imbless:
This man should go and seat down

otr1:

In your mind now, you're making sense, ain't it?
Ok let's assume we import all the PMS we consume and the landing cost is N160/litre. Let's put consumption at 15,000,000 litres daily. At N40/litre pump price ( N120/litre paid as subsidy), the subsidy payable in a leap year is N658,800,000,000( N658.8 billion). Can you now justify the N971 billion spent last year on subsidy even when we are still buying PMS at N97/litre?

After 16 years of PDP misrule, our refinery are still operation at 16% of installed capacity and it's ok?
GEJ have been there since 2010, what stops him from working on these refineries to at least, work at just 40% capacity even if 19 gallons is what we'll get in a barrel? Don't even talk about vandalism, because militants are being paid to secure the pipelines.
You have no clue. SMH

JustCalMeDBoss:
A simple knowledge of fractional distillation shows that only 42% of gasoline can be gotten from a barrel of oil. For our type of oil. now the US energy information assessment agency clearly states that 19 gallons of gasoline and 12 gallons of diesel can be gotten from a barrel of oil. Bloomberg also states nigeria can only meet 16 percent refining capacities of its domestic needs which a large percentage is lost to vandalism and depends on importation for over 70% of its domestic needs.

Every body wants to be an economist now. LOL
Buhari the miracle worker. But let him start with Oando because we know tinubu has a large share there.

http://www.bloomberg.com/news/articles/2014-12-23/oil-s-slump-gives-nigeria-chance-to-end-7-billion-fuel-subsidy


http://www.eia.gov/tools/faqs/faq.cfm?id=327&t=9

http://www.petroleum.co.uk/refining

otr1:

We're not testing an hypothesis here my friend.
He wasn't assuming anything. He was just stating the facts.
Of what use is "a priori" when proving that Bachelors are not married?

pheliciti:

He says 42 liters and you state 19 gallons. 19 gallons is still more than 42 liters so what's the point you are trying to make? Please read you post again.

VolvoS60:


^^^^
The issue I have with your analysis above is your silence on costs. Any analysis of petroleum products 'subsidy' is incomplete until the cost of local production (and refining) of a litre of petrol is clearly stated. For several months I have asked here for the true cost of producing and refining a litre of PMS locally (in Nigeria). Most of those who claim to support 'subsidy' removal have shied away from this challenge.

We all agree there is a subsidy on imported PMS sold in Nigerian petrol stations. What has never been fully made clear is whether or not there is a subsidy on locally produced and refined PMS. If there is, how much is it? The supporters of fuel 'subsidy' removal avoid answering the question because of the fresh questions that will be raised if indeed there is no subsidy on locally produced PMS: if indeed there is no subsidy on locally produced PMS then why have new refineries not been built by the government? Why should Nigeria import refined petroleum products in the first place?

On a slightly related note - the Bloomberg article you cited has a quote attributed to Mrs Okonjo - Iweala - she is quoted as saying that a US$60 per barrel price represents a 'break even'point at which there is no longer a subsidy. Hasn't that price limit been crossed?

Elcapo:

Ooh really?!
He wasn't assuming anything as a-priori Į̸̸̨§ not based on assumption anyway,
He just proved a theory mathematically and a priori Į̸̸̨§ obviously based on "all things being equal" or whn an outcome Į̸̸̨§ against the all possible odds.
"Just incase"

JustCalMeDBoss:


So landing cost is actual pump price in ur dictionary abi. what of cost of transportation to various location around the country that even includes cost of transportation to tank farms, security an so many oda cost. look who is clueless. When for example its far more cheaper to bring 10,000 tonnes of rice from thailand than to bring the same quantity from the north. The problem with ppl like you is that they want to be told cinderella stories. And we are not saying the industry should not be sanitized but let the sanitation go round. because so many of the so called APC chieftains are been paid these saubsidies moni.

TheGoodJoe:


When you start by calling a Former Petroleum minister and economic illiterate, you are bound to miss a point.

First of all, during Subsidy, no marketer is forced to sell below his planned price. The government pays him money to balance his profit target and sell it at a reduced price.

For instance, if he plans to sell at #150, the government pays him #60 so that he can sell it at #90 and regain his profit.

Secondly, we are talking of Subsidy on locally refined products. So your analogy of an investor does not hold because the Federal Government's owned body, NNPC refines the product,

otr1:

Just read the rubbish you posted all over again. Does it even make sense to you?
You need some hot slaps to restore your senses for calling DW an Economics illiterate

grandstar:


And wht do you mean by subsidy on locally refined products? If the government is offered $80 for each barrel but its forced to sell at $30 a barrel which is cost price (assuming), that means it loses $50 per barrel.

Multiply this by 400,00 barrels and you have $20m a day forgone by government. Thats a lot of subsidy.

What you dont seem to understand is that the government needs that money . They are tired of losing it.

NNPC is in joint venture with private oil companies to produce crude oil which it buys at market rates for its refineries.

grandstar:
[s]Listen up guys and listen good! Tam David West is an economic illiterate

When a company wants to carry out machinery valuation, who do they call-An estate valuer or an engineer? Interestingly, they do not call an engineer. Its an estate valuer they call.

You may wonder why? Because value of a product is determined by the Law of demand and supply or simply put, market forces. If you have ever bought a sachet of pure water for 50naira in a monstrous traffic jam, you'll know what I mean.

Or alternatively, have you ever tried to dispose of your own item and found out that what you are being offered is usually less than your ideal value?

Tam David West here is speaking about cost of production and not value. Based on cost of production, yes there is no subsidy. But based on market value, there is.

No company in its right mind will invest hundreds of millions of dollars or even billions into producing oil if the sale price is based on the cost of production. Not a penny will be invested. No bank will ever extend money to such a venture!

Do you know that the market value can at times be less than the cost of production? It has happened several times. Why do you think that Saudi Arabia refuses to reduce the quantity of oil it produces. It wants there to be a glut so as to drive down price of crude oil to make it unprofitable for the Americans oil producers operating in the United States who have a very high cost of production.

If the market price is $80 and the FG is compelled to sell at say a cost of production price of $30 in order for the price to be 87naira, that means the government subsidizes it by $50 a barrel.

If you are a restaurant and the price for a plate of rice with chicken is N300 and you are compelled to sell at N150 which is your cost price, you are subsidising it by N150. If you sell 100 plates at 150, you are losing 150[/s].

Keneking:
Jonathan has been scamming Nigerians since 2010.

How long would it cost to build a detention centre for male and female..maybe 6-8weeks. Can we identify a location? Maybe Zamfara state (Sharia State). I support we build this facility there immediately from June 2015.

Just imagine the fraud..I agree with this analysis even we apply an error level of 10% the difference would still be humongous.

Anyone who does not agree with this should put on his gloves and bounce out......

adino:
It is simple the CLUEFOOL one ( olodo general) should appoint Tam David West as new petroleum minister and petrol automatically turns N40 per litter. CASE CLOSED.

otr1:

You're making no sense. You're just sounding like a broken record, claiming to be intelligent. Are we not paying subsidy based on the landing cost of the product? For your information, the pump price is the regulated price after paying subsidy and it should never be higher than the landing cost. I've just proven to you that with N971.1 billion spent on subsidy last year, we could still set the pump price at N40/litre, even if the landing cost is N160/litre and the transportion cost being N20/litre (going by your analogy of transport cost). I even over estimated everything, from the total consumption, to the landing cost.
Why are we buying fuel at N97/litre when the amount we pay on subsidy should give us N40/litre?
I don't care whose ox is gored, this subsidy fraud must stop.

grandstar:
Listen up guys and listen good! Tam David West is an economic illiterate

When a company wants to carry out machinery valuation, who do they call-An estate valuer or an engineer? Interestingly, they do not call an engineer. Its an estate valuer they call.

You may wonder why? Because value of a product is determined by the Law of demand and supply or simply put, market forces. If you have ever bought a sachet of pure water for 50naira in a monstrous traffic jam, you'll know what I mean.

Or alternatively, have you ever tried to dispose of your own item and found out that what you are being offered is usually less than your ideal value?

Tam David West here is speaking about cost of production and not value. Based on cost of production, yes there is no subsidy. But based on market value, there is.

No company in its right mind will invest hundreds of millions of dollars or even billions into producing oil if the sale price is based on the cost of production. Not a penny will be invested. No bank will ever extend money to such a venture!

Do you know that the market value can at times be less than the cost of production? It has happened several times. Why do you think that Saudi Arabia refuses to reduce the quantity of oil it produces. It wants there to be a glut so as to drive down price of crude oil to make it unprofitable for the Americans oil producers operating in the United States who have a very high cost of production.

If the market price is $80 and the FG is compelled to sell at say a cost of production price of $30 in order for the price to be 87naira, that means the government subsidizes it by $50 a barrel.

If you are a restaurant and the price for a plate of rice with chicken is N300 and you are compelled to sell at N150 which is your cost price, you are subsidising it by N150. If you sell 100 plates at 150, you are losing 150.

imbless:
This man should go and seat down

JustCalMeDBoss:


Pls read tam west analysis it is based on pump price. Now when jonathan tried to completely regulate the sector at 2012 u ppl cried fowl. And when an oligarchy controls the sector they can connive with themselves. To manipulate the sector We all want the same thing but the position as always been if the sector is deregulated who gets what. That's wat the opposition has been truly fighting. And I also just pointed out that west assumption that you get 1 barrel of crude oil is 45 gallons is a lie cos u get only 19 gallons The position here is that no one truly knows the operational cost of NNPC refining gasoline. Infact I can show u a punch article where nigerian refining cost increased by almost $8 due to transportation cost by ship of the crude oil instead of with pipelines.

http://www.punchng.com/business/financial-punch/oil-slump-nigerias-crude-refining-to-drop-further/
And believe me there more problems ahead.

grandstar:


What I said about David West was wrong. Anyway, his understanding of economics is poor.

I stand by what I said. A subsidy exist if you bought crude oil at the market price. The difference between the market price and the controlled price is the subsidy. Government is losing huge money daily through this subsidy.

Anyway, a 19th century economist said,"the existence of subsidies can not be divorced from abuse"

It so true, even today!

JustCalMeDBoss:
A simple knowledge of fractional distillation shows that only 42% of gasoline can be gotten from a barrel of oil. For our type of oil. now the US energy information assessment agency clearly states that 19 gallons of gasoline and 12 gallons of diesel can be gotten from a barrel of oil. Bloomberg also states nigeria can only meet 16 percent refining capacities of its domestic needs which a large percentage is lost to vandalism and depends on importation for over 70% of its domestic needs.

Every body wants to be an economist now. LOL
Buhari the miracle worker. But let him start with Oando because we know tinubu has a large share there.

http://www.bloomberg.com/news/articles/2014-12-23/oil-s-slump-gives-nigeria-chance-to-end-7-billion-fuel-subsidy


http://www.eia.gov/tools/faqs/faq.cfm?id=327&t=9

http://www.petroleum.co.uk/refining

wordcat:


Number 9 reads; Let FGN refute the above composition and if not, they should tell us how they come about
N95/N85 litre.

Are you ready to refute the fact?

JustCalMeDBoss:


So landing cost is actual pump price in ur dictionary abi. what of cost of transportation to various location around the country that even includes cost of transportation to tank farms, security an so many oda cost. look who is clueless. When for example its far more cheaper to bring 10,000 tonnes of rice from thailand than to bring the same quantity from the north. The problem with ppl like you is that they want to be told cinderella stories. And we are not saying the industry should not be sanitized but let the sanitation go round. because so many of the so called APC chieftains are been paid these saubsidies moni.

otr1:

In the economics context "a priori" means "it is assumed in advance," or "we had to assume something, and we assumed this, without evidence."
We use it in researchs to eliminate the chance that we might mistake a false hypothesis for a true one and vice versa, and not in simple arithmetics as this.
If you still don't agree, then I give up.

wisewisewise:

ADINO. IT IS ME (WISEWISEWISE) AND MY ENTIRE FAMILY OF MADD DOGG FFUCKERS THAAT ARE OLODOS.
MY SICK FATHER AND SICKKK PUUSY MOTHER. FOOOOL

grandstar:
Listen up guys and listen good! Tam David West is an economic illiterate

When a company wants to carry out machinery valuation, who do they call-An estate valuer or an engineer? Interestingly, they do not call an engineer. Its an estate valuer they call.

You may wonder why? Because value of a product is determined by the Law of demand and supply or simply put, market forces. If you have ever bought a sachet of pure water for 50naira in a monstrous traffic jam, you'll know what I mean.

Or alternatively, have you ever tried to dispose of your own item and found out that what you are being offered is usually less than your ideal value?

Tam David West here is speaking about cost of production and not value. Based on cost of production, yes there is no subsidy. But based on market value, there is.

No company in its right mind will invest hundreds of millions of dollars or even billions into producing oil if the sale price is based on the cost of production. Not a penny will be invested. No bank will ever extend money to such a venture!

Do you know that the market value can at times be less than the cost of production? It has happened several times. Why do you think that Saudi Arabia refuses to reduce the quantity of oil it produces. It wants there to be a glut so as to drive down price of crude oil to make it unprofitable for the Americans oil producers operating in the United States who have a very high cost of production.

If the market price is $80 and the FG is compelled to sell at say a cost of production price of $30 in order for the price to be 87naira, that means the government subsidizes it by $50 a barrel.

If you are a restaurant and the price for a plate of rice with chicken is N300 and you are compelled to sell at N150 which is your cost price, you are subsidising it by N150. If you sell 100 plates at 150, you are losing 150.

PassingShot:


What are you talking?

Have you wondered why PMS per liter in all OPEC economies is way low compared to Nigeria's?

Do yourself a favor and google that fact out and stop writing long epistle unnecessarily.

grandstar:
Listen up guys and listen good! Tam David West is an economic illiterate

When a company wants to carry out machinery valuation, who do they call-An estate valuer or an engineer? Interestingly, they do not call an engineer. Its an estate valuer they call.

You may wonder why? Because value of a product is determined by the Law of demand and supply or simply put, market forces. If you have ever bought a sachet of pure water for 50naira in a monstrous traffic jam, you'll know what I mean.

Or alternatively, have you ever tried to dispose of your own item and found out that what you are being offered is usually less than your ideal value?

Tam David West here is speaking about cost of production and not value. Based on cost of production, yes there is no subsidy. But based on market value, there is.

No company in its right mind will invest hundreds of millions of dollars or even billions into producing oil if the sale price is based on the cost of production. Not a penny will be invested. No bank will ever extend money to such a venture!

Do you know that the market value can at times be less than the cost of production? It has happened several times. Why do you think that Saudi Arabia refuses to reduce the quantity of oil it produces. It wants there to be a glut so as to drive down price of crude oil to make it unprofitable for the Americans oil producers operating in the United States who have a very high cost of production.

If the market price is $80 and the FG is compelled to sell at say a cost of production price of $30 in order for the price to be 87naira, that means the government subsidizes it by $50 a barrel.

If you are a restaurant and the price for a plate of rice with chicken is N300 and you are compelled to sell at N150 which is your cost price, you are subsidising it by N150. If you sell 100 plates at 150, you are losing 150.

Jesusloveyou:
why are u saTANiod so wicked,u mean gej should be using us to trade,making his cronies super rich to our detriment,did u know how much they wil be making in a day,if they sell for even 45naira per litre?they collect 100% profit in our head,they wil stil collect fake subsidy from fg.kero subsidy is worst,fg wil pay 150naira,nnpc wil give dem for 49.50,to sell to us for 50naira,while we stil buy it for 150naira,which fake subsidy corrupt gej de give us.