nairalanda1:


Also, a big problem I have with you Nigerians is that you guys think that everything is too expensive, and that prices must be beaten down.

Having worked in the private sector for most of my working life...and having had my salaries and at one point my job security threatened by people not paying my employer on time because 'it is too expensive'....

Plus, at the end, we are , for the first time since 1973, learning how much fuel really costs. And it is a shock, but eventually, economics would do its thing. Of course, prices won't return to the low levels it used to be, but it would fall nonetheless.

Remember GSM? So expensive in the begining, then competition brought prices down.

How much does fuel really cost

nairalanda1:


It's not laziness (though the reasons why paper manufacturing in Nigeria failed is a long story..and it has more to do with globalization comming in from the 1990's onward, which meant that imports suddenly flodded the Nigerian market...eg at the start of 1990, most of the books I used in school were made in Nigeria..exercise books, by 1996, imported stuff from Indonesia...Paperline was coming in, and it was better, Nigeria could not compete) it is because in 1973, we decided that fuel had to be sold at a cheap price, which meant that prices for fuel got too too cheap for the refineries over time to function well.

it's still d same thing u r talking about... D paper mill collapse because we don't want to compete is dat not laziness...have we not seen countries banning import of goods they have the capacity of producing? But no in Nigeria, we don't want to produce... We believe it's cheaper to import... Go to d Nigerian paper mill in jebba or d ajaokuta steel company, or go to ekiti or ondo and see abandoned cocoa plantations wasting away if u won't weep for dis nation

nairalanda1:


Removing subsidy is more like dealing with the source of the high libido, not cutting anything (and I don't advise self mutilation by the by )


The problem with subsidy is that the difference between the production and transport cost AND the subsidized retail price is always growing...and it keeps growing, until one day, we wake up and we are shoveling all our oil revenue, AND borrowed money to pay for subsides.

Add the fact that oil revenues have not been sufficient for us for years, and the naira value is falling, ....and at the end, we could be spending far more than we earn to keep fuel cheap.

At some point, IMF would start telling us to get our house in order, or no more loans.

It's a mess, personally I think we need subsidy because people are poor (me mask slipped), but if we do not want to end up like Sri Lanka , we have to remove subsidy now.

too much grammar over something very simple. The simple problem with Nigeria is systemic corruption. If you like raise the price of fuel to #1000 it won't improve anything.

Nigeria can only progress when corruption is nipped in the bud. Tinubu will finish in 4yrs and Nigeria will remain the way it's. Kill Corruption not the people.

Countries around the world who produce oil also have neighbours whr this oil is sold much more expensive than their own market. Did dey inflate the price just to reduce the oil from being exported? Refining crude is the only solution not all this grammar.

The price of wheat in Ukraine and South Africa can never be the same. You know why? Ukraine produces wheat and has absolute advantage in the production of this wheat. It will only bcom foolish for Ukraine to export wheat to South Africa and import bread at a more expensive price from same south Africa. This is common economics.

Different govt's come in and spend billions on TAM of refineries, yet non is functional. Subsequent govt comes, does no investigation and probing of the predecessor and continues in same wastage.

nairalanda1:


Which is part of the problem in a way.

Now in other secotros where there is no subsidy, does stealing of the same kind happen? No.

And even without stealing...at the end, the prodiuction cost is always rising beyond the subsidsed price. At some point we would be spending more than our revenue earned....and where would we be? Broke.

Fixing power won't solve the problem, nor would fixing corruption...and WE SHOULD DO BOTH. But so long as production and transport costs keep rising...and this is true even if we refine at home, subsidy costs will rise and rise till we reach peak problems.




That's why we have to do the hard work of democracy. Hold people accountable., It's what they do in sane countries.

Crying about how they would steal the money does not do anything.


That's what was said in 1993, 2006, 2012, and many times over. Now we are borrowing to pay most of the subsidy. If not all. Something had to give.

There was no subsidy in Nigeria Airways, Nitel, Nipost, NRC, etc yet they found s way to run them aground. Subsidy was never the cause of corruption bro. Rather it was a victim.

Judolisco:
it's still d same thing u r talking about... D paper mill collapse because we don't want to compete is dat not laziness...have we not seen countries banning import of goods they have the capacity of producing? But no in Nigeria, we don't want to produce... We believe it's cheaper to import... Go to d Nigerian paper mill in jebba or d ajaokuta steel company, or go to ekiti or ondo and see abandoned cocoa plantations wasting away if u won't weep for dis nation

Yeah, but at the end of the day,the issue with refining is that under subsidy, it was not profitable....because subsidy meant that in essence, refineries sold petrol at a loss. Or marketers sold at a loss, and did not have enough money to pay refineries, and the subsidy paid did not cover losses adequately.

At least the paper mill's problems on the other hand was years of monopoly, and not being an active exporter. That meant that when the market was opened in the 90's, they could not compete with better imported products.

franciskaine:
too much grammar over something very simple. The simple problem with Nigeria is systemic corruption. If you like raise the price of fuel to #1000 it won't improve anything.

Nigeria can only progress when corruption is nipped in the bud. Tinubu will finish in 4yrs and Nigeria will remain the way it's. Kill Corruption not the people.

Countries around the world who produce oil also have neighbours whr this oil is sold much more expensive than their own market. Did dey inflate the price just to reduce the oil from being exported? Refining crude is the only solution not all this grammar.

Exactly!! They keep saying things like government doesn't have any business running business. Really? Who is better placed to run a business if not government? They have both the yam and the knife. They can make business favourable decisions. But no, they have to find a way to punish the majority for the crimes of a minority.

emorse:

There was no subsidy in Nigeria Airways, Nitel, Nipost, NRC, etc yet they found s way to run them aground. Subsidy was never the cause of corruption bro. Rather it was a victim.

1,Nigeria Ariways...badly managed. (for example, people were not paying excess luggage...loss of money) plus probably cheaper than other competitors. Result..losses

2.Nitel: Heavily subsidized. Even their mobile arm Mtel was so subsidised, that at the end they could not make the profits needed to compete with MTN and co....result losses

3.Nipost: NiPOST works very well,thank you very much. It is just that emails, SMS and whatsapp have replaced letter writing which was its bread and butter...and the telephone replaced telegraphs long time ago.

4.NRC: Run badly. Very badly..pjus even now tickets are cheap. (British railways was a mess till it was privatised..today it runs very well).

franciskaine:
too much grammar over something very simple. The simple problem with Nigeria is systemic corruption. If you like raise the price of fuel to #1000 it won't improve anything.

Nigeria can only progress when corruption is nipped in the bud. Tinubu will finish in 4yrs and Nigeria will remain the way it's. Kill Corruption not the people.

Countries around the world who produce oil also have neighbours whr this oil is sold much more expensive than their own market. Did dey inflate the price just to reduce the oil from being exported? Refining crude is the only solution not all this grammar.

Well, we can remove corruption...and we should...but at the end the rising cost of production means rising cost of subsides means rising budget deficits means more and more borrowing.

Dealing with corruptuon would only slow down the problem. Not solve it.

(And we should fight corruption...it is our corrupt political class that makes me cynical about our mainstream parties).

nairalanda1:


As an example, the National Assembly, according to Oseni of Arise, is to spend 110 billion this year.

Let's assume we have to cut 70 billion of that, and spend it on subsidy.

The subsidy cost for this year alone cost N3trillion naira. At the end, it won't make much of a difference.

I agree we need to cut the big salaries of politicians though. No argument from me there.

Let's cut anything cuttable!
I detest the earnings of politicians.
It's cheating to the minimum wage, civil servants wages and sense of belonging of a common man. Everyone should earn moderate while working for govt. Focus should be on pensions. Meaning you enjoy later after paying your dues.

Padipadi:

Let's cut anything cuttable!
I detest the earnings of politicians.
It's cheating to the minimum wage, civil servants wages and sense of belonging of a common man. Everyone should earn moderate while working for govt. Focus should be on pensions. Meaning you enjoy later after paying your dues.

Like I said, you would get no argument from me about cutting politicians salaries and monies

But the savings earned won't pay for subsidy at all. Not by any margin.

nairalanda1:


Well, we can remove corruption...and we should...but at the end the rising cost of production means rising cost of subsides means rising budget deficits means more and more borrowing.

Dealing with corruptuon would only slow down the problem. Not solve it.

(And we should fight corruption...it is our corrupt political class that makes me cynical about our mainstream parties).

what is actually this rising cost of production? The rising cost of production you keep emphasising on is nothing but the cost of refining abroad, importation and transportation of this petrol to the end user in Nigeria. Govt can borrow money to build rail, build roads, pay civil servants, but the same govt can't borrow money to build refineries.

Govts will always tell you why subsidy should be removed, but will never tell you why billions spent on maintaining and fixing our refineries never worked.

How can you as a govt spend billions to repair refineries, nothing is done and you still won't investigate the people who you awarded the contracts to.

How does dealing with corruption slow down the problem? And removing subsidy bring about a solution?

Since 1985, one form of subsidy is being removed on petrol even till date, hence the almost yearly price increment by different administration, yet no foreseeable progress. This should tell you that subsidy removal is not the solution but just a mere scratch on the surface of the problem.

BreconHills:


If subsidy had continued you would have known what suffering is. Thank your stars you have President with some courage

Stop talking bullshit.

All these social media quasi economists sef

nairalanda1:


Like I said, you would get no argument from me about cutting politicians salaries and monies

But the savings earned won't pay for subsidy at all. Not by any margin.

Maybe you are a politician, that's why you avoided talking about their earnings. The best way to tell a child to fast is when you also fast. Our leaders are not doing the job that warrant their earnings. That's why the refineries broke down. Many people deserved to be held accountable.

OlujobaSamuel:

To add to this.
In 2012, GEJ removed the subsidy then later went back to a partial removal, sure P was introduced to cushion the effect. However, sure P was poorly Abi corruptly managed, the subsidy cost kept increasing even beyond the previous cost beyond partial removal.
Bubu came, claimed subsidy has been removed, a new subsidy was introduced, that is, logistic and storage cost , which also kept increasing.
I actually think it's best we do away with it.
GEJ would have been the best person to remove it, 3things worked against him then; it was done during festive(new year day), the subsidy cost grew beyond imagination in less than few months under him, he do not have control of the party then(as the party would have put in effort in the media to protect the decision)

You re trying to be clever by half coz u re a tinubu supporter.

I didn't see you state the fact that tinubu was a major thing that caused GEJ's failure of subsidy removal. U forgot to mention how tinubu and his party sponsored protests all over Nigeria.

Cost of petrol in some oil producing countries

Venezuela N2; Libya N14; Iran N13; Angola N122; Algeria N156; Kuwait N158; Egypt N173; Kazakhstan N224; Nigeria N488; Iraq N264; Qatar N266; Saudi Arabia N287; Ecuador N292; Russia N299; Sudan N405; Indonesia N391; Colombia N323; India N582; Norway N959; Mexico N652; Brazil N482; UAE N357; Canada N624

Some of your figures here are wrong. take for instance a litre of PMS in Qatar is 2QAR and there are different specification, which is equivalent to N400 and not N266 as given

Padipadi:

Maybe you are a politician, that's why you avoided talking about their earnings. The best way to tell a child to fast is when you also fast. Our leaders are not doing the job that warrant their earnings. That's why the refineries broke down. Many people deserved to be held accountable.

What part don't you understand , where I said, that I won't argue with you that we should cut politicans salaries. Indeed we must and should cut the politicans salaires.

The issue where we disagree is....the monies raised from cutting the salaries won't be enough to pay for subsidies as it stands.

franciskaine:
what is actually this rising cost of production? The rising cost of production you keep emphasising on is nothing but the cost of refining abroad, importation and transportation of this petrol to the end user in Nigeria. Govt can borrow money to build rail, build roads, pay civil servants, but the same govt can't borrow money to build refineries.

And we are importing in part because subsidising fuel left our domestic refineries with limited money to pay for maintenance, and to upgrade. Corruption did the rest...we lost 4 refineries.

Govts will always tell you why subsidy should be removed, but will never tell you why billions spent on maintaining and fixing our refineries never worked.

Because at the end, so long as the refineries cannot make money from selling any refined fuel, we would end up with money being thrown down a big hole all the time.

Millions of naira are spent on GSM facilites evey year...and they work because they make back that money and more via profits...and are not forced to sell airtime at subdisised prices.

Remove the profit motive, evil and wuru wuru results. Allow refineries to make a profit by removing subsidy, and there would be no corruption and stealing BECAUSE doing so would harm profits.

How can you as a govt spend billions to repair refineries, nothing is done and you still won't investigate the people who you awarded the contracts to.

They should be investigated.

How does dealing with corruption slow down the problem? And removing subsidy bring about a solution?

Because it does nothing about the cost of producing and transporting fuel. And the amount consumed per year...which all rise and all lead to rising in subsidy costs.

Since 1985, one form of subsidy is being removed on petrol even till date, hence the almost yearly price increment by different administration, yet no foreseeable progress. This should tell you that subsidy removal is not the solution but just a mere scratch on the surface of the problem.

It is called partial removal of subsidy.

For fun, in 1981, fuel cost 15 KOBO per liter. By 2016, NNPC was saying that fuel would cost N165 if refined in Nigeria.

Let's assume, for fun, that NNPC kept fuel prices at 15 kobo from 1981 to 2015, that means that subsidy costs would have risen from N0 to N165. per liter

Add consumption numbers...which would rise, as well as budget numbers...and we could end up spending far more than our income on subsides.

That's why government partially removes subsides from time to time....so as to afford them...and why fuel no longer costs 15 kobo, or 75 kobo or N11 as it did in 1981, 1991, and 1995 respectively. If they did not , we would have long since run out of money.

This is what we keep telling barefaced liars that are our politicians nobody has mentioned the high cost of maintaining our political offices in the country that is the actual drain on the generated resources as well as the dysfunctional refining capacity. Soon the holidays will be over and people'll see the real issues that continues to keep a supposed wealthy country poor and mismanaged

nairalanda1:


And we are importing in part because subsidising fuel left our domestic refineries with limited money to pay for maintenance, and to upgrade. Corruption did the rest...we lost 4 refineries.



Because at the end, so long as the refineries cannot make money from selling any refined fuel, we would end up with money being thrown down a big hole all the time.

Millions of naira are spent on GSM facilites evey year...and they work because they make back that money and more via profits...and are not forced to sell airtime at subdisised prices.

Remove the profit motive, evil and wuru wuru results. Allow refineries to make a profit by removing subsidy, and there would be no corruption and stealing BECAUSE doing so would harm profits.




They should be investigated.



Because it does nothing about the cost of producing and transporting fuel. And the amount consumed per year...which all rise and all lead to rising in subsidy costs.




It is called partial removal of subsidy.

For fun, in 1981, fuel cost 15 KOBO per liter. By 2016, NNPC was saying that fuel would cost N165 if refined in Nigeria.

Let's assume, for fun, that NNPC kept fuel prices at 15 kobo from 1981 to 2015, that means that subsidy costs would have risen from N0 to N165. per liter

Add consumption numbers...which would rise, as well as budget numbers...and we could end up spending far more than our income on subsides.

That's why government partially removes subsides from time to time....so as to afford them...and why fuel no longer costs 15 kobo, or 75 kobo or N11 as it did in 1981, 1991, and 1995 respectively. If they did not , we would have long since run out of money.

you keep talking about subsidy cost without first telling us the actual cost of refining a petroleum product. How much does it cost to refine a litre of petrol?

Tell us what is the actual cost of refining a litre of petrol and we will do the maths to ascertain what selling price is actually good for business.

Go and check all countries petrol is sold cheaper than Nigeria, and you'll notice one common factor. They produce and refine what they consume. You are talking of subsidy because you still import petrol. Stop d importation and start producing.

Well done! Kindly indicate which Fx rate you used. Thank you once again

nairalanda1:


There is nothing like preparation for subsidy removal.

The arguments that have been used against subsidy removal are not new. They have been the same ones over and over again.

Anyway, we can't even pay for subsides now, even if we wanted to. Thanks to years of mismanagement and low oil revenues, and corruption, we are now in borrowing mode for subsidy. Keeping it means we keep on borrowing.

And if you want subsidy, that means more borrowing again.

At some point, we face reality, or we end up with IMF forcing us to do so.

there was no subsidy! Who are the companies they have been paying it to

nairalanda1:


If they kept the subsidy...we would have eventually run out of money...and IMF would have refused to borrow us money anymore.

Then true suffering would start.

Forget all these lies been fed to you by the Nigerian government. Tell the politicians to reduce their massive wages and allowances and also cut down on their corrupt tendencies then we would be saving enough money for our needs.
It is their fault that none of our refineries are working because of the sleeze that goes on in the oil sector daily. Imagine a country like Venezuela selling fuel for 2N?
These are the kind of investigative journalism that I expect our brown envelop journalists to carry out but nay. They would rather be praise singing these devils we have in power.

bionixs:
there was no subsidy! Who are the companies they have been paying it to

Then why are you in support of its restoration?

There was a subsidy, otherwise you would have been paying as high as N600 by September 2022.

Subsidy monies go to NNPC,(for selling below what it costs to import fuel) then transporters (to keep prices uniform across the nation which is why fuel cost the same in Kano and Lagos and Aba till June 1).

BreconHills:


It sounds like you are having challenges coming to terms with who the President is. In which case any discussion economic or otherwise with you is wasted since its emotional for you.

My wife's primary school employs 45 plus staff so you can bet I understand what is going on. I also know what we and our competitors are doing. If you've run your business and stacked your reserves this is time to spend it. If you are under capitalised this is time to do it. If you can't survive this is time to merge or sell out. If you know any schools wishing to sell out on the mainland let me know.

I wish you know what is going on. From your initial post you lack empathy. I still perceive pride and arrogance in the later.

I wish you know they are those that don't have capital to capitalize, don't have nothing to merge

Which problem do I have coming to terms with tinubu. He is not more than any politician. That stolen the common wealth of the poor. Because he is your Kingsman, you believe he will change Nigeria to eldorado .

Keep defending them.

themanderon:


Forget all these lies been fed to you by the Nigerian government. Tell the politicians to reduce their massive wages and allowances and also cut down on their corrupt tendencies then we would be saving enough money for our needs.
It is their fault that none of our refineries are working because of the sleeze that goes on in the oil sector daily. Imagine a country like Venezuela selling fuel for 2N?
These are the kind of investigative journalism that I expect our brown envelop journalists to carry out but nay. They would rather be praise singing these devils we have in power.

1.Venezuela sells fuel for N2, and also

a) Loses billions to petrol smuggling...as much as 18 billion dollars a year

b) Has severely lost most of its domestic refining capacity in part because PDVSA does not make enough money to keep the refineries running well.

2.We have to cut politicans money, because it is too much. But it won't pay for the subsidy costs at all.

franciskaine:
you keep talking about subsidy cost without first telling us the actual cost of refining a petroleum product. How much does it cost to refine a litre of petrol?

Tell us what is the actual cost of refining a litre of petrol and we will do the maths to ascertain what selling price is actually good for business.

Well it is around 445 naira or thereabouts. At least it isn't below N300.

Go and check all countries petrol is sold cheaper than Nigeria, and you'll notice one common factor. They produce and refine what they consume. You are talking of subsidy because you still import petrol. Stop d importation and start producing.

[/quote]

And they do that because

1.They can afford both subsides and keeping up their refineries

Libya sells petrol below N20 per liter...and earns revenue from selling 1.8 million barrels of crude a day...whcih it shares among 7.8 million people.

Nigeria at best produces 2 million barrels of crude a day...which it has to share revenue from..among 220 million people.


2.Also, all those countries have massive debt as a result.

Iran subsidsies fuel...AND even has working refineries...AND even has electricity working well....

The problem is at the end of the day, they spend twice their revenue from oil on subsides, and have a very heavy extenral debt. And when the government there suggests removing subsidy....


3.And then there is Venezuela. Heavy subsides...and losses from smuggling of up to 18 billion dollars, and diminished refining capacity...because their refineries cannot make enough money to pay for maintenance...it is what happens when you sell fuel at N12 a liter.

nairalanda1:


1.Venezuela sells fuel for N2, and also

a) Loses billions to petrol smuggling...as much as 18 billion dollars a year

b) Has severely lost most of its domestic refining capacity in part because PDVSA does not make enough money to keep the refineries running well.

2.We have to cut politicans money, because it is too much. But it won't pay for the subsidy costs at all.

Again I say do not allow these politicians fool you. I have been in the system so I know what I am saying. They should cut down on their massive wage bill and cut down on the sleaze. Only then would we save money to meet the needs of the people.
Nigeria has always had money but judicious spending of the money is a problem because we have idiotic criminals who know nothing but looting running the government.

Tayorshd87:


Not true they are not suffering us ..is actually for our own and developmental benefits

So said by the paid trolls of the APC.

I'm relocating to Algeria

themanderon:


Again I say do not allow these politicians fool you. I have been in the system so I know what I am saying. They should cut down on their massive wage bill and cut down on the sleaze. Only then would we save money to meet the needs of the people.
Nigeria has always had money but judicious spending of the money is a problem because we have idiotic criminals who know nothing but looting running the government.

Like you did not read my post

I SAID...that WE SHOULD CUT POLITICANS salaries and money WELL WELL

Once again, we should cut politicans salaries well well

In case you did not hear me...WE SHOULD CUT POLITICANS MONEY WELL WELL WELL.




But the money raised won't even pay for one quarter of what we need for subsides this year.


Modified

We spent N169 BILLION on Nigerian National Assembly this year.

Meawhile 3.6 trillion was budgeted for subsidy for the first six months of this year.

At the end, even if we made the national assembly give up all its money, it won't pay for subsidies for a month, talkless of a year.

Buddha3:
What is "non-alcoholic beer" please?

There are non alcoholic beers now. Have you not seen them before ni?

Some people dey discuss pen11s, libido and vaaagina inside petrol thread.

U go fear analogy na.