DaudaAbu:
[s]Pls note that the Saudi report above was from 28th Dec 2015

THE FEDERAL GOVERNMENT DID NOT REMOVE SUBSIDY BECAUSE THERE IS NO SUBSIDY AT #86.5 PUMP PRICE OF FUEL
This is what the government has done. The government has simply stopped giving foreign exchange to fuel importers and has asked them to source for foreign exchange through secondary sources.

Why has the pump price of fuel increased from #86.5 to between #135 and #145? This is specifically is as a result of the difference between the official exchange rate and the informal (parallel) market exchange rate.
This is the simple mathematics. The official exchange rate is #199 per dollar while the parallel market exchange rate is #320 per dollar. This represents and increase of 37% (320-199/320 × 100 = 37.8%).
This reflected exactly in the new price of petrol as it increased from #86.5 to an average of #140 which is an increase of 38% (140 - 86.5/140 ×100 = 38%). There may be a gap in the dissemination of information to the public and it is totally regrettable.
The Federal government cannot continue to be the sole source of foreign exchange for the importation of fuel in the face of falling price of crude resulting in the depletion of our foreign reserve. It Is unsustainable and cannot satisfy the domestic consumption of fuel in Nigeria. Nigeria gets foreign currency from the sale of crude and the price of crude has fallen by over 70%. This means that the government no longer has enough dollars to give to fuel importers. A lay man should be able to understand this. With the competition that will set in from the open market, it s expected that these pump price of fuel will naturally crash in time.[/s]

MossadAgent:
1. NNPC imports petrol via agents appointed by Buhari who are mainly drawn from his family, friends and close confidants.

2. NNPC agents source forex for fuel imports from the CBN at the official rate of 199 naira per dollar.

3. Round tripping and diversion of forex ends up in the black market where the forex is sold at 325.

4. NNPC does not have the infrastructure in terms of fuel depots at both the Apapa and Tin Can ports to meet Nigeria's daily consumption.

5. Prior to this regime, fuel tankers offloaded their contents on a daily basis in Lagos ports.

6. With the forex scarcity and refusal of the govt to come to terms with compensating for the foreign exchange cost, most if not all independent marketers stopped importing.

7. This leads to only a trickle of 2 or 3 tankers a week offloading their contents in Lagos- a drastic drop when compared to when independent marketers where importing.

8. NNPC agents appointed by Buhari also fleece the govt by falsely claiming subsidies on imports as well as declaring arrival of none existing tankers at Lagos ports.

9. The govt then decides to allow independent marketers import and sell well above the official price in order to meet the shortfall.

10. The govt insists that independent marketers must source for forex outside the CBN. Thus marketers will get forex at as today at 345 naira per dollar, while the NNPC agents will still have access to forex at 199.

11.why then will NNPC sell at 145 naira?

12. This means NNPC will be making a wider profit margin than independent marketers if fuel retails at 145 naira per litre at their stations.

So in a nutshell, NNPC will now be making more profit at 145 if they still source forex at 199 as against independent marketers who have to pay 345 naira to a dollar.

This then implies that a state owned corporation will be making more profit than private firms.
We should also ask the minister of petroleum the cost of refining a litre of fuel at their refineries.

Is the cost of refining a litre of fuel by the NNPC up to 145 naira per litre?

Can imported fuel which includes landing cost plus forex compensation be cheaper than NNPC locally refined fuel?

I for one know that the current pricing in effect is meant to pave way for Dangote's refinery which will soon begin operation by mid 2017.

This is exactly how Dangote created a monopoly of rice imports during the Obasanjo era by chasing the only main competitor ( Vaswani brothers) to his then upcoming fledging empire .

This new pricing regime is meant to make serious money for buhari and his cronies through a skewed forex regime and also to pave way for Dangote's supremacy in the downstream sector.

Change is for daft foolish myopic zombies

DaudaAbu:
Pls note that the Saudi report above was from 28th Dec 2015

THE FEDERAL GOVERNMENT DID NOT REMOVE SUBSIDY BECAUSE THERE IS NO SUBSIDY AT #86.5 PUMP PRICE OF FUEL
This is what the government has done. The government has simply stopped giving foreign exchange to fuel importers and has asked them to source for foreign exchange through secondary sources.

Why has the pump price of fuel increased from #86.5 to between #135 and #145? This is specifically is as a result of the difference between the official exchange rate and the informal (parallel) market exchange rate.
This is the simple mathematics. The official exchange rate is #199 per dollar while the parallel market exchange rate is #320 per dollar. This represents and increase of 37% (320-199/320 × 100 = 37.8%).
This reflected exactly in the new price of petrol as it increased from #86.5 to an average of #140 which is an increase of 38% (140 - 86.5/140 ×100 = 38%). There may be a gap in the dissemination of information to the public and it is totally regrettable.
The Federal government cannot continue to be the sole source of foreign exchange for the importation of fuel in the face of falling price of crude resulting in the depletion of our foreign reserve. It Is unsustainable and cannot satisfy the domestic consumption of fuel in Nigeria. Nigeria gets foreign currency from the sale of crude and the price of crude has fallen by over 70%. This means that the government no longer has enough dollars to give to fuel importers. A lay man should be able to understand this. With the competition that will set in from the open market, it s expected that these pump price of fuel will naturally crash in time.

RevDesm0ndJuju:


Crass nonsense...

Then why are the state owned NNPC retail stations selling at 145 naira when they get to import fuel at the prevailing 199 naira?

Or is the cost of refining crude to petrol in the now technically operational state owned refineries commiserate to that of imported fuel bought at the pseudo official rate of 289 naira?

Use sense ab0ki

DaudaAbu:


The NNPC also selling at 145naira is a different argument entirely. Labour might raise that point and make it a basis for embarking on industrial action.

The FG has also always insisted that even if the refineries work at optimum capacity they can only produce 40% of the nations fuel needs. Their level of production now i cannot state.

And the aboki part is uncalled for. Hope your own sense is working optimally

jlinkd78:
From 86.50k to 145 naira is a 67% increment. Only u know how u got 38%. {(145-86.5)/86.5 }*100=67.6%. This is simple BODMAS and its basic arithmetic. If u can't get simple percentage increment u are just a misfit analysing or defending this obvious medieval administration.

RevDesm0ndJuju:

No blame am
Arabic studies takes precedence over mathematics in the desolate parasitic north