us they have gone to maiduguri and also theyve reduced pump price. I smell desperation in all this moves more importantly its at a wrong time

Which time.

When did oil prices fall

if there is no more subsidy ....then our recurrent expenditure will be more more than 40% lower than other years
..
..and what is the 1.2 trn jona budgeted for subsidy going to be used for

there is no more subsidy...
jona our 1.2 trillion Naira

With the new price of #87 should negate subsidy from our budget.

ULSHERLAN:
10naira is insignificant considering the price of fuel in other oil producing country moreover so GEJ administration can reduce the pump price all this while but refused to.
Now they will tell us they have gone to maiduguri and also theyve reduced pump price. I smell desperation [/b]in all this moves more importantly its at a [b]wrong time

...indeed my brother.

eaglechild:
Which time.

When did oil prices fall

do you know how much they sell a barrel of oil now

mrvitalis:
if there is no more subsidy ....then our recurrent expenditure will be more more than 40% lower than other years
..
..and what is the 1.2 trn jona budgeted for subsidy going to be used for

adaweezy:
there is no more subsidy...
jona our 1.2 trillion Naira

Higher oil price = more revenue = more money spent on subsidy
Lower oil price = less revenue = less money spent on subsidy.
You see the pattern? The 1.2 trillion Naira was based on the calculation that crudde oil price will be around $65 per barrel, with the price below $50 the 1.2 trillions Naira doesn't come to play.

OP, I think you are close

jammyunn:
Is this actually a true analysis:
Okusanya Abimbola Oluseyi wrote,
"At a crude oil price of $47/barrel, import price (cost and freight) of petrol is N64.41/litre (exchange rate of N171.36 advised by PPPRA) and landing cost is N74.41 (inclusive of N1.28 trader's margin). This is lower than the ex-depot price of N81.51 (the difference between the landing cost and the ex-depot price is paid as subsidy). If you add bridging of N5.85, retailer's margin of N4.60 and transporter's margin of N2.99, the total cost is N87.85. Technically, there is no more subsidy on petrol. Analysts predict a fall below $40 before end of Q1. Will our government further reduce the pump price in line with the fall in crude oil price?" Economist, how true is this analysis?

Please educate them O, because they are as illiterate as Buhari that want to use the army to stabilize the pump price of fuel.

Let me do some calculations

Average crude oil price in the last one month
Dec 2014 = $60.70 (www.ycharts.com/indicators/average_crude_oil_spot_price)
This is -21.16% from previous month ($76.99)

Average crude oil price in the last one year = $105.48

Old PMS price with partial subsidy = N97
Old PMS price without subsidy - N138/N140, but let's assume it's = N138

Actual oil price at $105.48 = N138 PMS (without subsidy)
New oil price at $60.70 = (60.70/105.48)^138 = N79.41 ~ N80.

Without subsidy, PMS price should be about N80.

However, let's assume because of the fluctuations in price, we can allow for 20% fluctuation.

This implies,
Fluctuation allowance = 0.2*N80 = N16

Actual PMS price without subsidy = N80 + N16 = N96

To allow for some partial subsidy of say N9 per liter,

This implies,
Current PMS Price = N96 - N9 = N87.

*This doesn't put into consideration the recent devaluation of our naira.

My assumptions sha.

I hope there is no kobo budgeted for subsidy in this year's bill

Stop the lies!

Teacher: When crude oil was N119 per barrel, we
buy petrol for N97 per litre
Now that crude oil is N49 per barrel with all other
things being equal, what is the expected price of
petrol per litre?
Jonathan: N87.
Teacher: Pls who award PhD to this man who
doesn't know simple arithmetic?
Teacher: buhari what is d answer?
Buhari: sir, za only items zat change is frice, so
our change formular is;
Ip N119 changed to N49
zen N97 will CHANGE to N27
Teacher: But they said u don't have certificate?
Buhari: kai teasher it's a simfle arithmetic, even women for
market can solbe it.
Teacher: Chai chai..... we need CHANGE
GMB TILL 2023
#GMB/OSINBADE change osheeeey

At all, at all na witch. I go manage #87. But...

Collynzo9:
Higher oil price = more revenue = more money spent on subsidy
Lower oil price = less revenue = less money spent on subsidy.
You see the pattern? The 1.2 trillion Naira was based on the calculation that crudde oil price will be around $65 per barrel, with the price below $50 the 1.2 trillions Naira doesn't come to play.

The paramount factor is the price used as bench mark for the preparation of the budget.