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FG To Sell Oil In Naira To Dangote Refinery - Politics (7) - Nairaland

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Re: FG To Sell Oil In Naira To Dangote Refinery by 9jaRealist: 9:54am On Feb 28, 2021
Yankee101:
It's quoted worldwide in dollars. Even your pump price is dictated by its dollar price per barrel

It will still be the same price...
But will be sold in Naira in Nigeria.

It’s the same methodology for gas sold to GENCOs...
Crude produced in Nigeria and sold to Nigerians within Nigeria should be in Nigerian currency.
>

2 Likes

Re: FG To Sell Oil In Naira To Dangote Refinery by kelvindj98: 9:54am On Feb 28, 2021
TheWrita:
I don't understand the headline and I'm not going to read the rest of this story to avoid being irritated this Sunday morning
FG is planning to do what?sell oil?
Isn't dangote refinery ...drilling for oil?
I'm sure some people are already rushing the comment section to defend and explain rubbish.
You guys are too dumb to understand that the country you THINK you are a citizen of ..actually belongs to a few old men.
They are just sharing things among themselves.
Sad!
And you confidently typed this rubbish. Cudos, confident illiterate.

2 Likes

Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 9:57am On Feb 28, 2021
Modarun:
a look at his Monika should tell you he can't reason things through.

Thanks for insulting me, when I did not insult you.

Happy sunday, wise man.

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by QuotaSystem: 9:57am On Feb 28, 2021
TrueNigerian300:


Well said!!! But again it is a capitalist system and the monopoly he is going to enjoy for the time being could drive the price. Ideally, we should have a cheaper product from him but nothing seems sensible in the country. Look at rice, the government banned importation of it to expand and encourage local productions. What do we have now with the price of rice?? We need price gauging control system.

I agree.

Hopefully, the removal of subsidy is expected to stimulate local competition for Dangote. I'm aware of at least 3 other major players in the field right now.

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by KingLawlts: 10:00am On Feb 28, 2021
you all feeling happy that fuel price would drop and favor we civilians. have you all asked yourself if the cement and other product they produces favored us in any ways? now we're heading into another bondage again, well wish us all best of luck, cause me knw understand this country
Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:02am On Feb 28, 2021
Modarun:
there is nothing like subsidy, what we have at the moment is indirect taxing. Govt tax the importers than tell them how much to take out the pockets of Nigerians.

That shows you don't understand how subsidy works.

In brief, until 2017, everyone imported fuel, and sold to makreters at a price below the cost of importation...and government paid them the difference...a subsidy.

Also, NNPC , when they had refinereis, refined fuel and sold it at a price below the production cost to end user....and government paid them the difference , a subsidy

Subsidy payments also include things like transport costs.

The problem is, after a while, paying subsidy was putting a strain on our revenues...forcing us to take more loans to meet up with needs. NNPC no longer had enough cash to repair and maintain refineries, and build new ones, and many marketers and importers were engaging in sharp practices like lying on how much fuel they imported, smuggling fuel out of the country, and selling fuel outside the country, because subsidy meant they could not make enough of a profit.

Now, Government made NNPC the sole importer of fuel. As at now, NNPC pays N186 to import one liter of fuel, and sells it at N162..MEANING they lose N24 PER LITER...which is partly covered by them subsidizing the thing from their pocket...with some help from government.

But the current regime is proving unsustainable.

2 Likes

Re: FG To Sell Oil In Naira To Dangote Refinery by njola34(m): 10:04am On Feb 28, 2021
QuotaSystem:
Dangote's refinery will definitely be a game changer for the Nigerian economy.

What a genius strategy. Imagine a scenario where other African countries would be looking for Nigerian Naira in order to purchase Nigerian Petroleum Products. It would increase the organic demand for our currency thereby boosting its value



This does not make sense. There is no way Dangote's petrol would be more expensive because not only has the issue of landing cost been eliminated since we're no longer importing, but the market has also been deregulated (which is why we suffer price hikes whenever price of crude or USD rises).

You're right about elimination of subsidy which will save us significant amounts of money, but even greater benefits would come from saving millions of USD daily that would have been wasted to import refined petrol (a whopping 41% of our forex saved); further boosting our foreign reserves and the value of the Naira. The multiplier benefits from job creation and development of allied industries to support the refinery and petrochemical plant are better imagined.

Finally, the disgraceful economic anomaly wherein the 6th largest oil producer in the world is one of the biggest importers of petrol from less endowed countries, and continuously suffers whenever crude prices rise instead of enjoying the largesse like fellow oil producers, will finally come to an end thanks to Dangote's refinery. I wish him the best and I'm excited for Nigeria.

On paper the strategy is a banger. From the Nigeria context it will not strengthen the naira value because I can’t bet anybody that Dangote will not sell to the rest of African and the world in Naira. He will sell in dollars to the rest of west Africa. This guys don’t believe in the naira currency.
Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:05am On Feb 28, 2021
pat077:
i'm not talking 2010, how much was a bag of cement this time last year and how much is it now?

The value of the naira is falling...so prices are going up on things...despite the intrnisc value of the thing remaining the same.

Plus, cement prices are based on a variety of factors...like electricity, which is bad in Nigeria because DISCOS cannot charge cost reflective tarrifs, meaning they run at a loss, meaning poor power supply....and bad roads, and poor railway system

If you want Dangote to be forced into allowing government to fix his price...he will run at a loss, and at the end of the day, job losses , directly and indirectly.

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:07am On Feb 28, 2021
surgical:
Dangote does not allow for competition,he is a pure monopolist,he doesn't have what it takes to compete,he uses state power to muzzle out his competitors

Well, considering BUA, LARGAFE, and IBETO are still around...

You don't have to buy Dangote products alone...you can buy BUA, or LAFARGE....and last I checked no one got punished by Government or Dangote for doing so.

4 Likes

Re: FG To Sell Oil In Naira To Dangote Refinery by 9jaRealist: 10:09am On Feb 28, 2021
alexola20:
Dangote is a wicked front to many political and economic saboteurs in Nigeria.

The refinery is not solely owned by Dangote but conglomerates of thieves.

I wish people can just rise up one day and show these thieves that we are not all stupid.

Kill them and their family,no rat will be spared in the houses.

Dangote (and his so-called “conglomerate of thieves”) are creating TENS OF THOUSANDS OF JOBS FOR NIGERIANS IN NIGERIA - among all ethnic groups and across all the geopolitical regions (and not just in his hometown like some other people), who can then feed their families and educate their kids, and buy all those other goods and services that create JOBS and livelihoods for other people.

Long may that sort of “wickedness” continue. undecided
>

4 Likes 2 Shares

Re: FG To Sell Oil In Naira To Dangote Refinery by kayjay69(m): 10:12am On Feb 28, 2021
Sorry about that, I read the exercepts from IMF, although I would much prefer exercepts from a local organisation that really understands the inner workings of our petroleum sector.

However, you are failing to realise the point I am making. Dangote's refinery and Bua's refinery will not solve our energy demands. They are business men, capitalists, for profit individuals. They borrowed money, which attracts interest, to build these refineries. Therefore, they are only likely to sell to the highest bidder and no one on Gods green earth has the power to stop them.

I know the modular refinery referred to in your excerpt and I can confirm to you that they do not sell their products to the Nigerian market, they sell to the highest bidder. There is another in Imo state, Waltersmith.

Even if these refineries exclusively sell to the Nigerian market, I don't see how it helps our currency. There are a host of other factors affecting our currency, USD demand for Oil importation is just one of it.

We have lots of problems in Nigeria, let's try not to get carried away with this refinery or it being heralded as the solution to all our problems.
QuotaSystem:


You're asking me our total consumption and at the same time dismissing the answer already provided in barrels per day?

Use your self acclaimed downstream knowledge to do the conversion into gallons or litres.

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by 9jaRealist: 10:19am On Feb 28, 2021
Ayo8:
And Dangote will sell the refined products back to federal govt in USD$
Dangote is one of the cabals

If you bothered to read the OP article...
It clearly says that Dangote will be selling products in Naira.
>

1 Like 1 Share

Re: FG To Sell Oil In Naira To Dangote Refinery by Yankee101: 10:20am On Feb 28, 2021
9jaRealist:


It will still be the same price...
But will be sold in Naira in Nigeria.

It’s the same methodology for gas sold to GENCOs...
Crude produced in Nigeria and sold to Nigerians within Nigeria should be in Nigerian currency.
>

And how have the GENCOS kept prices level in tandem with inflation even after getting all the government help?

Or the same Dangote, how cheap or stable has Dangote cement prices been? Despite Tax breaks, getting FX at CBN price, near stability of tax rates, same staff salary level for years and same cost of obtaining limestone from Kogi state?

Either you're of him or a beneficiary, if not your arguments don't hold up empirically
Re: FG To Sell Oil In Naira To Dangote Refinery by pat077: 10:24am On Feb 28, 2021
Godarz:


The value of the naira is falling...so prices are going up on things...despite the intrnisc value of the thing remaining the same.

Plus, cement prices are based on a variety of factors...like electricity, which is bad in Nigeria because DISCOS cannot charge cost reflective tarrifs, meaning they run at a loss, meaning poor power supply....and bad roads, and poor railway system

If you want Dangote to be forced into allowing government to fix his price...he will run at a loss, and at the end of the day, job losses , directly and indirectly.
did all this problems u mentioned just started this year? The fact dangote is exploiting us because he has government backing. Does the increase in electricity tarrif affects only his company?
Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:27am On Feb 28, 2021
pat077:
did all this problems u mentioned just started this year? The fact dangote is exploiting us because he has government backing. Does the increase in electricity tarrif affects only his company?

Well, considering prices of cement have been increasing for some time before last year...i mean for years....I doubt it has anything to do with government favoring Dangote.

Plus, you don't have to buy only Dangote...BUA, and Lafarge are there. Buy their product.

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by Asebaba1(m): 10:29am On Feb 28, 2021
since they know this why not use Naira in everything we do in this country, some people are been paid in dollars and they are in Nigeria, dollars should not even be in circulation, let our mastercard be used for any transaction that involves dollars at our official exchange rate.
Nigeria shall be great if only we do the right thing with right leaders

2 Likes 1 Share

Re: FG To Sell Oil In Naira To Dangote Refinery by pat077: 10:33am On Feb 28, 2021
Godarz:


Well, considering prices of cement have been increasing for some time....I doubt it has anything to do with government favoring Dangote.

Plus, you don't have to buy only Dangote...BUA, and Lafarge are there. Buy their product.
so, u agree to the fact that the price are not justify.
Re: FG To Sell Oil In Naira To Dangote Refinery by mu2sa2: 10:34am On Feb 28, 2021
Igboarecriminal:
IPOB terrorist with monkey brain.
this is the bottom of the bottle saying swim or sink. We're talking about Africa, where in some places there's still no Cars or road, talkless of electric car. You people watch too much CNN and hollywood movies.
I blame you somehow for even responding to people "with monkey brain." Analysts have said oil will continue to play a significant role for the next 40 years and mumu people are spewing rubbish over dangote refinery. Dangote refinery will end the shame of Nigeria importing refined petroleum products. Any other Nigerian who wants to compete with him is free to do so. Dangote is a most patriotic Nigerian businessman by investing heavily in Nigeria - he makes money around the world and invest it in Nigeria. God bless him more. All these brainless ipob miscreants making stupid noises are shameless.

5 Likes 2 Shares

Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:38am On Feb 28, 2021
pat077:
so, u agree to the fact that the price are not justify.

So, by extension, you think that government should fix the prices of goods and services that everyone sells, so that at the end of the day, everyone operates at a loss, and our economy goes into more severe meltdown.

If you support government price fixing for Dangote, you should also support government forcing you to sell your goods as a businessman at a price below what you need it to make a profit.

Dangote is a businessman, and businessmen and women are not charity operators. Yes, he increases prices, and yes I honestly don't like it. But at the end of the day, the money he makes goes into salaries of staff, and taxes to the government at all levels, and the occasional charitable activity.

Again, if you don't like Dangote, buy BUA or Lafarge cement, and stop grumbling.

2 Likes

Re: FG To Sell Oil In Naira To Dangote Refinery by 9jaRealist: 10:40am On Feb 28, 2021
Yankee101:
And how have the GENCOS kept prices level in tandem with inflation even after getting all the government help?

Or the same Dangote, how cheap or stable has Dangote cement prices been? Despite Tax breaks, getting FX at CBN price, near stability of tax rates, same staff salary level for years and same cost of obtaining limestone from Kogi state?

Either you're of him or a beneficiary, if not your arguments don't hold up empirically

What exactly is supposed to be my “argument”?
That crude prices will be the global price but paid in Naira?

Perhaps you are confusing me with someone else (which can happen when people argue blindly).
>
Re: FG To Sell Oil In Naira To Dangote Refinery by loswhite(m): 10:41am On Feb 28, 2021
Emary:
So the plan is to sell this man our crude at cheap rates, only for him to resell the refined products to us at even higher rates than importers currently do? Real monopoly. Well, at least after this, we should hear no more about subsidy.
Where did you get this information from? Did you read it from this post?

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by richmond500: 10:41am On Feb 28, 2021
wolement:
At a time when the world is abandoning oil for cleaner energy. What a great move undecided
no country can abandon oil completely even in the next 50yrs

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:47am On Feb 28, 2021
wolement:
At a time when the world is abandoning oil for cleaner energy. What a great move undecided

I know this is a nice comment from some people to scare other people...but for now, oil is still going to be our major source of energy.

Note that I speak as someone who is a fan of cleaner energy...to the point that I dream of building large solar farms in the Sahara...if Bill Gates and Elon Musk would just give me the kudi...also electric cars are one of the few things that make me overexcited with joy...

But the thing is, for now, we don't have alternatives for petrol in the transport sector. Sure, there are electric cars available...but that means a severe increase in the amount of electricity to be produced...which may short term require burning fossil fuels. (Nuclear is the long term way...but a lot of people absolutely hate nuclear power). There is no clean energy equivalent for air transport, rail transport and sea transport...and even now, most cars run on fossil fuels.

So oil is still very important for now. Unless someone discovers nuclear fusion...now that would be a game changer.
Re: FG To Sell Oil In Naira To Dangote Refinery by Clintonchiedzie(m): 10:49am On Feb 28, 2021
Ok

1 Like

Re: FG To Sell Oil In Naira To Dangote Refinery by MansoryMX(m): 10:49am On Feb 28, 2021
MEGA4BILLION:
Will the cabal holding this country to ransom allow the refinery to run?

Because we know a working refinery will curtail their stealing.


Dude, the cabals owns Dangote Company. The name and Man Dangote is just a figured head there! Dangote is a group of companies! Not owned by one man but many shareholders! The cabals are the shareholders that is why everything goes easy for Dangote group PLC
Re: FG To Sell Oil In Naira To Dangote Refinery by Gesman: 10:52am On Feb 28, 2021
This man and his refinery will only make this worse for us just as he did with cement
Re: FG To Sell Oil In Naira To Dangote Refinery by Yankee101: 10:52am On Feb 28, 2021
9jaRealist:


What exactly is supposed to be my “argument”?
That crude prices will be the global price but paid in Naira?

Perhaps you are confusing me with someone else (which can happen when people argue blindly).
>

When they have no point to make they attack
Re: FG To Sell Oil In Naira To Dangote Refinery by gaftsoil(m): 10:52am On Feb 28, 2021
They should just rename this useless country " dangote" Let this country just divide mek things better. If the north want to sell their own land to dangote let them do it. A whole country can't have a refinery just because they want to give all to one man
Re: FG To Sell Oil In Naira To Dangote Refinery by Patrioticman007(m): 10:55am On Feb 28, 2021
9jaRealist:


Why would assume it would be a “cheap rate” because it’s sold in Naira? shocked
It would still be sold at the Naira equivalent of the current international crude prices.

Nonetheless, suffice it to point out that the Naira is actually the ONLY LEGAL TENDER OF NIGERIA. As the CBN itself constantly warns airlines, hotels and other businesses, it is actually ILLEGAL to charge for goods and services IN NIGERIA in any currency other than the Naira (although we all know that Lagos landlords and some other service providers do so under-the-table all the time). Crude oil produced in Nigeria and sold in Nigeria should logically be priced in Naira.
>

The hatred some unscrupulous elements have for Nigeria, is too baffling that they want the republic to fail, while they are dying for on top their online republic that will never see the light of the day.
Re: FG To Sell Oil In Naira To Dangote Refinery by ibietela2(m): 10:57am On Feb 28, 2021
QuotaSystem:
Dangote's refinery will definitely be a game changer for the Nigerian economy.

What a genius strategy. Imagine a scenario where other African countries would be looking for Nigerian Naira in order to purchase Nigerian Petroleum Products. It would increase the organic demand for our currency thereby boosting its value significantly.



This does not make sense. There is no way Dangote's petrol would be more expensive because not only has the issue of landing cost been eliminated since we're no longer importing, but the market has also been deregulated (which is why we suffer price hikes whenever price of crude or USD rises).

You're right about elimination of subsidy which will save us significant amounts of money, but even greater benefits would come from saving millions of USD daily that would have been wasted to import refined petrol (a whopping 41% of our forex saved); further boosting our foreign reserves and the value of the Naira. The multiplier benefits from job creation and development of allied industries to support the refinery and petrochemical plant are better imagined.

Finally, the disgraceful economic anomaly wherein the 6th largest oil producer in the world is one of the biggest importers of petrol from less endowed countries, and continuously suffers whenever crude prices rise instead of enjoying the largesse like fellow oil producers, will finally come to an end thanks to Dangote's refinery. I wish him the best and I'm excited for Nigeria.

Rejoicing over a private property while the so called government has 3 refinery making 0 income
Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 10:59am On Feb 28, 2021
MansoryMX:



Dude, the cabals owns Dangote Company. The name and Man Dangote is just a figured head there! Dangote is a group of companies! Not owned by one man but many shareholders! The cabals are the shareholders that is why everything goes easy for Dangote group PLC

The fact is, the cabals don't own Dangote.

There are over 60 licenses that have been issued for refineries in Nigeria. Less than ten have been taken up...and most of them won't be refining fuel (BUA's Imo refinery will refine everything apart from PMS)

Problem is, because government is fixing the price of fuel..and paying a subsidy that does not cover the resulting losses...no one wants to refine fuel in Nigeria. Unless your name is Dangote...who by the way took loans to provide most of the financing for his refinery...which were given to him because the banks know they can get their money back if the refinery loses money...by taking over his other companies.

If government stopped fixing the price of fuel, while prices would shoot up., most of the remaining licensee's would promptly start building refineries to take advantage of the profits in the fuel business. Increased producton means increased business which means prices fall by competiton.

Forget cabals. Dangote appears to be the only one because he has the money to risk building a refinery in a country where he risks losing money because of government price controls on fuel prices.Other private refineries like BUA avoid that risk by refining everything else but petrol
Re: FG To Sell Oil In Naira To Dangote Refinery by Nobody: 11:02am On Feb 28, 2021
ibietela2:


Rejoicing over a private property while the so called government has 3 refinery making 0 income

Which happened because Nigerians like you and me for decades forced NNPC to sell fuel below what it cost it to refine...meaning NNPC could not make enough of a profit to repair, upgrade, and maintain its refineries.

It is not something that started today...it started years ago.

Also, NNPC spends what little profit it makes essentially paying to keep prices of petrol at N162 and at the same time import fuel, and also pay for transporting fuel...

Of course, if we remove government price controls....there would be enough profit to make refining petrol profitable in Nigeria again

But no, you want fuel at N40 per liter....

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