Let me explain...

The refinery cost about $15bn to construct and most of that funding came from international institutional investors.

What ever Dangote refinery will generate must go back to repaying his investors and lenders. So more capital flight.

Dangote was thinking more of exporting refined products to neighbouring African countries and expected the FG to grant him subsidised crude at the detriment of national FX inflows.

You will recall that at one time Dangote cement was selling cheaper in other African countries. This was because Dangote is more interested in FX than the naira.

The same scenario is what he hopes to achieve with his 600k bpd refinery . That is, priotising exports to meet his investors and lenders.

Don't even think for one second that Dangote refinery will crash the price of refined products. Rather , if it comes up stream, Dangote will priotize exports to local markets just as he did with his cement . Because Dangote needs to pay back his investors and lenders.

After several ECONOMIC experts have been preaching all these years about how dangote refinery will transform NIG

Whether investor borrowed him money or he used his personal cash, a huge business like Dangote refinery is not expected to break even in one year..

so the idea of you making it look Dangote refinery product will be very expensive in order to pay back investor is just fallacy....

A new business cannot go beyond reasonable pricing just becos it wants to recover initial investment cost..there will always be a period of running at negative profit...

babasolution:
After several ECONOMIC experts have been preaching all these years about how dangote refinery will transform NIG

As long as Dangote has obligations to his international investors and lenders, it's a net negative.


Capital flight and a scenario where Nigerians will pay higher than neighbouring African countries will persist just as was the case with Dangote cement. Nigerians were subsidizing Dangote cement inroads into neighbouring African countries.

Dangote flooded the west African market with cheaper cement while the Nigerian consumer paid the subsidy on it. This was because Dangote needed FX to complete his refinery and pay his institutional investors and lenders.

The only solution would have been modular refineries and the total unbundling of the NNPC .

advanceDNA:
Whether investor borrowed him money or he used his personal cash, a huge business like Dangote refinery is not expected to break even in one year..

so the idea of you making it look Dangote refinery product will be very expensive in order to pay back investor is just fallacy....

A new business cannot go beyond reasonable pricing just becos it wants to recover initial investment cost..there will always be a period of running at negative profit...

I provided the scenario of Dangote cement pricing in Nigeria being far higher than what it was retailing in other African countries and said this was due to Dangote's hunger for FX and market share in other countries which he was able to achieve through passing the cost of subsidizing his cement on the Nigerian market.

The same scenario will play out with his refinery . So expect refined Dangote products to be cheaper outside Nigeria .

MossadAgent:


As long as Dangote has obligations to his international investors and lenders, it's a net negative.


Capital flight and a scenario where Nigerians will pay higher than neighbouring African countries will persist just as was the case with Dangote cement. Nigerians were subsidizing Dangote cement inroads into neighbouring African countries.

Dangote flooded the west African market with cheaper cement while the Nigerian consumer paid the subsidy on it. This was because Dangote needed FX to complete his refinery and pay his institutional investors and lenders.

The only solution would have been modular refineries and the total unbundling of the NNPC .

But in the case of dangote cement, don't you think, Nigeria paying the opportunity cost for a Nigerian company to dominate Africa is worth it?

Nigeria to pay higher but it's tentacles dominate Africa,it might pay of longterm

babasolution:


But in the case of dangote cement, don't you think, Nigeria paying the opportunity cost for a Nigerian company to dominate Africa is worth it?

Nigeria to pay higher but it's tentacles dominate Africa,it might pay of longterm

It is of no value.

We can use it as soft diplomacy to assert ourselves in the subregion but what is in it for us if those shithole countries bow to us?.

Laslas , Dangote will be demanding more FX to pay his investors through the CBN.

If you think Dangote will domicile his subregional market in Nigeria then you don't know Dangote.

He will have marketing firms set up in all his markets so that he can collect his FX from there.

And so what?

The Refinery shouldn't work?

SadiqBabaSani:
And so what?

The Refinery shouldn't work?

When it comes upstream and you find out that petrol and diesel is much cheaper in neighbouring countries don't begin to lament.

MossadAgent:
I provided the scenario of Dangote cement pricing in Nigeria being far higher than what it was retailing in other African countries and said this was due to Dangote's hunger for FX and market share in other countries which he was able to achieve through passing the cost of subsidizing his cement on the Nigerian market.

The same scenario will play out with his refinery . So expect refined Dangote products to be cheaper outside Nigeria .

Wateva the price is ....as long it's reasonable why are u bothered about how much petrol costs in another country.....is their economy the same with yours??

advanceDNA:


Wateva the price is ....as long it's reasonable why are u bothered about how much petrol costs in another country.....is their economy the same with yours??

I am bothered because it will see to FX flight and a reduction in FX earnings from crude sales .

The only winner here is Dangote and his Jewish investors.

Not you.

Tinubu supporters will praise you for 8 years while you’re destroying the economy, only to start trashing you once their man gets into power

Tueh!

MossadAgent:


I am bothered because it will see to FX flight and a reduction in FX earnings from crude sales .

The only winner here is Dangote and his Jewish investors.

Not you.

Baba...u are worried about what u have no control over.... Some power players are involved in all this issue to fill their pockets

... The only thing we the masses can get out of reasonable pricing so we can breathe abit

Weda we our fx earning from crude oil is high or low...our leaders are still criminals that won't let us enjoy our common wealth....

That's why I never supported removal of the two major subsidy ( fuel & our currency)... because the money removed will only be embezzled

MossadAgent:
Let me explain...

The refinery cost about $15bn to construct and most of that funding came from international institutional investors.

What ever Dangote refinery will generate must go back to repaying his investors and lenders. So more capital flight.

Dangote was thinking more of exporting refined products to neighbouring African countries and expected the FG to grant him subsidised crude at the detriment of national FX inflows.

You will recall that at one time Dangote cement was selling cheaper in other African countries. This was because Dangote is more interested in FX than the naira.

The same scenario is what he hopes to achieve with his 600k bpd refinery . That is, priotising exports to meet his investors and lenders.

Don't even think for one second that Dangote refinery will crash the price of refined products. Rather , if it comes up stream, Dangote will priotize exports to local markets just as he did with his cement . Because Dangote needs to pay back his investors and lenders.

Exactly......we were arguing this Dangote Refinery Issue this morning. Dangote will and can never sell below global market price. He purposely imported crude oil so that he can have an excuse to sell at global market price. Dangote will seat in his office and dictate market price to over 200 million people, he wants to hold Nigeria by its balls

MossadAgent:


As long as Dangote has obligations to his international investors and lenders, it's a net negative.


Capital flight and a scenario where Nigerians will pay higher than neighbouring African countries will persist just as was the case with Dangote cement. Nigerians were subsidizing Dangote cement inroads into neighbouring African countries.

Dangote flooded the west African market with cheaper cement while the Nigerian consumer paid the subsidy on it. This was because Dangote needed FX to complete his refinery and pay his institutional investors and lenders.

The only solution would have been modular refineries and the total unbundling of the NNPC .

God bless you. This what I kept hammering this morning to my co-debators. The only solution is to make sure our refineries are working and declare state of Emergency in the oil industry and by extension the NNPC

babasolution:


But in the case of dangote cement, don't you think, Nigeria paying the opportunity cost for a Nigerian company to dominate Africa is worth it?

Nigeria to pay higher but it's tentacles dominate Africa,it might pay of longterm

How?
The raw materials and expertise is from Nigeria. Is it not meant to be cheap?
How can it be more expensive?

advanceDNA:


Wateva the price is ....as long it's reasonable why are u bothered about how much petrol costs in another country.....is their economy the same with yours??

Dangote can't sell fuel below Global market price/liter. And if USA is buying fuel at 4 dollars/liter. Therefore Dangote can't sell fuel below 5,000 naira/liter. The other option is to pay subsidies to him. That's over 700 billion naira every month(If he would decide to sell fuel to the Nigerian Market).

Omowale2023:

God bless you. This what I kept hammering this morning to my co-debators. The only solution is to make sure our refineries are working and declare state of Emergency in the oil industry and by extension the NNPC

I am by all definitions and colorations a libertarian and see govt as natural tyranny .

Note that libertarians are not anarchists like our inbred IPOB and Obidient louts.

I believe there must be a responsible central authority but one whose responsibilities and overreach do not in any way impede on the individual liberties of the citizens that it claims to govern.

That aside, Nigeria has been running a mixed economy since the end of the civil war under the military heriachial dictatorship.

Nationalization of resources and state corporatism is by far the worst road to follow.


My vision for Nigeria is with a govt that is more committed in law and order than being rent seekers like the colonial system that was inherited and consecrated by subsequent military fiat dictatorships.

What we need is a free market economy with strong regulation and anti monopolist laws.

Dangote is a direct beneficiary of this flawed rent seeking and protectionist system. Space and time won't allow me to detail how Dangote abused the current system to be who he is today at the expense of other genuine businessmen .

What I will suggest is a total unbundling of all and every govt owned corporations. The likes of NNPC and FAAN have been a net negative to the Nigerian economy .

The reason NNPC still exists is because the politicians see it as a cash cow. Same goes for FAAN and every other govt owned cooperation.

The best solution to meet local refined products was modular refineries and not the behemoth 600k bpd Dangote refinery that was floated and subsidised by govt.

You should ask yourself why Dangote sited his refinery in Lagos and not the Niger Delta. The man has more ambitions selling refined products across the west African subregion.

Lagos state should ensure they collect vat from this refinery and slap environmental tax on it.

Omowale2023:

Dangote can't sell fuel below Global market price/liter. And if USA is buying fuel at 4 dollars/liter. Therefore Dangote can't sell fuel below 5,000 naira/liter. The other option is to pay subsidies to him. That's over 700 billion naira every month(If he would decide to sell fuel to the Nigerian Market).

Baba.....Those importing fuel said landing cost is 1200naira...right??
.why will local production put price at 5000naira just because fuel sells in the US for $4

advanceDNA:



Baba.....Those importing fuel said landing cost is 1200naira...right??
.why will local production put price at 5000naira just because fuel sells in the US for $4

Why was Dangote cement retailing at a third of what it was going for in Nigeria in other African countries?


Dangote has been abusing federal patronage at the detriment of other competitors in Nigeria
.

MossadAgent:



Why was Dangote cement retailing at a third of what it was going for in Nigeria in other African countries?


Dangote has been abusing federal patronage at the detriment of other competitors in Nigeria

U dey use question answer question....u go like wahala oooo

So how much larfarge cement dey sell to other countries...since the price of other countries buy worries u so much

advanceDNA:


U dey use question answer question....u go like wahala oooo

So how much larfarge cement dey sell to other countries...since the price of other countries buy worries u so much

Lafarge market share is insignificant when compared to Dangote .

Besides, lafarge Nigeria only services the local market unlike Dangote who dumped cheap cement across West Africa by increasing cost in the Nigerian market.

Now that is where you lost the argument and plot.

The other thing I still can't work out is what happens when Port Harcourt refinery starts producing.

What if the government decides at some point to sell petrol at a price cheaper than Dangote. How will that market work or will Dangote demand that the government must not sell cheaper than him.

I wait to see what will happen.

Op has a very credible point. Dangote will need to pay back his foreign lenders for several years, so most of the dollars the refinery makes will go to debt repayment. The dollars won't benefit Nigeria.

What will benefit Nigeria and the naira is the sale of crude to Dangote in naira and the purchase of petroleum fro Dangote in naira.

But even then, it seems only about 30-35% of our imports is spent on petroleum products. That means we still have to find the dollars for the other 65% of our imports.

So, Dangote's refinery is a positive, but it is not going to be the game changer that propagandists claim it will be.

People also forget that as Dangote's refinery is located in a free trade zone, IT WILL PAY ZERO TAX TO THE FEDERAL GOVERNMENT ON IT PROFITS!

The big beneficiary is Lagos State government.

No wonder the federal government self fit they vex for the whole thing. Though they will receive a tidy sum in VAT.

MossadAgent:


Lafarge market share us insignificant when compared to Dangote .

Besides, lafarge Nigeria only services the local market unlike Dangote who dumped cheap cement across West Africa by increasing cost in the Nigerian market.

Now that is where you lost the argument and plot.

Lol....u don't every answer question straight forward....

So what do u want...u want to kill Dangote refinery...??

I asked u earlier....importers land fuel at 1200,
What will make Dangote crazy enough to sell fuel at 5000naira....?

MossadAgent:

Dangote was thinking more of exporting refined products to neighbouring African countries and expected the FG to grant him subsidised crude at the detriment of national FX inflows.

Trash. How was he expecting subsidized crude?

DeLaRue:
The other thing I still can't work out is what happens when Port Harcourt refinery starts producing.

Can you imagine ?

Federal govt is suffering from economic mad cow disease.


Instead of concentrating on the lush green pasture,our federal cow is more interested in nibbling on its tail.

NNPC must be unbundled and liquidated.

The only reason it still exists is because of lazy state governors waiting for federal allocation at the end of the month.

Cooperatism is lite communism.

RepoMan007:

Trash. How was he expecting subsidized crude?

Damgote's major lamentation is that NNPC isn't giving him free crude

advanceDNA:

Lol....u don't every answer question straight forward....

So what do u want...u want to kill Dangote refinery...??

I asked u earlier....importers land fuel at 1200,
What will make Dangote crazy enough to sell fuel at 5000naira....?

Dangote refinery is a future "too big to fail" enterprise that will definitely see to future bailouts by the FG.

There was no reason for it other than Dangote hoping on being granted certain privelages and concessions.

MossadAgent:


Damgote's major lamentation is that NNPC isn't giving him free crude

back that claim up with links.

Demonic mindset has ravaged you.

RepoMan007:
back that claim up with links.

Demonic mindset has ravaged you.

0koro,be civil once in your life

MossadAgent:


Dangote refinery is a future "too big to fail" enterprise .

There was no reason for it other than Dangote hoping on being granted certain privelages and concessions.

U keep emphasizing on concession....so what? It's a Nigerian business... what's wrong with the country giving in free land, a a period of tax holiday, and supply of crude oil to to give the federal government power to control pricing to a reasonable figure for all Nigerians to enjoy...... U sound like a regular politician baba....

advanceDNA:


U keep emphasizing on concession....so what? It's a Nigerian business... what's wrong with the country giving in free land, a a period of tax holiday, and supply of crude oil to to give the federal government power to control pricing to a reasonable figure for all Nigerians to enjoy...... U sound like a regular politician baba....

That's where you lost out because this concession will come at both capital flight to Dangote's refinery investors and also a significant reduction in FX earnings from alloted crude earnings