₦airaland Forum

I understand the fact that subsidy was removed on Premium Motor Spirit, commonly called fuel, hence the #145 per litre. But i dont understand why diesel has moved to #200 even though there has not been any subsidy on it.


I used to think that it was because of the scarcity of the dollar but i see that the price of fuel is even reducing unlike diesel that keeps increasing

I just need someone to explain to be because i used to buy it at #180 per litre last month, but recently it moved up to #200 and as at this morning, the same filling station is saying its #220 with no justifiable reason from the attendant

Am really tired.

my place, its 230naira. cos of deregulation

Its part of the change agenda... ona never see soomtin

change program in progress, by 2019 when we have no economy again we will understand.

Pmb needs money to pay back his presidential election sponsors.

It inflation related syndrome, IRS which Buhari and APC change has inflicted on Nigerian.

The Avengers blew up pipelines supplying crude to port Harcourt and Kaduna refineries which resulted in reduced supply of Diesel in the country. The marketers subsequently exploited this by increasing the price of diesel above what you will normally expect.

Love Machine:
Pmb needs money to pay back his presidential election sponsors.

Hian

Really

Pls OP just wait leme think of someone to blame..
.. Dat didn't take long, it's GEJ

Nigeria need money

Eazybay:
Pls OP just wait leme think of someone to blame..

.. Dat didn't take long, it's GEJ

I didnt find that funny

Dollar shortage sir! Depots price 182-185. You import 1 metric tone almost $650. Make the arithmetic it's still good if you are far from Lagos to buy AGO 200+.

AbuMaryam1:
Dollar shortage sir! Depots price 182-185. You import 1 metric tone almost $650. Make the arithmetic it's still good if you are far from Lagos to buy AGO 200+.

Thanks sir

But how come the shortage aint affecting fuel??
Some stations sell fuel at #140 per litre now

izzou:
Thanks sir

But how come the shortage aint affecting fuel??
Some stations sell fuel at #140 per litre now

PMS isn't supposed to be selling at 145 from day one. Both the products are available now. That's the important of deregulation.

AbuMaryam1:
PMS isn't supposed to be selling at 145 from day one. Both the products are available now. That's the important of deregulation.

Alright

Nagode

It beats me too, in April this same diesel was 120, 115 in some stations. Dollars scarcity didn't start today so the price is still a surprise to me

izzou:
I understand the fact that subsidy was removed on Premium Motor Spirit, commonly called fuel, hence the #145 per litre. But i dont understand why diesel has moved to #200 even though there has not been any subsidy on it.
I used to think that it was because of the scarcity of the dollar but i see that the price of fuel is even reducing unlike diesel that keeps increasing
I just need someone to explain to be because i used to buy it at #180 per litre last month, but recently it moved up to #200 and as at this morning, the same filling station is saying its #220 with no justifiable reason from the attendant
Am really tired.

I posted my thoughts on this in May. Same dollar explanation applies to diesel. There should NEVER be deregulation in price without local capacity being ramped up significantly. Without this, the price will NEVER, I repeat NEVER come down, except artificially.

The price of petrol cannot reduce! Here's why:

1. Marketers will source their own dollars: Petroleum Minister of State Ibe Kachikwu announced that Marketers will have to source their own dollars to buy PMS. i.e. Dollars will not be sold to them at CBN rate of N200. Nairaland's daily update of exchange rates lets us know that $1 trades for upwards of N300. For those who don't know, PMS is traded internationally in US Dollars. This means Petrol Marketers will have to spend Dollars to buy this product from traders/refineries abroad, and then come and sell in Naira. Having bought Dollars for N300, will they come back and make a loss? You guess is as good as mine.

2. No matter the price of a barrel of oil, the price remains the same: Despite the rise and falls of crude oil prices from time immemorial, the price of petrol, diesel and kerosene has never come up or down in response to the crude oil price! Instead, it slowly and constantly creeps higher every single year. Diesel was deregulated in 2009 and sold for about N90 (See pic below). Today diesel retails for between N125-135 per litre. Why has the price been going up consistently?

Solutions: 1. CBN dollar monopoly must be halted! Surely it benefits many CBN heads from (now) Saint Sanusi to Soludo but you cannot have one body determining who gets a critical business resource, especially in an import dependent economy like Nigeria's. Henry Boyo's writings are instructive here.

2. Deregulation should only occur when there is sufficient and diverse local refining capacity. If multiple companies are able to refine they will be required to sell at a competitive prices, just to stay in business. Why can't you apply the subsidies to local refiners until you have reached refining capacity to meet demand?

3. Remove a regulator like PPPRA setting or suggesting prices: PPPRA also releases 'templates' to guide petroleum prices. This is similar to pure water which sells for N10 regardless of manufacturer. Ask yourself- how come all pure water sells for the same price?? Little known to the public, ATWAP (Association of Table Water Producers) actually sets the price in Nigeria and enforces it! ( Read this and be educated https://www.nairaland.com/418542/pure-water-biz-discuss/20 ) How can there be a free competitive market with marketers forced to retail at 'not above N145?

4. God bless Nigeria!