₦airaland Forum

Old thread I know but that thick stuff in the fuel tank and on the pump assembly was

Petrol vehicles may not be as bad but they have their problems too.

Requested similar work on fuel systems of my vehicles over the years. Just a few months ago, I cleaned out my fuel tank, pump assembly and injectors after hard starting problems and it was something else. Clogged fuel strainer, tar like deposits on injectors, clogged nozzles etc.

The preventive maintenance in this area has always been at my prompting. Mechanic prefers to wait for the car to develop serious problems so that he can then charge me an arm and a leg for repairs.

This is Lagos.

omohayek:
Your hypocrisy is truly astonishing in its extent. Accusing others of operating from unstated "cynical motives" isn't juvenile ad hominem in your dictionary (and paranoid to boot)? Quit kidding yourself, mate.

^^^
My, you do have a sharp tongue don't you? For argument's sake I will respond to the one area in which clarification may be necessary.

My "cynical motives" reference was to ideologues - free market ideologues to be specific. And just to be clear, my use of that term refers to the amoral world view of free market purists who all too often insist on market led solutions - even in the face of clear market failure (that's another matter altogether which deserves its own thread). My use of that term refers to the cynicism of those who recommend privatization of social services and yet balk at the idea of privatization of (for example) the armed forces - simply because that would destroy the cloak of pseudo-nationalism that national armies provide for these ideologues at the moment. I could go on and on.

Like I told you earlier, if you took the time to read the thread (instead of barging in with guns blazing) you would have understood my rhetorical question about competencies of the federal government in commercial/economic activity versus public services. But you didn't - instead you jumped in without any consideration for context or nuance - all because you felt a compelling need to call me a hypocrite, a comedian, an object of ridicule, a conspiracy theorist, a paranoiac with serious personal shortcomings etc. All in your first couple of posts! Is it that you really didn't get it? Or you did and you just wanted to troll?

Lay out your argument about the topic in as compelling a manner as you can - if you can. The gratuitous insults simply reveal you to be either uncultured or insecure. Or both. You decide.

Your appropriation of the name of Friedrich von H. (perhaps in the vain hope that his qualities would rub off on you) reveals the futility of trying to be brilliant or exceptional by association. Work on your ideas and your arguments (rather than your skill at name calling) and you wouldn't have to adopt anyone else's name for validation, OK?

omohayek:
You really are a gifted comedian, albeit an unintentional one. You ought to take your own advice before dishing it out, lest you make yourself seem even more ridiculous than you already have.

^^^
If you have an argument then lay it out and quit the juvenile insults. Put your argument up for debate. Anyone who actually read through the thread properly would clearly understand my position - even if they didn't agree with it.

Mudslinging and gratuitous personal attacks are not my thing. Look elsewhere if you want to do that.

omohayek:
Who in their right mind says that the Nigerian government has shown any competence in any of the things you mention? Are any of the Nigerian army, prison system or educational system worthy of praise? Who thinks of Nigeria's judicial system as anything other than a joke?


This is nonsense from start to finish: private prisons exist and are commonplace in the USA, while a fully privatized educational system with proper oversight by a few qualified government officials would certainly be far better than the decaying mess that is in place right now. While nobody is advocating for the privatization of the entire Nigerian army (which government has ever done such a thing), private military contractors recruited through a transparent bidding process would be certain to do a better job than the army which has made such a hash of fighting Boko Haram: the only thing the Nigerian Army has ever really been good at is plotting coups, looting public funds and harassing civilians.

Your quip about "cynical reasons" only suggests that you lack the knowledge or inclination to study the issues in question in any depth, and prefer to substitute conspiracy theorising for these personal shortcomings. Every single one of the points you raise could have been easily answered with a quick google search or two.

^^^


I don't think you took the time to actually follow the thread and my posts therein.

Read through. Slowly. Then you may contribute without the incendiary words. I want more light and less heat on this topic.

grandstar:
Please try and glean things. If there was no subsidy on locally refined oil, many refineries would have been set up to make money from it. There is a subsidy.

^^^
We can agree to disagree. I don't know if there is a subsidy or not. I will reserve judgment until I have the facts.

grandstar:
I don't care a hoot about all that information because I'm a firm believer in the removal of the subsidy and the deregulation of the price. The information you feel I should know is completely irrelevant.

^^^
Information is power. Always remember that.

grandstar:
If it was profitable to refine locally, then why is the country importing? That alone answers the question.

^^^
Prove it.

grandstar:
I'm not interested and anyway they have ended the program

^^^

grandstar:
Yes you're correct but why risk state owned in a country like Nigeria? I don't think America has any state owned refinery neither does Britain
My arguments is why not err on the side of caution? For a country like Nigeria state owned is a recipe for disaster. And why state owned considering resources here are stretched so thin? The federal budget is barely a third of New York City's budget, a city of only 8million people

^^^
Fair point. I agree that the Nigerian government couldn't successfully run a tap if its life depended on it. What I have a problem with is the resigned acceptance of this government ineptitude only as long as it exists in non-commercial sectors. For some reason, ideologues accept, expect or excuse government inefficiency as long as it is in non-economic sectors. If the Nigerian government cannot run a refinery, then why should you believe it can competently run an army? Or prisons? Or an education system? Or a judicial system?

And we can all agree that our army, prisons, schools etc. are broken. How come nobody suggests we privatize those areas 100%? I have long advocated this but free market ideologues do not support this - for very cynical reasons I will not go into now. Privatize all these so called 'government services' then I'll take you serious.

It has been a good exchange. I have made my points as clearly as I can. We have agreed to disagree and it has been civil.

grandstar:
What really makes no sense whatsoever is the fuel subsidy. The subsidy has led to the underdevelopment of the downstream sector of the economy. Nobody will like to set up a refinery and sell at government mandated price. Even Dangote has informed the nation that his price will be international market going price. Because there is a subsidy. no one wants to build a refinery hence the need to import refined products

^^^
At the risk of sounding like a broken record I will repeat myself yet again. I do understand that the subsidy on imported PMS is unsustainable and has to end. I have been very clear about this. What I do not know is if there is a subsidy on locally refined PMS. In other words, if a brand new refinery is set up in Warri today, can it refine 1 litre of fuel (covering all its costs plus a reasonable margin) and sell at a price of 145 Naira?

grandstar:
I actually deleted some of what I wrote yesterday but now see it is useful

I have no idea about the exact cost of locally refined PMS. I am however confused if it will make any difference

^^^


Those who advocate the removal of subsidy on imported fuel have no problem pulling out the data to support their argument. The landing cost of imported PMS (right down to per litre basis) is available at the click of a button. Yet somehow, no one seems to have the cost profile of local refining capacity (on a per litre basis) and yet this information is central to this matter. For someone who strongly advocates subsidy removal isn't it odd that you don't have this information - and if you don't, shouldn't you be asking for it? Have you considered whether those who are pushing for full deregulation are simply interested in making supernormal profits - in an industry that has significant barriers to entry?

grandstar:
I want to ask you a simple question: why was there no subsidy on PMS when the pump price was increased to 145/litre and why is there need to now subsidize again? The answer to your question lies in how you answer that question

^^^
I am not sure what you mean up here. What I do know is that as long as the controlled pump head price of PMS (whether it is 87 Naira or 145 Naira per litre or whatever) is less than the landing cost of one litre of imported PMS then there is a subsidy. (Note that we haven't even discussed other costs yet).

We will end up going back to the point I have been making the entire length of this thread. If local refining capacity can profitably refine 1 litre of PMS for less than the current pump head price of 145 Naira then all this talk of subsidy flies out the window and we can focus on what matters: building refineries here in Nigeria to meet local demand.

And before you make an issue out of it, I do understand that the regulated pump head price of 145 Naira is not static and will have to change at some point, depending on market conditions, exchange rates, the refineries cost profiles etc. This does not in anyway negate my argument.

grandstar:
i have no idea of the cost of refining. You mentioned that affects the price. What do you mean?

Let us say it cost N10 to refine a litre of crude locally.

In 2008 the price of crude oil per barrel was close to $140. By 2009 it had crashed to $35. I want to ask you what difference will the cost of refining at N10 make to the retail pump price?

^^^
If it costs lets say N10 (all costs plus a reasonable margin) to locally refine a litre of PMS and the regulated pump head price is 87 Naira (or 145 Naira) the oil companies are still making a healthy profit. Can you see why it is important to get the truth about the cost profile of local refining capacity?

You painted a scenario of a fall in the international price of crude (from $140 to $35). Kindly note that the international price of crude oil is immaterial to the domestic market - it has zero relationship to domestic consumption as long as there is enough local refining capacity to meet local demand. I am very much aware that some believe that Nigerians should pay 'international prices' (whatever that means ) for petroleum products but that argument is nonsensical.

grandstar:
Let that pass

It isn't implied racism regarding the Scandinavians. I wouldn't say such about the Argentine's who are mostly white.

Because ARAMCO is profitable does not mean all divisions within it are. You can't be selling refined oils below the market determined price and you make a profit. Saudi sold refined oils at heavily subsidised prices until recently. I think it freed the price this year due to the collapse in oil prices since 2014. It needed to cut wasteful spending.

For it to sell refined oil below the market price it will purchase the crude oil below the market value (short changing the upstream sector of ARAMCO)in order to make a "profit". The burden was becoming too costly on the government and that's why they removed the subsidy.

^^^
I would like you to crosscheck the above about ARAMCO because you have made some very bold assertions (and not for the first time ). Details of ARAMCO's subsidy regime for Saudis would indeed be very welcome and would add a lot to this discussion.

grandstar:
Though you've come up with some impressive figures regarding Petrochina and Rosneft, I don't really trust their accounts and it doesn't change my views about state ownership. Better to err on the side of caution

^^^


You don't really trust their accounts . (Rosneft's GDRs are listed on the London Stock Exchange - although to be fair, that doesn't guarantee anything as such. Enron and Lehman Bros were once NYSE listed companies too )

Your real issue is with state ownership and that's OK. Unfortunately, that's an argument that will not be settled in your favour anytime soon - as long as some countries have state owned enterprises that comfortably meet both financial and social objectives. There's nothing, absolutely nothing that says a state owned enterprise cannot make profit or recover costs while also meeting social objectives. You may not like it but it is what it is.

grandstar:
Despite the praise you have for state owned enterprises, the private sector still beats them. STATOIL is not a big player outside Norway compared to the likes of ExxonMobil or Shell for instance. Despite ARAMCO's size, it is hard to hear of it outside Saudi Arabia. Rosneft has mostly stuck to Russia and it is not a big player outside its country. Only PetroChina has ventured outside quite visibly. Private owned companies are more daring and adventurous.

^^^
I never set out to make this a debate about the superiority of SOEs over private companies. No. You injected that into the discussion. And why should you criticize Statoil, ARAMCO etc. for concentrating on domestic markets? Is that a valid criticism? If they perform on the financial and social metrics in their home countries, why should it bother you (or anyone) if they choose not to play in export markets?

grandstar:
The fantastically corrupt Nigerian government sucks at managing SOE's and shouldn't be trusted with anything.

^^^

At least you and I are in agreement on something...

grandstar:
I'm stopping here. Not going any further

Why sir? I was beginning to enjoy our exchange and it has been a learning experience for me. Please come out to play.

grandstar:
What is wrong if a 3rd world country imports refined petroleum products? Many countries local markets are so small to make a local refinery profitable. Also it may be an area they have no comparative advantage. Refined oil is best bought from mega refineries

^^^
My omission. I meant to say "so-called oil producing, 3rd world country". The inclusion of these words changes everything. Nigeria - a so called OPEC member imports to meet over half of its refined petroleum product needs. It isn't that we are importing crude from other oil producers to blend (in order to meet some environmental requirements for example). No. We are importing refined petroleum products for retail consumers - in those large volumes. It makes no sense whatsoever.

grandstar:
There is a subsidy. It's actually cheaper to import fuel as these refineries are antiques and inefficient

^^^
Sir, I prefer to deal in facts. Not conjecture. I cannot rely on your word (or anyone else's for that matter) that 'there is a subsidy' on locally refined petrol. As I said earlier, if I can get the cost of 1 litre of imported refined PMS at the click of a button, I should be able to do the same for locally refined PMS. Let me have the numbers and I can draw my own conclusions.

grandstar:
All I know about local refining is that it cost more to refine with these obsolete refineries than to import fuel. Those were the words of Kachikwu. Dangote refinery will save Dangote N26 on every litre it imports. That is the best I can give you.

^^^
Again I will say that I am not in the business of speculation. I need the numbers!! Dangote's energy cost profile is useful to him and to him alone. I am interested in how much it costs to refine petroleum products locally - that cost affects the price I should pay if there is domestic refining capacity - and there is. Am I asking too much for this information to be made public?

grandstar:
Because so so and so does it does not mean you should.

Benin republic citizens for instance may be demanding fuel subsidy by arguing that the Nigeria government subsidises fuel. The true story is much different as almost all governments have tried removing the subsidy only to back out due to protests and strikes. The government grudgingly subsidises fuel and wish they could be like Benin republic and deregulate the price

Governments are bad managers and most often run companies aground. The only reason why many state owned companies are still functioning are due to the massive subventions that keep them alive.

A year before a mighty Argentine state owned company(I think it's power utility) was privatised, it received the highest subvention from the government. The year after it was privatised, it became the largest tax payer to the government

Statoil I'm sure is well run as its Scandinavian. Aramco I'm sure runs at a loss and its work force most likely bloated. Petrobas is now majority private owned and was privatised to make it efficient and very profitable.

Leave business activities to the private sector

^^^
I don't understand where Republique du Benin comes into this discussion. Beninoise will demand fuel subsidies because Nigeria subsidizes fuel? How is that linked to our discussion?

You made some sweeping statements about SOEs and I am happy we are now getting into the realm of fact based arguments. You spoke about Statoil and conceded that the Norwegians have been able to get their state owned oil utility to run profitably - because 'they are Scandinavian'. Is the implied racism in your statement lost on you? Do Scandinavians all have two heads each?

You spoke about Aramco. Aramco is Saudi Arabia's state owned oil company. It is wholly owned by the Saudi government and it IS profitable. In fact, contrary to your assertions about it being an overstaffed loss maker, Aramco made $111 billion in 2018, making it more profitable than Apple (the American phone and computer manufacturer). Moody's rated Aramco A1 in 2018. Not bad for a bloated loser.
https://www.cnbc.com/2019/04/01/saudi-aramco-made-111-billion-in-2018-topping-apple-as-the-worlds-most-profitable-company-by-far.html

Rosneft is Russia's second largest oil company. It is 50% owned by the Russian federal government. It IS profitable. Ditto Gazprom. https://www.forbes.com/companies/rosneft/#3a2c802d498d

Petrochina is China's second largest oil company. It is majority owned by the Chinese government and is a CNPC subsidiary. It IS profitable. Ditto Sinopec.
https://www.reuters.com/article/us-china-petrochina-results/petrochina-forecasts-first-half-net-profit-to-more-than-double-highest-since-2015-idUSKBN1KK16D

In my previous posts I stayed clear of the long running ideological arguments about privatization as well as the rationale for SOEs. You chose to bring it up in your post above. According to you, governments are bad managers and business activities should be left to the private sector. While I may agree broadly with the second half of your argument, the first part is blown out of the water by SOEs like Statoil.

There is nothing that inherently makes governments bad managers. Absolutely nothing. Everything hinges on what people demand and expect from their governments. The Scandinavians expect and demand a lot from their leaders and you can see the result in the performance of their oil SOEs. Nigerians expect and demand nothing from their leaders and as such they get nothing.

If Nigerian governments can't manage an SOE (however small), why should they be trusted with a defence budget running into billions? Are the management skill sets that dissimilar? Are you surprised Nigeria can't kit its soldiers and quell a previously low level internal insurgency that has now spiraled out of control? Are you surprised? I am not. You can't excuse government failure in one area and expect stellar results in others.

grandstar:
What you wrote indicates you're part of the problem. You seem to want cheap fuel. You can't have the two. Either you want the complete removal of fuel subsidy or you don't.

The removal may mean the price will rise very high or not. Any expectation of a cheap price should be thrown out through the window.

To have an idea how much petrol will cost, check the prices of diesel and kerosene as they are not subsidized.

Dangote said that his refinery will save Otedola N26 per litre. This statement is neither here nor there as international fuel price is volatile.

It's not the job of the government to build refineries. That's a private sector venture. Dangote's daily refining capacity can satisfy the entire country with a lot available for export.

^^^
No sir. I am not part of the problem. I just want a clear, unemotional statement of the facts.

It is clear there is a subsidy on imported petrol and that subsidy must go - it makes no sense for a 3rd world country to import refined petroleum products that are US dollar priced.

What isn't clear is if there is a subsidy on locally refined petrol - you know, the petrol refined in Kaduna, Warri or Port Harcourt from Nigerian crude oil.

I have said nothing about expectations of cheap prices. I just want the facts. If the landing cost of a litre of imported petrol is in the public domain, (accessible at the click of a button) then the cost of a litre of locally refined petrol, diesel or kerosene should also be in the public domain too. I can then draw my own conclusions.

Oh yes indeed it is not the business of governments to build refineries. I wonder what Statoil, Aramco, Petrobras and the others would have to say about that...

The landing cost of 1 litre of imported petrol right now is about 180 Naira. Throw in distribution costs and other costs and the cost of 1 litre of imported petrol rises to almost 200 Naira. So we all agree there is a subsidy.

But what is the cost of producing 1 litre of locally refined petrol? Is it 10 Naira? 50 Naira? 100 Naira? 150 Naira? 200 Naira? We need to know to compare! If it costs (let's say) 50 Naira to refine 1 litre of fuel in Warri (all costs factored in - distribution costs, etc.) and petrol is sold at 145 Naira per litre at the pump head - then there is no subsidy on locally refined petrol!

If there is no subsidy on locally refined fuel then it raises uncomfortable questions about why we have not focused on improving local refining capacity - difficult questions that some people do not want to answer...

grandstar:
So true about the benefits of fuel subsidy removal but perish the thought of it happening under a left leaning populist with zero understanding of economics with a "I don't want people suffer" philosophy to power

Nigeria by now should the refining capital of Africa, probably refining as much as 3m barrels a day and exporting the bulk. Rather, the opposite exist today with Nigeria being a bulk importer of almost all the refined fuels it uses. Nigeria by the way actually exports petrol through rampant smuggling of subsidised petrol from Nigeria to neighbouring countries. This mans these neighbours are enjoying Naija government money

^^^
The rhetoric about fuel subsidy removal doesn't tell the full story.

Yes indeed there is a subsidy on imported fuel. But is there a subsidy on locally refined fuel? I asked this question of the fellow you quoted on another thread but I didn't get an answer.

The subsidy on imported refined fuel over the last decade could easily have paid for new refineries several times over. Those refineries could be leased to private hands to manage under any one of a number of arrangements - since we all agree that Nigerian government cannot successfully manage a chicken coop (that's a discussion for another day). Why is this not under consideration?

Some posters tying themselves in knots trying to criticize her.

Her sarcasm is indeed premium grade - 100%

thebigkendo:
They will tell you its not first body oh

^^^



All body na body...

domack99:
I had same issue why try to sell my car late 2018, reason i didn't repaint is because i spent considerable amount of money to ensure the car engine and suspensions are in good condition. I don't want to get disappointed while on Lagos-Ibadan expressway or Madam having issue on her way to work.

When i put the car up for sale people where pricing at rediculous amount when i understand the perfect state of the car engine, even though the body is rough.

Around Xmas period last year i decided to paint the car which cost me about 70k and after which i uploaded the pictures, Waow, the car pricing value went up with 450k.

^^^
Exactly.

It costs money to get good motor oil, filters, coolant, pads, transmission fluid, brake fluid, etc. I would rather pour money into these than respraying every few years.

To avoid ridiculous bids I might just decide to repaint the car when ready to sell.

thebigkendo:
Little rust no dey end for little rust oh

^^


True

thebigkendo:
Depends...
Power train issues I.e Engine/tranny can be solved by an easy & some times cheap replacement but Rust, bent chassis,cabin water leakage!!! Bros I will take a bad powertrain - good body anytime.. Especially for our regular everyday Toyotas & Hondas.. I learnt this lesson the hard way.

^^^
I guess it depends on individual tolerance for specific problems.

I can live with a little rust but engine and transmission wahala is a no go area for me. i wouldn't even know where to start with heavily sludged up motors, cracked pistons, or broken con rods. Or finding and paying for 10 pin, 11 pin and 27 pin replacement transmissions.

Having said that, chassis problems and cabin leaks are also problems I would avoid.

domack99:
I know most Nigeria are interested in how clean the body of the car is and pay little or no attention to usage and maintenance

^^^
This is the part I'll never understand.

My 7 year vehicle (moderate mileage, <65,000 km) has dents, scratches, and some "tribal marks" from commercial buses (Danfo ) etc. I drive in Lagos after all and these scars are more or less rites of passage for most cars. But the mechanicals are sound. I can vouch for the powertrain, suspension, cooling system and electricals of my vehicle anyday, anytime. Yet I have been told that buyers will seriously mark down the value of the car (if I decide to sell) because of 'body' wear and tear.

I remember a Mercedes Benz ML 350 I saw at my local mechanic's place some years ago. Spotless black metallic paint and a blemish free, tan leather interior. This car really looked like it had just rolled out of the factory - until the mechanic opened the bonnet for an oil change. Apparently, the owner wasn't big on maintenance and had been skipping routine servicing. When the mechanic brought out the oil filter, it was an unrecognizable mess - completely deformed and coated in thick black sludge . Of course, the engine was heavily sludged up and the mechanics were worried about what to do next. Carry out an engine flush and risk major mechanical damage? They eventually settled on a black oil flush - but not before warning the owner of what could potentially go wrong.

I asked about the car recently and the mechanic told me the owner had sold it. I honestly pity the buyer if he/she wasn't given full information and he/she made the purchase only because the body was 'good'. With what I saw, there's no way that car won't give serious problems down the line.

Summary: the body is important but the record of use and maintenance of the other parts (powertrain etc.) is even more important. Of what use is a good body when a car keeps breaking down?

chibuzorAbia:
Go to maternity hospitals and clinics around the country and see the gigantic number of babies you are producing, then ask yourself in 20 years time who will employ these children?

^^^

MizMyColi:
No bro. But you can ask questions on the tecno forum.

Thanks.

MizMyColi:
These aside, I really did enjoy using my Camon CX. Of course, I still use it, but I might port soon....even that is hard at this point because I am yet to find a phone that gives me the kind of camera quality that this phone gives to me at its price, or even a bit higher.

So, fam, whats your take about the Camon CX success rate in your respective states' tech market?

Let's gist.
Happy New Year!

^^^
I bought a Camon X Pro a couple of months ago but misplaced the owner's manual . I searched online for one and surprisingly drew a blank. I am not a phone person at all - for years I have used phones without exploring up to 90% of their features. Any ideas where I can get a manual quickly?

Good job.

The next challenge is to sustain it.

Focusmind:
AutoJosh leave matter. Our standards are just too low in this country. This kind of thing is done using wrought iron. Go to Europe and see how wrought iron that have stayed for centuries were used for road division and this type of work as shown in the picture below

Here, we use one fake gauze iron for things like this, despite the fact that the disorder in this country is second to none. Check some of the flower lanes and bus tops where these fake and sub-standard wire gauze were used, they have all spoilt. For you to build things that will last, use superior material.

^^^
+100

The LASG cannot say the destruction of these fences came as a surprise.

It is clear this was a contract awarded to favour some one - with built-in opportunities for renewal - all in line with the system of patronage that defines Lagos.

What a wasted opportunity.

tactius:
I have answered you just now...but the problem with your question is that

1.You assume that since we completed the last refinery in 1988...fuel consumption level has not increased in 30 years.

2.You also assume that our refineries can meet local demand now. They can't ....and I posted the figures in the post you quoted...which you did not read.

3.If we need new ...well, just read the other post.

^^^
Your post came in after mine - fastest fingers I suppose.

There seems to be some confusion on which of your points I disagreed with in one of your last 3 posts. I actually disagreed with your assertion that "the amount of locally produced PMS is not significant to the discussion" and not your assertion that "we import most of the PMS we use in this country". I hope that is clear.

But my main question remains unanswered. In your last post or so you stated that "there is a subsidy on refined products" without clarifying whether you meant imported or locally refined products. My position is very simple and I will restate it. If it costs less to locally refine a litre of fuel than the regulated pump price of 145 Naira - then there is no subsidy. Interestingly, nobody is willing and ready to provide this information on the record. You were able to show (at the click of a button) that it costs 205 Naira for a litre of imported fuel to land in Nigeria. Where are the same costing figures for locally refined fuel - for us to compare?

The article you quoted in your other post proves my point. The article states very clearly that Nigeria has little domestic refining capacity and this capacity is inefficient. That sir, is the crux of the matter. Efficient domestic refining capacity is the solution and it has nothing to do with the international price of imported refined PMS. If the (all in) cost of locally refined PMS is less than the regulated pump head price, (and locally available PMS is sufficient to meet local demand) there is no need for importation and therefore no subsidy to speak of.

To address your most recent points - I did not assume Sir, that our fuel consumption has not increased in the last 30 years, or that our (existing) refineries can meet local demand today. I cleared that up in the first few sentences of this post - there is no doubt that we do need significantly higher product volumes to meet today's demand than we did 30 years ago. Where those product volumes will come from is a separate issue which we are thrashing out here. Your other points about how "subsidy is preventing the investment needed to bring in new refineries" and "subsidy basically does not let NNPC make a sufficent profit to invest in new refineries" are a whole new controversy and require further explanation....

tactius:
The problem is that we import most of the PMS we use in this country...90% as at 2017

So, the amount of locally produced PMS is not that significant to the discussion.

Note that three refineries together produce 5-6 million liters of fuel daily...while Lagos needs 8million (The newest refinery in Nigeria was built 31 years ago...so existing refining capacity is not sufficient)

And the honest reason why NNPC is not building new refineries? Subsidy basically does not let NNPC make a sufficent profit to invest in new refineries, It also incentivises corruption and fuel smuggling as a result.

^^^
My initial question still stands. I need to know the cost of producing a litre of refined PMS locally to know if there is a subsidy or not. Does it cost less than 145 Naira to locally refine a litre of PMS in Nigeria? More than 145 Naira? Or is it equal to 145 Naira?

tactius:
The problem is that we import most of the PMS we use in this country...90% as at 2017

So, the amount of locally produced PMS is not that significant to the discussion.

^^^
I beg to differ, Sir.

Nigeria has the dubious distinction of being the only OPEC country (correct me if I am wrong) which imports refined PMS in such large volumes. Some years ago, the ambassador of another major oil producer broke diplomatic protocol and stated publicly here in Nigeria that he couldn't understand why Nigeria imports refined petroleum products.

Things were not always like this. There was a time in this country when over half (possibly far more) of the demand for PMS was met by Nigerian refineries. As long as we rely on expensive, US dollar priced, imported refined PMS then subsidy will always remain a moving target. Nigeria does not have any control over the US dollar so it makes zero sense for Nigeria to depend on imported refined PMS when crude oil is right here underneath Nigerian soil.

It is very interesting that we all have details of how much it costs to import a litre of refined PMS but no one seems to know (or if they know, they aren't saying) how much it costs to produce a litre of refined PMS locally. This question is important because it naturally leads to the next one: if there is no subsidy on locally refined PMS, why are the refineries not working?

tactius:
1. Landing costs right now are at 205 naira

2.I can't answer the question on cost at the pump head..

The problem is, we don't have accurate values of how much fuel is consumed in Nigeria....

Anyway, the whole fuel subsidy thing is so murky and corruption ridden. Better it goes so that the market does its thing and clears everything. Governments should not be setting prices.

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The issue of cost at the pump head is central to this matter sir. We have established that there is a subsidy on imported refined PMS. You provided details of current landing costs (205 Naira) which alone far exceed the fixed pump head price of 145 Naira - so it is very clear that there is a subsidy on imported PMS.

But is there a subsidy on locally refined PMS?

Reference:
That is what it is, increase in price which only reduces subsidy. It doesn't remove it altogether. Removal means you and I pay the right price for what we consume. Right now you and I are paying more than the right price. Nigerians in reality are paying more than the market price for fuel. The real excess goes to corrupt government officials and smugglers. The rest of us get poorer by the year.

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There is a subsidy on imported refined premium motor spirit. Agreed.

Is there a subsidy on locally refined premium motor spirit?

tactius:
The thing is, with subsidy gone...petroleum marketers would make heftier profits, and would even have enough to reinvest in making more profits.

The problem is, subsides are often times the most visible thing a government has done.And the long term benefits of removing subsidy take time to manifest.

Take GSM. GSM was not subsidised from the word go. We were paying over N10000 for SIM , and the service was bad. (At one point one could not call inbetween networks, then you could, but at high costs.). It took about five years before we saw the benefits of GSM not being subsidsed....better service, superfast internet, SIM now costing N500 and so on.

Oil. Nigerians don't want to pay high prices. That is why people like me who support subidy removal are the 'enemy'...we want to take away a benefit. And even though this benefit is coming at a huge cost to our economy and fueling corruption(NNPC can in essence just inflate any sum, and claim it is for subsidy...and even justify it by claiming the market is volatile)..people would rather suffer the corruption than pay N250 and above for fuel.

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I have a couple of questions.

What is the total cost at the pump head of 1 litre of locally refined premium motor spirit in Nigeria?

What is the total cost (including landing costs, distribution costs etc.) at the pump head of 1 litre of refined premium motor spirit imported into Nigeria?

tactius:
I wish I could....however, having spent a lot of my time explaining how subsidy works to many Nairalanders over the past one week, and being called names like 'Zombie', Criminal., and 'Supporter of Oppression' as well as 'Buharist' (which hurts me a lot because I don't back either PDP or APC) for my pains......I am tired.

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cosse:
u still dnt get the point do you?.....can kanu av sex.....yes......is he permitted to enjoy funny sexual escapades?..........yes of course, he is an adult and a married man at that....moreover its within the confines of matrimony............should the world be audience to it!......NO! Thats where his folly comes into play...how can a leader of such caliber carelessly record sexual escapades for personal consumption.....it speak volumes on ow vain minded he is.....its embarassing regardless of what igbo leaders might say.....the trash by mazi is equivalent to [b]imagining martin luther king in sex videos(wit whoever...wife or slut).... [/b]Its outright embarassing.....to imself, the international community and the igbos worlwide that he pretends to fight for.

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Truth is stranger than fiction.

I say this because there is no need to 'imagine' Martin Luther King in 'sex videos' as you call it. Believe it or not, the FBI has audio recordings (declassified only a few years ago) of Martin Luther King engaging in sexual intercourse with his mistress. The then FBI director had an almost pathological hatred of King and was determined to 'expose' him as a 'degenerate' who habitually committed adultery with multiple women. Those recordings were the evidence.

There is nothing new under the sun.