IbeOkehie:


Please think through whatever argument you're making in order to make sense to any person with even rudimentary knowledge. And this issue is a VERY SIMPLE one to figure out. First of all, what what the exchange rate in the period 2010 to 2012? Maybe petrol stations in Nigeria should start charging in dollars!

Secondly, most petrol or gasoline used in Nigeria right now and for many years has been imported from the USA and Europe. As of today, the price of petrol traded on the commodity exchanges in the USA is $2.51 per gallon or $0.62 per liter. Here's the link for a live quote:

https://www.investing.com/commodities/gasoline-rbob

The cost in naira should be 0.62 X 1530 = ₦941 per liter + transportation, taxes and fees.

That's the price NNPC or whoever pays to import petrol from USA or Europe. So what price should Nigerians pay for the product?

This is NOT a complicated matter at all.

Good Luck to Nigeria.

So you know it is the exchange rate that has changed and that is the exchange rate that is the cause for the increase in the price of petrol locally in Nigeria because your friend seems to be ignorant of this.

Why has the Naira been losing its value consistently since 2009? The Naira appreciated between 2003 and 2008 from about 145 down to 116 Naira. The Naira only lost value in 2008 because of the global financial crisis in 2008, even then it only depreciated to 124 Naira.

What special thing did the Obasanjo administration do to maintain the value of the Naira that all other administrations have failed to do? He maintained an excess crude account, reduced our debt and grew our External reserves. How difficult is this?

these are the issues I expect any serious-minded Nigerian to be speaking on and not increasing the price of petrol due to the government's failure to maintain the exchange rate.

from your past comments, you seem to believe you have capitalist views, yet the policies you support kill any possibility for capitalism to flourish. So many companies have been shut down after the increase in the price of petrol.

The Tinubu government could have reduced the cost of governance, and increased tariffs and taxes on Cars, electronics, clothes and other things richer Nigerians spend money on. This would have reduced the pressure on the naira and helped to re-establish an excess crude account.

Your friend believes that by simply increasing the price of fuel, Nigeria will become a flourishing nation. do you understand me a bit better now?

There was a country.

Badb0y4lyf:


You this guy I remember last two year when you was rigorously canvassing for removal of subsidies I pointed out this same issue facing us at the moment and I opined that subsidy cannot be totally removed that it’s impossible now the NNPC is paying 3 times more than before and yet things as astronomically increased over time. Tell me what has been the Gain of subsidy removal. ?? If you can give me 3 good point then I would be sold on your subsidy removal campaign.

I hate to tell you, but the government is still subsidizing petrol AND the naira is not in a free float. That's just the truth. Sorry.

Tianamen1:


So you know it is the exchange rate that has changed and that is the exchange rate that is the cause for the increase in the price of petrol locally in Nigeria because your friend seems to be ignorant of this.

Why has the Naira been losing its value consistently since 2009? The Naira appreciated between 2003 and 2008 from about 145 down to 116 Naira. The Naira only lost value in 2008 because of the global financial crisis in 2008, even then it only depreciated to 124 Naira.

What special thing did the Obasanjo administration do to maintain the value of the Naira that all other administrations have failed to do? He maintained an excess crude account, reduced our debt and grew our External reserves. How difficult is this?

these are the issues I expect any serious-minded Nigerian to be speaking on and not increasing the price of petrol due to the government's failure to maintain the exchange rate.

from your past comments, you seem to believe you have capitalist views, yet the policies you support kill any possibility for capitalism to flourish. So many companies have been shut down after the increase in the price of petrol.

The Tinubu government could have reduced the cost of governance, and increased tariffs and taxes on Cars, electronics, clothes and other things richer Nigerians spend money on. This would have reduced the pressure on the naira and helped to re-establish an excess crude account.

Your friend believes that by simply increasing the price of fuel, Nigeria will become a flourishing nation. do you understand me a bit better now?

I've stated clearly on earlier comments why the naira has lost value - it's is a result of massive money printing by APC controlled Federal Governments since 2015. I hope you read all the news and data that came out on this issue. It was a crazy policy.

The PDP governments of Obasanjo and Jonathan had good macroeconomic controls. If Nigerians had allowed Jonathan to remove fuel subsidies AND given him another term with Ngozi Iweala as Finance Minister, Nigeria would be a much better place today.

Elsueno:

U this nigga, u dey always around defending ur oppressors & the elites.... Anytime talk about taxes, subsidy or electricity is brought about, U crawl out of ur cave & vehemently defend the political elite with every fibre of ur being.

So far Ur masters had don every single thing you mentioned but INSTEAD THEY MADE the economy so catastrophic to d extent they are even lost & confused on how to bring it back the way it was.

Like I always said, agbadorians like Helinues are very straight forward with thier allegiance. But people like u who pretend 'neutral' while stylishly defending incompetence, embezzlement & chronic capitalism are extremely dangerous

If you resent @Nairalanda so much, what do you say about those who VOTED for the APC governments that have destroyed the economy Wow, take it easy abeg.

People have a right to a government of their choice in a democracy. Nigerians chose wrong and are living with the consequences.

Good Luck to Nigeria.

ufotunang:
If refineries were working all this issues and problems would not arise... nawaoooo.. Nigeria one step forward, two steps backwards

Many of you keep holding on to this myth that once the refineries are ready, the petrol queues would vanish.

How will the refineries working end the fuel queues? Why may I ask are there no queues for diesel and kerosene?

Dangote can produce enough petrol to cater to Nigerias needs and have extra for export. So why is there still scarcity?

The reason is simply: petrol subsidies.

The petrol price is neither market or price reflective. It is sold below it's market price. Will you sell your product cheaper than what it cost to produce it? That's why there's scarcity. Until the price of petrol is fully deregulated as done with diesel and kerosene, the threat of scarcity would always loom.

The government owes international oil traders $6bn for petrol. They have now become reluctant in supply petrol until their debt is settled.

Dangote has always maintained he will sell his refined oils at a market reflective price.

Many believe that once petrol is refines locally, the price of it will become so cheap that it will be lower than the subsidized price make the need for a subsidy unnecessary.

This isn't true. Dangote if I am correct sells a litre of diesel at 1,100.

Last year when I last checked, 1 litre of bonny light crude oil sold for 47cents. Multiply that by 1,500 and you get N705. If a litre of crude oil cost 705, how will a litre of petrol be sold below that price?

Some days ago, my relative was saying he wishes the refineries start producing petrol so that the price would crash to 250/litre. Honestly speaking, I did not know whether to laugh or cry.

IbeOkehie:


I've stated clearly on earlier comments why the naira has lost value - it's is a result of massive money printing by APC controlled Federal Governments since 2015. I hope you read all the news and data that came out on this issue. It was a crazy policy.

The PDP governments of Obasanjo and Jonathan had good macroeconomic controls. If Nigerians had allowed Jonathan to remove fuel subsidies AND given him another term with Ngozi Iweala as Finance Minister, Nigeria would be a much better place today.

During the COVID pandemic, a lot of countries printed out money. Your understanding of this matter is at the knowledge of the general public level and not in any way academic. Britain printed out money, America printed out money, and many African countries printed out money, yet only the naira is falling massively in value. the printed money has caused inflation in a lot of countries but their currencies have remained competitive against each other.

Nigeria's debt to GDP is relatively low compared to other countries so do not claim that Nigeria printed out a larger proportion of money as this would be false too.
Every government after Obasanjo has failed to maintain our Excess crude account. the Saudi Riyal has not fallen because Saudi Arabia has a massive sovereign wealth fund. The Russian Ruble has not fallen because the Russians have massive savings. the Indian Rupee has not fallen because the Indians also have massive savings. Why is it so hard for Nigerians to understand basic facts? Our spending is the problem. our lack of savings is the problem.

https://www.weforum.org/agenda/2020/11/covid-19-has-countries-borrowing-money-just-about-as-quickly-as-they-can-print-it/
https://moneyweek.com/economy/uk-economy/602273/bank-of-england-gbp150bn-money-printing
https://www.usatoday.com/in-depth/money/2020/05/12/coronavirushow-u-s-printing-dollars-save-economy-during-crisis-fed/3038117001/
https://tradingeconomics.com/nigeria/government-debt-to-gdp#:~:text=Nigeria%20recorded%20a%20Government%20Debt%20to%20GDP%20of,7.30%20percent%20of%20GDP%20in%202008.%20source%3A%20IMF
https://nairametrics.com/2022/07/29/how-nigerias-excess-crude-account-got-depleted/

grandstar:


Many of you keep holding on to this myth that once the refineries are ready, the petrol queues would vanish.

How will the refineries working end the fuel queues? Why may I ask are there no queues for diesel and kerosene?

Dangote can produce enough petrol to cater to Nigerias needs and have extra for export. So why is there still scarcity?

The reason is simply: petrol subsidies.

The petrol price is neither market or price reflective. It is sold below it's market price. Will you sell your product cheaper than what it cost to produce it? That's why there's scarcity. Until the price of petrol is fully deregulated as done with diesel and kerosene, the threat of scarcity would always loom.

The government owes international oil traders $6bn for petrol. They have now become reluctant in supply petrol until their debt is settled.

Dangote has always maintained he will sell his refined oils at a market reflective price.

Many believe that once petrol is refines locally, the price of it will become so cheap that it will be lower than the subsidized price make the need for a subsidy unnecessary.

This isn't true. Dangote if I am correct sells a litre of diesel at 1,100.

Last year when I last checked, 1 litre of bonny light crude oil sold for 47cents. Multiply that by 1,500 and you get N705. If a litre of crude oil cost 705, how will a litre of petrol be sold below that price?

Some days ago, my relative was saying he wishes the refineries start producing petrol so that the price would crash to 250/litre. Honestly speaking, I did not know whether to laugh or cry.

My problem with the subsidy talk is that there is no benefit in focusing on it. Even if you raise the price of petrol and eliminate whatever "subsidy" the government is paying, the naira will still fall in value thus necessitating further payments of subsidies and further increases in prices. This should be obvious to every Nigerian by now. We have witnessed this phenomenon for over 40 years now. madness is repeating the same actions and expecting different results.
Nigeria needs to cut costs, reduce the importation of none-productive goods, manage its savings (excess crude account) and educate its people to stabilize the value of the Naira. The loss in the value of the naira necessitates the government paying for subsidies. this should be obvious by now.

Tianamen1:

During the COVID pandemic, a lot of countries printed out money. Your understanding of this matter is at the knowledge of the general public level and not in any way academic. Britain printed out money, America printed out money, and many African countries printed out money, yet only the naira is falling massively in value. the printed money has caused inflation in a lot of countries but their currencies have remained competitive against each other.

I only got this far and the lack of insight or information on the issue is clear.

Yes, the USA & UK printed a lot of money and the results are similar to what happened in Nigeria. I live in the USA and I can tell you we've had a high level of inflation since the government increased the money supply. The inflation is so bad that it's the number one issue in the upcoming elections.

Yes the MAGNITUDE of price inflation here isn't as much as in Nigeria, but it has been uncomfortable, I've made many comments on this fact all over Nairaland. The reason for the lower rate of inflation in the USA is likely that it has a higher productivity than Nigeria. The most important lesson in all this is that ECONOMICS works the same everywhere.

It's not only the naira that is falling massively in value. What about Zambia that has been grappling with a currency crisis for at least a year now? What about Ghana, go check their economy now and they were touted as the next African Miracle just a few years ago.

Nigeria needs as much free market policy as it can get. I've repeatedly outlined THE solutions to the Nigeria Crisis. It's a pity the people of Nigeria did exactly the opposite by electing APC in 2015, yeah the party whose leaders told Nigeria "there is nothing like subsidy" and "subsidy doesn't exist" I loooove it when people suffer the consequences of their choices in such a stark and undeniable way.

grandstar:


Many of you keep holding on to this myth that once the refineries are ready, the petrol queues would vanish.

How will the refineries working end the fuel queues? Why may I ask are there no queues for diesel and kerosene?

Dangote can produce enough petrol to cater to Nigerias needs and have extra for export. So why is there still scarcity?

The reason is simply: petrol subsidies.

The petrol price is neither market or price reflective. It is sold below it's market price. Will you sell your product cheaper than what it cost to produce it? That's why there's scarcity. Until the price of petrol is fully deregulated as done with diesel and kerosene, the threat of scarcity would always loom.

Oga go and rest....THERE IS NOTHING LIKE SUBSIDY....Buhari & Tinubu told me so in 2015. We're Nigerians, no be statistics we go chop ...see useless grammar, cost reflective ko, mirror reflection ni.

This is Nigeria, the principles of economics don't apply in this country!!!!

Good Luck to Nigeria.

IbeOkehie:


I only got this far and the lack of insight or information on the issue is clear.

Yes, the USA & UK printed a lot of money and the results are similar to what happened in Nigeria. I live in the USA and I can tell you we've had a high level of inflation since the government increased the money supply. The inflation is so bad that it's the number one issue in the upcoming elections.

Yes the MAGNITUDE of price inflation here isn't as much as in Nigeria, but it has been uncomfortable, I've made many comments on this fact all over Nairaland. The reason for the lower rate of inflation in the USA is likely that it has a higher productivity than Nigeria. The most important lesson in all this is that ECONOMICS works the same everywhere.

It's not only the naira that is falling massively in value. What about Zambia that has been grappling with a currency crisis for at least a year now? What about Ghana, go check their economy now and they were touted as the next African Miracle just a few years ago.

Nigeria needs as much free market policy as it can get. I've repeatedly outlined THE solutions to the Nigeria Crisis. It's a pity the people of Nigeria did exactly the opposite by electing APC in 2015, yeah the party whose leaders told Nigeria "there is nothing like subsidy" and "subsidy doesn't exist" I loooove it when people suffer the consequences of their choices in such a stark and undeniable way.

The American dollar has been amongst the strongest fiat currencies in the world since 2022. this is evidenced by the dollar index (dxy).
https://www.tradingview.com/symbols/TVC-DXY/

Nigeria is not only suffering from inflation but also from a collapsing Naira.

I mentioned earlier that Obasanjo's administration improved the value of the Naira by managing the excess crude account and growing our foreign reserves. the prudent management of our oil revenues would have prevented all this mess.

Conclusion.
When increases in the local price of petrol are caused by the falling value of the Naira, removing subsidies only punishes the masses and will lead to higher prices invariably necessitating the re-introduction of subsidies and the further removal of "subsidies".

When increases in the local price of petrol are caused by increases in the global price of crude oil, the government needs to push the increased costs to the Nigerian masses. (proper subsidy removal)

grandstar:


Many of you keep holding on to this myth that once the refineries are ready, the petrol queues would vanish.

How will the refineries working end the fuel queues? Why may I ask are there no queues for diesel and kerosene?

Dangote can produce enough petrol to cater to Nigerias needs and have extra for export. So why is there still scarcity?

The reason is simply: petrol subsidies.

The petrol price is neither market or price reflective. It is sold below it's market price. Will you sell your product cheaper than what it cost to produce it? That's why there's scarcity. Until the price of petrol is fully deregulated as done with diesel and kerosene, the threat of scarcity would always loom.

The government owes international oil traders $6bn for petrol. They have now become reluctant in supply petrol until their debt is settled.

Dangote has always maintained he will sell his refined oils at a market reflective price.

Many believe that once petrol is refines locally, the price of it will become so cheap that it will be lower than the subsidized price make the need for a subsidy unnecessary.

This isn't true. Dangote if I am correct sells a litre of diesel at 1,100.

Last year when I last checked, 1 litre of bonny light crude oil sold for 47cents. Multiply that by 1,500 and you get N705. If a litre of crude oil cost 705, how will a litre of petrol be sold below that price?

Some days ago, my relative was saying he wishes the refineries start producing petrol so that the price would crash to 250/litre. Honestly speaking, I did not know whether to laugh or cry.

.. when there is competition in the petroleum refinery oil sector where we have other modular refineries in Nigeria producing and refining fuel and other petroleum products... fuel disel and other petroleum products will be in abundant and competition among the refineries will reduce and bring down the price of fuel disel and other petroleum products and make it cheap and affordable for nigerians to buy...but with only Dangote operating the petroleum refinery sector he will monopolize and control the petroleum reserve sector and dictate the price of fuel disel and other petroleum sector and do anything he feels like doing to the disadvantage to nigerians because of monopoly.. monopolizing the sector..in which monopoly is bad..so competition is needed in the petroleum refinery oil sector in Nigeria

ufotunang:
.. when there is competition in the petroleum refinery oil sector where we have other modular refineries in Nigeria producing and refining fuel and other petroleum products... fuel disel and other petroleum products will be in abundant and competition among the refineries will reduce and bring down the price of fuel disel and other petroleum products and make it cheap and affordable for nigerians to buy...but with only Dangote operating the petroleum refinery sector he will monopolize and control the petroleum reserve sector and dictate the price of fuel disel and other petroleum sector and do anything he feels like doing to the disadvantage to nigerians because of monopoly.. monopolizing the sector..in which monopoly is bad..so competition is needed in the petroleum refinery oil sector in Nigeria

Myths, myths, myths, myths, myths. myths, myths, myths

So. A refinery will buy crude oil at N705 and now sell petrol at 600? You guys will never listen!

Are you going to educate Okonjo Iweala or Lamido Sanusi.?

Most of you don't even realise that the toughest competition local refineries face isn't domestic but foreign. Dangote is presently whining about cheap Russian diesel flooding the market. Russian diesel is very cheap as sanctions prevent it from selling crude oil above $60 per barrel.

Many were saying once Fangote refinery starts production, it will crash the price stupendously low, that hasn't happened.

Now, it's once there's brutal competition amongst local refineries, it would force the price down.

Later, it would be that if we open the market to foreign competition, it would perform the magic.

When that fails, you might invite Martians to export to us.





Please show me an informed source that said petrol price will fall so low that the final pump market price will be less than N600?

ufotunang:
.. when there is competition in the petroleum refinery oil sector where we have other modular refineries in Nigeria producing and refining fuel and other petroleum products... fuel disel and other petroleum products will be in abundant and competition among the refineries will reduce and bring down the price of fuel disel and other petroleum products and make it cheap and affordable for nigerians to buy...but with only Dangote operating the petroleum refinery sector he will monopolize and control the petroleum reserve sector and dictate the price of fuel disel and other petroleum sector and do anything he feels like doing to the disadvantage to nigerians because of monopoly.. monopolizing the sector..in which monopoly is bad..so competition is needed in the petroleum refinery oil sector in Nigeria

Please point to an informed source that supports your assertions-an economist or an oil industry expert.

The only reason why you hold fast to these beliefs is down to the fact you want super cheap petrol. That is all.

I had informed my cousin that unless the people pay an amount that is price reflective for electricity. Nigerians should forget 24 hour power supply. He hated the increase in price for Band A consumers. He felt I was insensitive.

Yesterday, he told me that he met with someone from Sahara energy. He now acknowledged that to supply power is not cheap. He got informed from an industry expert.

If Petrol could be sold lower than 600 per litre and make a profit, why isn't Dangote supplying petroleum marketers? When Tinubu first removed the subsidy, private operator imported petrol and made money.

Upon the devaluation of the Naira, combined with an increase in the international price of crude oil, it became unprotitable to import petrol.

Again, please point to an informed source that supports your assertions-such as an economist or an oil industry expert.

grandstar:


Please point to an informed source that supports your assertions-an economist or an oil industry expert.

Upon the devaluation of the Naira, combined with an increase in the international price of crude oil, it became unprofitable to import petrol.

Again, please point to an informed source that supports your assertions-such as an economist or an oil industry expert.

The IGNORANCE or lack of economic knowledge among Nigerians is a serious problem. Worse still, they're so arrogant about their cluelessness.

If anyone cared enough to take time and make comments on a public forum, the least they can do is read up a little bit on the subject at hand before spewing trash.

It's a pleasure reading you.

Thanks.

Good Luck to Nigeria.

Badb0y4lyf:


You this guy I remember last two year when you was rigorously canvassing for removal of subsidies I pointed out this same issue facing us at the moment and I opined that subsidy cannot be totally removed that it’s impossible now the NNPC is paying 3 times more than before and yet things as astronomically increased over time. Tell me what has been the Gain of subsidy removal. ?? If you can give me 3 good point then I would be sold on your subsidy removal campaign.

The government hasn't removed subsidy.