Ashawoman82:
are u OK?, what's the international price for PMS? Dude if u have nothing reasonable to say, shut up... Nigeria is an oil producing nation as such fuel should be very cheap now that it is locally produced, can u compare the cost of refining it outside the country then importing it back? .. We are talking cost of fuel as relative to average income earner of the country and u open ur dirty mouth to say he should sell in international standard..

ednut1:

One example:
Imported ( smuggled)Frozen chicken vs live chicken. Cost of feeds have gone up, cost of borrowing is high, cost of fuel/ transport high.

Dangote got some of his crude from USA which was bought with FX, the machine/ spares for the refinery are bought with dollars, he is supplying his own energy vs those abroad that get from national grid. E no go cheap biko

trutharena:
All we are asking for is moderation.

ecolime:

If crude is supplied to him in Naira that means:

1. Sourcing for FCY and exchange rate pressure is off his neck.
2. International shipping fee is off.
3. Customs fees, etc. is off.

Why can't he then sell below international price?

The world will soon see Dangote for who he truly is.If he buys crude at international price, he will sell refined products at international price. It’s called business not charity.

chidiokay:




I dont really know what you are all about, But the refinery business is a very viable business in a country where every household depend on Petrol as a reliable and alternative source of energy

what most lenders/ bank are weary of is the forces that be, conspiracy ploy and insincerity that chokes the oil sector its almost difficult for just anyone to breath around there, we saw what they did to dangote but Dangote survived cos he is a shark himself

profitability or vialiability is not why banks are weary of investing in refinery, the force against refinery is what they are avoiding
these imaginery forces are even major stakeholders in most of the tops bank/lender , if you understand how banks pull funds

AmeboFeeds:

https://platformtimes.com.ng/95463-2/

nairalanda1:


If you were refining fuel at N1000 per liter or more, and then you had to sell that fuel at say N500, or even N200 to the independent and major marketers, so that they could sell at a profit, and government is struggling to pay subsidy money to you or won't pay it...but is paying NNPC subsidy money for the fuel it sells to marketers, you would lose money.




The reason why the refinery business is not viable in NIgeria is because subsidy means that any refinery operating , in theory, operates at a loss

For now, let's see how government allows Dangote and other refinery owners to operate. If they are forced to sell fuel at a loss, or they sell fuel to NNPC, and NNPC then sells fuel at a loss and struggles to meet its payment to Dangote because...they don't have enough money....the same problems would persist.

TLDR: Refineries have to sell fuel at a profit to work well...meaning prices could be as high as N1300-1500 or more per liter.





NO, most lenders were not lending money for refineries...because they knew they won't see their money back.

I mean, until 2013, every product from a refinery was being subsidised...and after, petrol, a major product was being subsidsied. That means that any refinery operating in Nigeria on a private basis would operate at a loss...because subsidy means that government would force them to sell at a loss.

Dangote is a shark, but the reason why he got loans from banks was because if he defaults...the banks simply swoop on his other lucrative businesses and pay themselves. (or AMCON would help them do that). Not everyone has Dangote money and dangote ability to front that kind of colalteral (except people like BUA who is builing his own refinery).





NO, no bank would invest in a business where the business owner cannot set his price...government is doing it for him, and government is forcing him to sell at a loss. That means that worst case scenairo....the bank won't see its money again

I mean, again, a liter of fuel costs above N1000 to refine. That means that it has to be sold above that N1000 per liter. Otherwise, the refinery would lose money, and as we know, government struggles to pay subsidy (infact, NNPC is essentially now raiding investors money to pay for subsidy. Yes, the investor in this case is government, but even then, it shows how bad things are ).

And with that in mind, banks won';t lend money for refinery...unless, as I said, thy name is dangote, and thy collateral is your lucrative other businesses and properties.

Meanwhile, banks are willing to lend to GSM companies, because GSM companies can set their prices. Government is not forcing them to charge one kobo for one hour calls...in the name of helping the poor breath.

chidiokay:


The projection you have in play is unrealistic and non existence, infact it makes me question your understanding around business environment

nairalanda1:


Nope, you don't get what a subsidy is. If local production started, people will agitiate that fuel prices should be further reduced.

That's the issue.

chidiokay:



In real sense, should local production kick start the price will definitely be lesser to imported one,

People wil alway bargain or call for cheaper "Prices" to market price ... what is important is that Nigerians a not short changed

the real issue is NNPc/ cabals wont allow transparency around the oil sector, why else would they want to be sole distributor of dangote inferior fuel
why would Dangote entrust FEC to determine Price for his product , if not that something as gone wrong behind

nairalanda1:


Well, it does not matter, Dangote has sacrified his refinery. FEC will set the usual subsidised price.

At the end, ...ah well, good afternoon.