₦airaland Forum

jpphilips:
You really wanna divert products in a Buhari's administration? ?

Genius100:
I took you serious at first as you came across as an industry expert but certain aspects of your submission are so nonsensical, I now question your entire submission. Your submission that Dangote was going to tear down the refineries to stack cement is so dumb, I can't understand how an educated person can make such a statement. Why the hell will Dangote pay millions of dollars for a refinery only to tear it down to build a cement factory? The fact that Dangote is now building a brand new refinery confirms that he really was trying to refine. The truth is that OBJ got it right by selling 51% equity of the refineries. The government cannot adequately maintain the refinery and it needs to sell some of the equity and hand over the operational arm to the private sector.

Second, your claim that Sanusi failed as a CBN governor completely proves that you are a clown. I really can't take you or anything you've written seriously...

Like you said, it doesn't make sense to you because you had no idea what the plan was, Yaradua was not stup!d afterall, this is what I will bet you, it will take you 5yrs to snap out of the lies you were told in 2012.

Read from the first page, people continue circulating Jonathan's lies, I feel sorry for you guys.

Let me ask you, where would Dangote get the crude to refine in 2005? because
I know where he is gonna get crude in 2017 when his refinery will be ready.

Most times it is better to keep some opinion to yourself because you never can tell if the other person is seeing what you are not seeing.

I don't care what an ignorant person think of my opinion, Sanusi can be your God for all I care.

Sanusi that told you that without a total subsidy removal that the economy will collapse, we are yet to see that happen with a partial removal

Sanusi that Managed UBA and UBA was the only old generation bank acquired by a new generation bank during the consolidation exercise.

Sanusi that told you that Your banks are featherlite yet the Nigerian banks he inherited was the first multinational institution in Nigeria even the NNPC after over 30yrs of operation are yet to cross seme border, meanwhile GTB is in Gambia and Sierra leone.

Sanusi who told you that the share holders funds were eroded due to mismanagement, till date he is yet to admit the effect of the Economic melt down on the Nigerian banks, when asked to present his evidence, he published list of bank debtors with oil and gas exposure
He opted to bail them out exactly what other countries did to mitigate the effect of economic melt down in their countries.

Sanusi who claimed $46b was missing, reverted to $12b then $20b, is that the man you take seriously in your life?
How are we sure you are a serious person yourself, Sanusi is a walking confusion, failure is an understatement.


Imagine if we don't have ignorant people like you, where lies the fun!!

989900:
December 10, 2011, if you stopped at the Mobil filling station on Old Aba Road in Port Harcourt , you would be able to buy a litre of petrol for 65 naira or $1.66 per gallon at an exchange rate of $1/N157 and 4 litres per gallon. This is the official price. The government claims that this price would have been subsidized at N73/litre and that the true price of a litre of petrol in Port Harcourt is N138/litre or $3.52 per gallon.

They are therefore determined to remove their subsidy and sell the gallon at $3.52. But, On December 10, 2011, if you stopped at the Mobil Gas station on E83rd St and Flatlands Avenue in Brooklyn, New York, USA, you would be a able to buy a gallon of petrol for $3.52/gallon. Both gallons of petrol would have been refined from Nigerian crude oil. The only difference would be that the gallon in New York was refined in a US North East refinery from Nigerian crude exported from the Qua Iboe Crude Terminal in Nigeria while the Port Harcourt gallon was either refined in Port Harcourt or imported. The idea that a gallon of petrol from Nigerian crude oil cost the same in New York as in Port Harcourt runs against basic economic logic. Hence, Nigerians suspect that there is something irrational and fishy about such pricing. What they would like to know is the exact cost of 1 litre of petrol in Nigeria .

We will answer this question in the simplest economic terms despite the attempts of the Nigerian government to muddle up the issue. What is the true cost of a litre of petrol in Nigeria ? The Nigerian government has earmarked 445000 barrel per day throughput for meeting domestic refinery products demands. These volumes are not for export. They are public goods reserved for internal consumption. We will limit our analysis to this volume of crude oil. At the refinery gate in Port Harcourt, the cost of a barrel of Qua Iboe crude oil is made up of the finding /development cost ($3.5/bbl) and a production/storage /transportation cost of $1.50 per barrel.

Thus, at $5 per barrel, we can get Nigerian Qua Iboe crude to the refining gates at Port Harcourt and Warri. One barrel is 42 gallons or 168 litres. The price of 1 barrel of petrol at the Depot gate is the sum of the cost of crude oil, the refining cost and the pipeline transportation cost. Refining costs are at $12.6 per barrel and pipeline distribution cost are $1.50 per barrel. The Distribution Margins (Retailers, Transporters, Dealers, Bridging Funds, Administrative charges etc) are N15.49/litre or $16.58 per barrel. The true cost of 1 litre of petrol at the Mobil filling station in Port Harcourt or anywhere else in Nigeria is therefore ($5 +$12.6+$1.5+$16.6) or $35.7 per barrel . This is equal to N33.36 per litre compared to the official price of N65 per litre. Prof. Tam David West is right. There is no petrol subsidy in Nigeria . Rather the current official prices are too high. Let us continue with some basic energy economics.

The government claims we are currently operating our refineries at 38.2% efficiency. When we refine a barrel of crude oil, we get more than just petrol. If we refine 1 barrel (42 gallons) of crude oil, we will get 45 gallons of petroleum products. The 45 gallons of petroleum products consist of 4 gallons of LPG, 19.5 gallons of Gasoline, 10 gallons of Diesel, 4 gallons of Jet Fuel/Kerosene, 2.5 gallons of Fuel Oil and 5 gallons of Bottoms. Thus, at 38.2% of refining capacity, we have about 170000 bbls of throughput refined for about 13.26 million litres of petrol, 6.8 million litres of diesel and 2.72 million litres of kerosene/jet fuel.

This is not enough to meet internal national demand. So, we send the remaining of our non-export crude oil volume (275000 barrels per day) to be refined abroad and import the petroleum product back into the country. We will just pay for shipping and refining. The Nigerian government exchanges the 275000 barrels per day with commodity traders (90000 barrels per day to Duke Oil, 60000 barrels per day to Trafigura (Puma Energy), 60000 barrels per day to Societe Ivoirienne de Raffinage (SIR) in Abidjan, Ivory Coast and 65000 barrels per days to unknown sources) in a swap deal. The landing cost of a litre of petrol is N123.32 and the distribution margins are N15.49 according to the government. The cost of a litre is therefore (N123.32+N15.49) or N138.81 . This is equivalent to $3.54 per gallon or $148.54 per barrel. In technical terms, one barrel of Nigerian crude oil has a volume yield of 6.6% of AGO, 20.7% of Gasoline, 9.5% of Kerosene/Jet fuel, 30.6% of Diesel, 32.6% of Fuel oil / Bottoms when it is refined.

Using a netback calculation method, we can easily calculate the true cost of a litre of imported petrol from swapped oil. The gross product revenue of a refined barrel of crude oil is the sum of the volume of each refined product multiplied by its price. Domestic prices are $174.48/barrel for AGO, $69.55/barrel for Gasoline (PMS or petrol), $172.22/barrel for Diesel Oil, $53.5/barrel for Kerosene and $129.68/barrel for Fuel Oil. Let us substitute the government imported PMS price of $148.54 per barrel for the domestic price of petrol/gasoline. Our gross product revenue per swapped barrel would be (174.48*0.066 +148.54*0.207+172.22*0.306+ 53.5*0.095+129.68*0.326) or $142.32 per barrel. We have to remove the international cost of a barrel of Nigerian crude oil ($107 per barrel) from this to get the net cost of imported swapped petroleum products to Nigerian consumers. The net cost of swapped petroleum products would therefore be $142.32 -$107 or $35.32 per barrel of swapped crude oil. This comes out to be a net of $36.86 per barrel of petrol or N34.45 per litre.

This is the true cost of a litre of imported swapped petrol and not the landing cost of N138 per litre claimed by the government. The pro-subsidy Nigerian government pretends the price of swapped crude oil is $0 per barrel (N0 per litre) while the resulting petroleum products is $148.54 per barrel (N138 per litre). The government therefore argues that the “subsidy” is N138.81-N65 or N73.81 per litre. But, if landing cost of the petroleum products is at international price ($148.54 per barrel), then the take-off price of the swapped crude oil should be at international price ($107 per barrel). This is basic economic logic outside the ideological prisms of the World Bank. The traders/petroleum products importers and the Nigerian government are charging Nigerians for the crude oil while they are getting it free.

So let us conclude this basic economic exercise. If the true price of 38.2% of our petrol supply from our local refinery is N33.36/litre and the remaining 61.8% has a true price of N34.45 per litre, then the average true price is (0.382*33.36+0.618*34.45) or N34.03 per litre. The official price is N65 per litre and the true price with government figures is about N34 per litre (even with our moribund refineries).

There is therefore no petrol subsidy. Rather, there is a high sales tax of 91.2% at current prices of N65 per litre. The labor leaders meeting the President should go with their economists. They should send economists and political scientists as representatives to the Senate Committee investigating the petroleum subsidy issue. There are many expert economists and political scientists in ASUU who will gladly represent the view of the majority. The labor leaders should not let anyone get away with the economic fallacy that the swapped oil is free while its refined products must be sold at international prices in the Nigerian domestic market.

The government should explain at what price the swapped crude oil was sold and where the money accruing from these sales have been kept. We have done this simple economic analysis of the Nigerian petroleum products market to show that there is no petrol subsidy what so ever. In the end, this debate on petrol subsidy and the attempt of the government to transfer wealth from the Nigerian masses to a petrol cabal will be decided in the streets. Nigerian workers, farmers, students, market women, youths, unemployed, NGO and civil society as a whole should prepare for a long harmattan season of protracted struggle. They should not just embark on 3 days strike/protests after which the government reduces the hiked petroleum prices by a few Nairas. They must embark upon in a sustainable struggle that will lead to fundamental changes. Let us remove our entire political subsidy from the government and end this petroleum products subsidy debate once and for all. It is time to bring the Arab Spring south.

Izielen Agbon Izielen Agbon writes from Dallas, Texas. izielenagbon@yahoo.com

He is former HOD , Petroleum Eng Dept, former ASUU chairman University of Ibadan, trained many operators in nation's energy industry with pratical experience on our practices and policy focus in the last 20yrs

http://saharareporters.com/2011/12/15/real-cost-nigeria-petrol-dr-izielen-agbon

jpphilips:
Like you said, it doesn't make sense to you because you had no idea what the plan was, Yaradua was not stup!d afterall, this is what I will bet you, it will take you 5yrs to snap out of the lies you were told in 2012.

Read from the first page, people continue circulating Jonathan's lies, I feel sorry for you guys.

Let me ask you, where would Dangote get the crude to refine in 2005? because
I know where he is gonna get crude in 2017 when his refinery will be ready.

Most times it is better to keep some opinion to yourself because you never can tell if the other person is seeing what you are not seeing.

I don't care what an ignorant person think of my opinion, Sanusi can be your God for all I care.

Sanusi that told you that without a total subsidy removal that the economy will collapse, we are yet to see that happen with a partial removal

Sanusi that Managed UBA and UBA was the only old generation bank acquired by a new generation bank during the consolidation exercise.

Sanusi that told you that Your banks are featherlite yet the Nigerian banks he inherited was the first multinational institution in Nigeria even the NNPC after over 30yrs of operation are yet to cross seme border, meanwhile GTB is in Gambia and Sierra leone.

Sanusi who told you that the share holders funds were eroded due to mismanagement, till date he is yet to admit the effect of the Economic melt down on the Nigerian banks, when asked to present his evidence, he published list of bank debtors with oil and gas exposure
He opted to bail them out exactly what other countries did to mitigate the effect of economic melt down in their countries.

Sanusi who claimed $46b was missing, reverted to $12b then $20b, is that the man you take seriously in your life?
How are we sure you are a serious person yourself, Sanusi is a walking confusion, failure is an understatement.


Imagine if we don't have ignorant people like you, where lies the fun!!

Genius100:
Dude, what kind of silly question is "where will Dangote have gotten the oil to refine in 2005? Again, it's becoming clear to me you don't know what you are talking about. First the refinery was sold to a consortium not just Dangote... Other parties that made up the consortium had oil interests. Outside of that, what stops the consortium from buying Nigerian crude oil at market price, refine it, add their profit and sell it to the populace? Asking where the consortium would have gotten crude oil is like asking why Dangote gets the raw materials for cement from.

Regarding your take on Sanusi, suffice it to say if you want to be taken seriously, you have to stop being crudely partisan. You are a real joke...

jpphilips:
If you know anything in that field you are dabbling into, you won't believe how ridiculous you sound, if you believe that Dangote had oil to refine in 2005, then may you hold tenaciously to your opinion, I am in the middle of 17:59, you know you aint getting free classes with that mannerism.
Like I said, if you sell that same refinery 3 times the price in 2005, Dangote will be more than glad to pay.
what you don't know, is way bigger than you, dey no dey use open eye see woman nyash!!

Genius100:
I bet you did not even know that the entire refinery was not sold to the consortium. A 51% stake was sold. Second, the amount it was sold for was $50 million more than the China oil company bid for it. Third, the refinery today will only sell for a fraction of the amount it was sold in 2007. Take that to the bank

jpphilips:
since you could not answer the question where Dangote will get his crude in 2005, I am not inebriated to join issues with you. happy now?

Genius100:
Why can't Dangote buy crude oil in the open market? Again, where does he get all the raw materials he uses to make cement?

jpphilips:
Yea! Dangote will get his crude where he gets his cement, and why is someone not giving him a standing ovation? his dangote will buy crude in the open market, now who is giving him heineken to chil.
that is why you mustn't stick your mouth in every issue, in a while,, people will realize how badly it stinks!!

I guess you are asking me why he can't buy in the international market at the time so you will learn because no sane person who understands the subject of discourse will suggest that nonsense, it is obvious you don't know and you want to use gra gra to know, definitely not from me!.

Rewind back to 2005, and ask your father to build a refinery with crude from the open market, why cant u guys just come here and read other than sticking ur mouth where you have no clue what is discussed??

this was your remark;




Since you claim to know, even called the question s!lly claiming how clear it is that you are sucked up in knowledge, finally, the professor suggests "dangote buy crude from the Open market in 2005", so this is the nonsense you claim you know to think my question is s!lly?
Some of you deserve to be flogged.

Genius100:
Please let us know when you are ready to logically present a position on why it's impossible to own a refinery without owning oil wells. While you're at it, also tell us where Dangote will get the crude oil needed to serve the capacity of the refinery he's building. Otherwise feel free to continue blowing hot air..