VolvoS60:


^^^^
That's not good enough sir.

People have given very cogent reasons why the principal actors in the current government (and others before it) should be in the dock answering hard questions. You can't give a perfunctory defence and leave it at that.

This government (like others before it) is criminally incompetent. It cannot cut the waste at the highest levels in its operations but it is remarkably purposeful when it comes to policies which hurt the most vulnerable. What is sad is when people like you come here and try to defend the indefensible.

The government sells crude oil to the NNPC at international prices (if what you say is true). No doubt the reasons given for this will be something along the lines of 'instilling discipline to compete at market rates and prices', etc. Things begin to unravel when we consider the actual outcomes - outcomes such as the inexplicable refusal of this government (like others before it) to invest in new refineries. Is granting 'subsidies' to import refined PMS/DPK/AGO a sensible course of action? 'Subsidies' which far exceed the cost of new refineries? Whose interests are served by this?

You can't privatize the gains (among a chosen few) and socialize the losses.

Nigerians are being held hostage by their own docility and stupidity. We do not want to hold our governments accountable!!! This is the price we pay for our actions.

If the government cannot build refineries, it might as well privatize the provision of all public goods and all forms of infrastructure. It has become fashionable for irresponsible governments to abdicate their responsibilities in the provision of public goods. Interestingly though, these same governments retain a monopoly on the so-called 'legitimate' use of force. This is one area the government is not willing to privatise or deregulate. As things stand today, I or any other citizen who so desires cannot set up and run a private army or a private police force. Why is this so?

atlwireles:


What a great line, ask yourself who is privatizing the gains and socializing the loses? I don't care what petrol sells for, frankly it makes no difference to me. Nigeria is poor a very poor country any how you dice it. You can make all assumption you want, but treat crude oil like a commodity. That all I really care about.

VolvoS60:


^^^^
As I asked you in one of my earlier posts: what is the extent of your advocacy for 'appropriate' (i.e. 'global') pricing in local transactions involving ofada rice, palm oil, cocoa, cotton, maize and groundnuts? These are commodities too. Why your insistence on crude oil?

I have made several points to which you have not given a response. You know what these points are so there's no need to repeat them.

I knew this was how it would end.

VolvoS60:


^^^^
As I asked you in one of my earlier posts: what is the extent of your advocacy for 'appropriate' (i.e. 'global') pricing in local transactions involving ofada rice, palm oil, cocoa, cotton, maize and groundnuts? These are commodities too. Why your insistence on crude oil?

I have made several points to which you have not given a response. You know what these points are so there's no need to repeat them.

I knew this was how it would end.

atlwireles:


Is there a government subsidy program for these commodities? Nobody stops you today from importing rice, palm oil, groundnut cotton in Nigeria. As long as you pay your duties, no one really cares. Also, you have no guaranteed profit from government. On the other hand, you invest locally and resell this same product for whatever price the market is willing to pay. Your comparisons here is off.

VolvoS60:



^^^^
Excellent point which strengthens mine considerably.

Nigerian governments DO subsidize agriculture. But note that they subsidize local production and NOT importation. We have the distortion in the oil sector because this government and its predecessors chose to subsidize importation rather than local production.

For nearly 9 pages now, I and others have been saying: Build new refineries and cut off the gravy train (of refined petroleum product importation). No matter how you dice it, it makes no sense to claim the government cannot build new refineries locally, only for the same government to then 'subsidize' imports at exponentially higher costs. For the last time I will ask you: Does this make sense?

atlwireles:



Below is the list of your (7) anointed PPRA importers. You need to enlighten yourself, before you even worry about me. Trafigura, Glencore or Vitol have their mother vessels 100 km off our shores, they sell to anybody bringing cash.

The participating companies include: the Nigerian National Petroleum Company (NNPC), Aiteo Energy, Ascon Oil, Avidor Oil and Gas, A-Z Petroleum, Bovas, Conoil Plc, Dee Jones Petroleum and Gas, Dozzy Oil and Gas, Folawiyo Energy, Fresh Synergy Ltd and Forte Oil Plc.

Others are: First Deepwater Discovery Ltd, Gulf Treasure Ltd, Heyden Petroleum, Ibafon Ltd, Integrated Oil and Gas Industries, IPMAN Refining and Marketing Ltd, Mobil Oil Plc., MRS Oil and Gas Ltd, MRS Oil Plc., NIPCO Plc., Northwest Petroleum & Gas Ltd, Oando Plc., Obat Petroleum Ltd, RainOil Ltd, Rahamaniyya Oil & Gas, Sahara Energy Ltd, Shorelink Oil Ltd, Swift Oil Ltd, Techno Oil Ltd and Total Nigeria Plc.

playboy19:


Well, you know, i should thank you very much for a good laugh today. I was heading out for a meeting with my partner when your last message came through. My partner saw your comment on my tab and was like, what? Is he from another country? We discussed about your ignorance and had a good laugh, so much that my executive assistant who was driving almost got us killed.

Well, like my partner rightly suggested, perhaps you should consider registering a company and getting the required documents. From experience, a tank farm agreement is like the most difficult to get from all the requirement, but i can help out by making a call or 2 to get that sorted for you. After you get all the document, walk into PPPRA office and try your luck like you suggested and let's see how that goes. If you, by TB Joshua miracle get the allocation, get yourself down to Asokoro, i will gladly finance the supply and we make money. I guess that should solve it instead of having to go back and forth with you unnecessarily over it. You know, real life experience is better than some crap you read on some random blogs.

Then again, you need to get informed.

atlwireles:


NO it does not strength any of your argument. Let me tell you straight, when Dangote finishes his refinery, the product NNPC buys from him or any other reseller will follow the same formula. dangote will not buy crude in open market and sell it to you for less. He does not love Nigeria that much. You people keep confusing the subside with importation, please, it not the same thing. Petrol subsides is social welfare program in Nigeria, where government, absolves some portion of petrol cost to her citizen. The source of the product being subsides here is immaterial. It would come from anywhere.

If you build your refinery today in Nigeria, your product will cost more than N97. If NNPC decides to buy from you, you simply become our new
mother vessel.

VolvoS60:



^^^^
On the contrary sir, the bolded part of your post is central to the discussion. The source of the product IS material to the discussion.

Why would Dangote buy dollar denominated crude oil from another country and sell it here in Nigeria for local consumption? What would be the justification? (Apart from supernormal profits) If the government sold crude oil to the NNPC at cost price plus a mark up (for opex and other costs) there would be no need for any 'subsidy' and all this nonsense would stop.

Let me remind you that another poster on this thread said there are a number of oil importers who import oil without any government subsidy. And according to this poster, these importers still make a tidy profit. Is this poster wrong? Because if he is right then your argument just got blown out of the water. Again.

The solution is staring us in the face. Build the damn refineries.

atlwireles:

What I hate with people like you, is noise, empty noise. Thanks, don't waste my time.

VolvoS60:



^^^^
On the contrary sir, the bolded part of your post is central to the discussion. The source of the product IS material to the discussion.

Why would Dangote buy dollar denominated crude oil from another country and sell it here in Nigeria for local consumption? What would be the justification? (Apart from supernormal profits) If the government sold crude oil to the NNPC at cost price plus a mark up (for opex and other costs) there would be no need for any 'subsidy' and all this nonsense would stop.

Let me remind you that another poster on this thread said there are a number of oil importers who import oil without any government subsidy. And according to this poster, these importers still make a tidy profit. Is this poster wrong? Because if he is right then your argument just got blown out of the water. Again.

The solution is staring us in the face. Build the damn refineries.

atlwireles:


Nigeria is not selling crude at cost plus markup. The Nigerian government has resolved to sell crude at the international price. Please get over that. Before Obj changed the price formula, NNPC would not account for their 445,000 barrels.

Thou illegal, I have heard companies import without PPRA permit. Guess what, petrol is 120 in my area, that's the average, those in Lagos buy at 97, most Nigerians do not. There are places in this same country where petrol sells for N140. That's why this subsides joke must be stopped. So, importing directly without subsides has an upside to it. Just don't get caught.

Scarp PPRA and allow people buy, produce and sell petrol for whatever price, the market will support. This one single action will fundamentally transform, the down stream sector. Also, the structural defect in governance and their inefficiency plus corruption this subsides regime has created will disappear.

The social cost will be minimal and limited.

VolvoS60:


^^^
There isn't anything else to say.

This back and forth has been on for hours.

You have your position and I have mine. Time will tell...

atlwireles:


Thanks for the polite back and fort. Something truly missing on this forum. Good night.

atlwireles:


Nigeria is not selling crude at cost plus markup. The Nigerian government has resolved to sell crude at the international price. Please get over that. Before Obj changed the price formula, NNPC would not account for their 445,000 barrels.

Thou illegal, I have heard companies import without PPRA permit. Guess what, petrol is 120 in my area, that's the average, those in Lagos buy at 97, most Nigerians do not. There are places in this same country where petrol sells for N140. That's why this subsides joke must be stopped. So, importing directly without subsides has an upside to it. Just don't get caught.

Scarp PPRA and allow people buy, produce and sell petrol for whatever price, the market will support. This one single action will fundamentally transform, the down stream sector. Also, the structural defect in governance and their inefficiency plus corruption this subsides regime has created will disappear.

The social cost will be minimal and limited.

playboy19:



I'm only replying this for the sake of those reading this or will be reading in the future. Don't get people thinking that an import permit is the same thing as FG allocation. They are 2 different things entirely. Import permit means, go ahead and import your own fuel, while a FG allocation means, please import fuel on behalf of the government and we pay you subsidy. Which is only restricted to 7 companies at the moment. That's the difference.

Secondly, it wouldn't be wise to deregulate the price of product, it will only mess up the downstream industry the more. Plus subsidy didn't create any corruption, rather, the whole subsidy 'scam' was created out of sheer corruption. We shouldn't make the impression that the system created corruption, when in truth, the whole system was created with minds full of corruption. To perpetuate it in full scale without consequences.

playboy19:



I'm only replying this for the sake of those reading this or will be reading in the future. Don't get people thinking that an import permit is the same thing as FG allocation. They are 2 different things entirely. Import permit means, go ahead and import your own fuel, while a FG allocation means, please import fuel on behalf of the government and we pay you subsidy. Which is only restricted to 7 companies at the moment. That's the difference.

Secondly, it wouldn't be wise to deregulate the price of product, it will only mess up the downstream industry the more. Plus subsidy didn't create any corruption, rather, the whole subsidy 'scam' was created out of sheer corruption. We shouldn't make the impression that the system created corruption, when in truth, the whole system was created with minds full of corruption. To perpetuate it in full scale without consequences.

atlwireles:


Firstly I used the word PPRA permit. I expect people to know, it comes with a certain allocation quota.

Secondly, we have two different understand of the events in Nigeria. I believe subsides created corruption. Who does not want free government money. Until, we change the price discrepancy, nothing will happen.

playboy19:


Good to know that we both agreed on the difference between an import permit and a FG allocation. Now this brings us back to the bone of contention. Which, if the allocation and subsidy is 'now' restricted to only these 7 companies, then how does the other companies 'now' importing independently and those who didn't get allocation before the subsidy uproar, how do they make profits? If they truly make profits, then whats the essence of the subsidy in the first place?

Moreover, if we can settle the able question, then you'd understand why i said the system was created with full corruption in mind, as there was no real need for it in the first place. It is a compensation scheme for the lobbyist. It is no surprise how all the indicted people were the ones in the room during the 'friends of Jonathan' campaign fund-raising in 2011 and why nothing has been done with the recommendations from the subsidy committee.

atlwireles:


People make profits because they get their petrol to places where Nigerians pay 120, 140 and 170. Also, the number of companies are not restricted to 7, I don't know why you're implying something, that's not correct.

Because government decided to set an artificial price of N97. That's why, people gaming the system, can import without seeking subsidies and sell at 140. Now, this is not fixed, because the price of crude plays a whole role in most people's calculation. When crude falls blow $90 dollars a barrel, Nigeria's local pump price is actually more expensive.

Sooner or later we will come to our senses in this country. If current projections are correct, Nigeria local consumption will hit a Million barrels per day in 2025. Are we planning on staying this same course?

size38:
Nigerians should rise and put a stop to this nonsense and urge d govt to use that money to repair our refineries. What kind of vision less and useless govt is this?

Johnnyessence:
The Federal Government is to spend the sum of
N971 billion to subsidise the supply of petrol to
Nigerians in 2015, an indication that the
administration has no plan to do away with
subsidising petrol.
In the same vein, the government plans to give out
a total of N260 million to the Subsidy Reinvestment
Programme, SURE-P, for intervention in various
development agencies.
This is contained in the 2015-2017 Medium Term
Expenditure Framework and Fiscal Strategy paper,
which President Goodluck Jonathan sent to the
National Assembly for approval as the basis for the
2015 budget.
According to the document, which Vanguard
obtained Thursdayt, the government expects to
receive fabulous revenue of N7.164 from oil and
gas while the sum of N3.2 billion from non-oil
revenue sources within the year.
Overall, the administration is expecting N11.1
billion as total federally collectible revenue for
2015, as against the projection of N10.894 for the
current year.
Of its oil revenue, according to Jonathan, the sum
of N858.59 billion will be spent as its contribution
to the cost of oil production while N209 billion will
go to National Domestic gas development and N78
billion set aside for Gas infrastructure development.
In the letter he addressed to the leadership of the
National Assembly, Jonathan admitted that the oil
sector was not witnessing new investments due to
uncertainty occasioned on the non-passage of the
Petroleum Industry Bill, PIB.
Jonathan explained that the oil benchmark of $78
pb was predicated on the projected balance
between increasing global supply resulting from
rising oil and unconventional oil production, and
production disruptions that may might result from
geopolitical risks.
The President said: “Our proposal is also driven by
the need to be cautious in our revenue projections
given the volatile nature of oil prices and the need
to rebuild our fiscal buffers, which have been very
useful in periods of revenue shocks”. www.vanguardngr.com/2014/10/fg-spend-n1-trillion-petrol-subsidy-2015/

Adminisher:


They can only chop for just on quarter, when Buhari enters in April everything will be probed.

bushdoc9919:
I would like to thank everyone who responded to me, and who raised questions and comments that are really good.

I would like to reiterate that the main problem is that we spend a lot of money on subsidy and we import too much.

As this article, The Positives Of Oil Subsidy Removal puts it...



And to further sweeten the deal....



Una don hear?

jpphilips:




You actually quoted an article that says a refinery produces oil to the tune of 38,000bbls/day, I tire for una kinda education

Just like the “Prophet of Doom”, Thomas Malthus said, the population of Nigeria was increasing geometrically and the oil sector became unable to meet our pressing petroleum needs. Then importation began.

Sooner than later, NNPC could not keep up with the high price of petroleum product in the international market, then she began to borrow to pay subsidy. Before any one could say Babangida, Nigeria already found herself in massive debt.

Briefly, I would like to tell a non-fictional story of three countries enjoying fuel subsidy. The first country being Libya, In Libya, the pump price of petrol is about N16 per litre, with the global price being N156 per litre. This is an amazing N140 subsidy if the fuel was imported, yet Libya, under a Dictator was the country with the highest human development index in Africa, still Libya had no external debt. The second country is Egypt, a non-oil producing state. Pump price in Egypt is about N47 per litre, with great social economic packages. The most amazing of all of these countries is the third, which is Venezuela. Venezuela has the lowest pump price in the world; this is about N5 per litre (N151 variance from global price). Yet, she enjoys fantastic social economic programs which include; free education to university level, free medical services for all. Recently, 17 new Universities were established and absolutely free. In Venezuela, people rarely go to Hospitals; rather Doctors come to their houses to treat them absolutely free.(KEEP in mind that Venezuela and Libya have 37 MILLION people, and five million people respectively and are no 5 and no3 on the list of oil producers.).

The logic is simple, if any private company comes into this sector and produces at international market price of N156 and sells in an economy were government fuel is N65, the company will have infinitesimal or no buyer at all, no matter the quality of the fuel produced. Subsequent to all this, the only choice we are left with is the removal of oil subsidy. This removal will pave the way for the following good.

If oil subsidy is removed, Natural monopoly (by the NNPC) will automatically be destroyed, giving room for private companies and thus competition. Just as it was in the days of NITEL (Nigerian Telecommunications), before the telecommunication sector was deregulated and the door was opened to private investors and thus a revolutionary good to the Nigerian economy.

Just as it was then, when new companies flood in there will be an increase in price, SIM cards then were as high as N50, 000. In the face of competition, this dropped as low as N100. Same will be the case for oil, when the subsidy is removed, petrol may sell as high as N160 per litre, but when competition comes in it will drop to the barest minimum, possibly lower than N65 per litre.

The amount the Government pay on subsidy can be channeled to meeting social needs like free and quality health care and education for all. This is therefore a right step in the right direction, and is capable of helping Nigeria achieve her vision 202020.

It’s no news that the Nigerian oil sector loses 40% of her oil produce annually to the mis-managing hands of flaring.

When the price of petroleum product sky rockets within the first 6-12months after the removal of subsidy, Nigerians will look elsewhere for generation of Fuel. This will lead to the development of alternate power supply. This can help the solar energy sector thrive better. Also, it can help the coal industry find her foot in the Nigerian Market.

bushdoc9919:


Well from this article on Wiki P...

In 2010, there were 149 operable U.S. refineries with a combined capacity of 17.6 million barrels (2,800,000 m3) per calendar day.

17.6 million divided by 149 gives an average of 118,120 barrels per day in each and every American refinery.

(Of course it is the US)

Modified at 12.44pm)

From this Business Day Report

in the first three quarters of 2013, the four refineries received 36.68 million barrels of (5,252,514 metric ton) crude oil from the NNPC to be processing into different petroleum products. This is equivalent to 100,482 barrels per day, 23 percent of the four refineries fully capacity of 445,000 barrels per day.

A breakdown of the 36.68 million barrels shows that Warri Refining and Petrochemical Company (WRPC) received more than 50 percent of the total crude sent to the four refineries, which equivalent to 55,062 barrels per day. The crude received is 44 percent of its full capacity.

The Kaduna Refining and Petrochemicals Company (KRPC) received 10.75 million barrels which translates to 29,458 barrels per day and 27 percent of its full capacity utilization. Port Harcourt Refining Company Limited (PHRC) received the least portion of 5.83 million barrels, translated to 15,962 barrels per day.

And this report from This day....proving my earlier point...

With the in-country refining capacity still a little above 10 million litres, as against Nigeria’s daily consumption of over 35 million litres and the dilly-dallying on critical steps required to boost the nation’s refining capacity,

jpphilips:


Bullsh!!t!



Clap trap



Arrant nonsense!!, only in Sanusi's imagination.




Daft Analysis from the block heads Jonathan call economic team




Nonsense!!




Only in a country where majority of her citizens are m0r0ns will you sell this clap trap and wont be stoned to death!!





Farouk Lawal Kinda social needs you mean? Nonsense!!




It is official! this article was written by an illiterate, believe at your own risk!!




, A failed state with mentally failed citizens, damn!!