₦airaland Forum

Godarz:
It has happened under previous presidents....under GEJ it rose from N65 to N87, and under Obasanjo it rose from N20 to N75 even.

modified

Fuel price increases a history...



Modified...this post is not to support Buhari or APC, but to correct false assumptions, and provide context....

Godarz:
Plus one would assume the US would erupt in civil war and then reduced

Godarz:
Well, inflation has been always high....

We are undergoing a similar issue we went through in 1982-89....economic crisis due to oil being too low to sustain us revenue wise.

(That's where I criticize Bubu, the fact is, he had tools with which to get us off our reliance on oil , which he isn't using.)

Truth is, the same complaints you are complaining now, were made back during each and every time fuel prices were raised.

Godarz:
That has no bearing on the topic...plus most Euorpean countries pay higher than 400 naira.

UK pays N655 naira per liter...and that's an oil producer.

France pays 699 per liter.

Norway is the third largest producer of oil...and pays N755 per liter.

mmo1:
Oga how much is the minimum wage in UK, France and Norway.

larryjonze:
If you are observance you will agree the world as long gone revolved since 1989, does it make sense we find ourselves in the same mess as three decades ago. one thing you failed to mention was buhari was pass of the leaders we had between 1982-89 and another major point is 30yrs ago the naira still has value to match pounds not to talk of dollars
In a country where fuel is a necessity to all forms of productivity and services, an increase in fuel price wil continue to spring up the inflation index ... purchasing power is @ the recieving end Do you know what thats means .... it doesnt make sense we are buying what we own

Iamzik:
Every regime increased fuel price but only a dullard will allow fuel price go from 87 to 170 in four years.

Call a Spade a Spade and stop throwing irrelevant price history around

Godarz:
And the only way to stimulate productivity is by raising taxes so that money exists to be able to build the infrastructure we want.

Plus, if you want functioning power, we cannot be producing power at N53 per kwh and selling it at N20-30 per kwh or N51 per kwh and expect power companies to make the profit they need to make improvements

Same thing for fuel...we cannot be selling fuel at a lower price than the cost of its production which is what we did for years till all our refineries went to the dust.

Everything costs something. I hate the idea, but it is sadly a fact.

We can't run a produictve economy when we keep on using the we are poor excuse to keep fixing prcies...driving away the agents that are needed for icnreased productivity in the first place.

ThierryJay:
Lol, Did you really say that (in bolded)?

You mean if you live in an household where your family's total annual income is N500,000, and you guys need to contribute to get a family car worth N2million to make movement easier for you all - assuming only you started contributing first - will you keep saying all the other family members should contribute more out of their meager salaries so you can buy the car?

Is the sensible thing not to first look for ways to augment your family income stream from external initiatives, after which you can then bill yourselves?

I give up on you bro.

Godarz:
My point is Nigeria always goes through these economic issues because our economy is resource dependent not industrial dependent

That is why i am not a fan of Buhari. He has noy done much to make us free from resource dependency.

Hence we always keep lurching from boom to bust

Saintp:
Some Nigerians are so heartless. Someone is comparing fuel price in Nigeria to other countries. Which kind of stupid comparison is that?
Let's do the maths.

Minimum wage in Nigeria 30000 per months
Full time working hours per week is 40 hrs. In 1 month, it is 160 hours. So minimum wage in Nigeria is 30000/160 = 187 naira per hour. Then fuel price is 200 naira per liter.

Let's see Canada for example.
Minimum wage in Ontario is $14 Canadian dollars per hour. Fuel price is $1 per liter.

Even though, a Canadian will buy fuel at 350 naira per liter if you do the conversion, from the scenario above which is more affordable to the 2 groups of people?

The idiots are quick to say fuel is cheaper in Nigeria because this or that country pay 500 naira per liter, but they will not tell you the minimum wage of those countries and the fuel price in those countries currencies to have an idea of how affordable it is to the citizens of those countries
Which kind of blatant deceit is this?

Godarz:
Then you should stop complaining about poor services since Nigeria has

1. A low tax rate

2. A low percentage of people paying taxes(I forgot to add this)

To provide the revenue for things to run well.

When less than 30% of the economically active people are paying taxes and oil is not high enough for us plus corruption is there to compound matters what do you expect?

You cannot buy a car at the cost of a bicycle

Godarz:
So, we should subsidise fuel to the tune of 1.2 TRILLION naira or more annually, and take loans to cover up the deficit resulting ?

Removing subsidy is the best way. We should have done this since 1993, even 2012.

Godarz:
Then you should stop complaining about poor services since Nigeria has

1. A low tax rate

2. A low percentage of people paying taxes(I forgot to add this)

To provide the revenue for things to run well.

When less than 30% of the economically active people are paying taxes and oil is not high enough for us plus corruption is there to compound matters what do you expect?

You cannot buy a car at the cost of a bicycle

budaatum:
Electrical Tomatoes

The emboldened is about the only bit of this that got my attention but I notice it caught no one else's.

"Price controls"! It means a product is kept at a price set by government, and in Nigeria, we know it's kept low and very likely beneath the cost at which it can be sold at a profit. Like petrol really. But we can at least claim a reason for petrol with our crude oil and our ineptitude at running refineries. Electric though!?

Imagine it were tomatoes. You invest in land and fertiliser and labour and grow them, and when you get them to the market, government sets the price. I'm absolutely certain if that price is higher than the cost at which you grow your tomatoes, you wouldn't mind much. You'd likely be delighted if it's high enough for you to make a tidy profit. And if you're fortunate and the price set is so high, you'd likely invest in more land and more fertilizer and more labour and grow even more tomatoes. But this is Naija, where the price set by government is more likely to be way below your costs so that after you sell your tomatoes, you would have lost money.

Now think, you lost money on your tomatoes. Are you going to plant tomatoes next season? If you're into the charity business or you're stupid, you just might. But if you're not and have rent and school fees for your kids to pay and you want to eat and pay the interest on a loan I very much doubt you'd be stupid enough to throw your money away growing unprofitable tomatoes!

Well, that's the case with electricity in Nigeria I'm afraid. You generate it, transport it along unreliable transmission wires, lose a large chunk of it to illegal use and theft and what you do get paid for does not cover the cost of producing it. Now tell, would you plant electricity next season? I very much doubt it unless you're into the charity business or you're stupid, of course, but somehow, I just can't imagine you'd be either.

So, what's the solution you might wonder. Increase the price of electricity of course. But come on people, increase the price of electricity so electricity planters can earn more money and plant more and sell more? Surely you must be cursing me by now, or haven't you noticed you'd have to pay more for my electric if you want it?

Ok, perhaps you're all nice civilised folks and don't want to curse me so let's try a different way of looking at this. Imagine Buhari removes the price control so I can sell my electricity at a market determined price like I currently sell my tomatoes no doubt at a profit high enough for me to want to plant more next year. Are you cursing me yet? I'm sure you would be if it was the subsidy on petrol I were talking about removing. Hell no! You'd likely stone me if you could get your hands on me!

Well, that's what this piece is saying where it says "The private sector is given little incentive to invest.” After all, I'm in the electric planting business for the money and the profit and not because I love you all as Adam Smith would say, so why give you light if you aren't paying me for the priviledge! And you wanna complain you're in darkness?!

When you pay me enough to cover my planting of tomatoes after paying for the land and the fertilizer and the labour and the interest on a loan and cover what I lose to theft and illegal harvesting, and still make a tidy profit to reinvest, I will plant 12000megawatts of tomatoes and I will sell 12000megawatts of tomatoes and even more megawatts of tomatoes than you can eat even because you would be incentivizing me to invest what you pay me in more land and more fertiliser and more labour to plant more tomatoes so I will have more tomatoes to sell you and make more money. But if you want cheap electric, keep your price controls and don't incentivize me but don't expect me to waste my time labouring in the sun just so you can have light because, like you, I ain't that stupid nor into the charity business!

Anyone cursing me yet, because I am telling you, we are too cheap!

Not to defend his bubuhighness but the reason why pms has risen like that has to do with

1. Low revenue from crude oil sales which means lower amount of money to subsidse petrol.

2. Low dollar inflow due to the fall in oil prices which leads to a fall in value of the naira and a rise in fuel prices


Bubu could have avoided all this by

1. Supporting GEJ whem he raised prices from N65 to N140 which would have attracted more investment in similar refineries and led to increased production of fuel and fall in fuel prices

2. A result of no 1 would have led to reduction in dollar outflow via importation of fuel and subsidy which would have put the naira in a better place

3. Diversified by supporting agricultural and industrial development as well as deregulation of the power sector so that it has the funds to fix itself up

4. Genuinely fought corruption

5. Raised taxes and widened the tax bracket by raising tax to gdp ratio to 23% or more reducing our need to take loans.

So, we should subsidise fuel to the tune of 1.2 TRILLION naira or more annually, and take loans to cover up the deficit resulting ?

Removing subsidy is the best way. We should have done this since 1993, even 2012.

https://www.nairaland.com/6439068/petrol-sell-n230-per-litre#99512771