Collynzo9:

You are just complicating matters for yourself unnecessarily, the issue is a very simple one. What is the cost of a barrel of crude oil in the market? At $65 per barrel, it means that you are paying about 50 cents for one litre of unrefined crude oil.
That is almost N100 even without the cost of refining and transporting it considered, you can do the rest of the math yourself.
Yes Venezuel and Quata subsidizes the petrol the sell to their citizens even though they refine it themselves. The wouldn't get it cheap if the allow market forces and cost of refining come into play.

stagger:


So the governor is too daft to know that when you are not refining a product, and you keep importing astronomical amounts of the refined products with a weakened currency in a market that is not deregulated, the product's price will never come down?

Daft people we have in government houses all the way. Importation of petroleum products is the number one contributor of the excessive dollar demand we have as a country. But with the Mike Otedolas of Nigeria funding the PDP, how can we move ahead?

franciskaine:
my sincere question, how many years does it take to build a refinery and why is our govt unable to build one for about 5yrs or more?

olillywales:
www.metronaija.com/governor-fashola-urges-federal-government-to-cut-petrol-pump-price/

http://leadership.ng/business/393416/falling-oil-prices-fashola-asks-fg-cut-pump-price

Obiagelli:

Well said, the fall of the naira have cancelled our gains but we might have to do more calculations,

how many litres do they get from a barrel of crude.

Is 30 nairs increase on the dollar enough to cancel out $40 saving on falling crude? I don't think so.

thegoodjoehunt3:
A functioning refinery should be the criteria to judge the government of Nigeria. Every government that failed to set up refineries in this country is a FAILURE.

VolvoS60:



^^^
Of course I'm going to complicate matters for myself, necessarily or unnecessarily. After all, I'm Nigerian. Its our way. Even you too.

You obviously haven't read my previous posts on this thread. The simplicity you seek is in those posts is there for you and all to see. But I'll repeat my key points just this once.

Nigeria has no business importing refined fuel. No business at all.

Nigerians want to know how much it costs to drill and refine a litre of PMS/DPK/AGO locally here in Nigeria. This price should then be compared to the (all-in) cost of importing a litre of refined PMS/DPK or AGO. Provide this information and we will kickoff the debate.

Your essay on Venezuela and Qatar omitted one crucial bit of information: Are the Venezuelans and the Qataris subsidizing imported fuel or they are subsidizing fuel drilled and refined locally in their own countries? This sir, is the crux of the matter.

P.S. Only hard facts and numbers will settle this matter. Not conjecture or wishful thinking.

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.

chiefinalowo:
Tanzania has just cut petrol pump price.
I don't think Tanzania has a drop of oil and gas.
There is need for President GEJ to do the needful.

BlackTechnology:


.parasitism can be caused by mental laziness


You think they are pretending but the fact is Yoruba nation is filled with lazy people that is why agberoism is very high in SW

nonen:
Yea. Fashola has the local logic correct. However there's an expected increase in fuel pump price due to the dollar-naira exchange rate disparity. Since the naira is losing weight against the dollars, the importers will have to pay more to import the product. Fashola logic would have worked only if we refine the crude here.

Etinosajay:


Dude, where was dis subsidy when obj was increasing fuel pump price? Or did they start subsidising the damn thing during GEJ's tenure?

2n2k:

How did you arrive at N300 per litre? At the peak of crude oil price, the total shortfall was computed to be about N64 per litre based on the cost to pump of a little below N129 when the pump price was N65. The FG shared the shortfall with the consumer in half and that was how the pump price moved to N97 from N65 while FG subsidized N32 per litre.
Now price of crude is down by 40% when compared to that time even when you factor in the devaluation in naira exchange rate, the current cost to pump is no longer up to N129 per litre. You may contact the PPPRA for cost template.
All the prices of petroleum products in nigeria are based on international market prices and that is why the issue of subsidy for PMS and HHK arose in the first instance while AGO and aviation fuel are fully unsubsidized.
The issue of qatar and others subsidizing crude oil is irrelevant to the discussion. Subsidy is subsidy whether on input or on output. Nigeria used to subsidize crude to the local refineries too when they were functional before Obj govt stopped it and introduce international price for crude while introducing subsidy on final imported fuel products.

majekdom2:
I like your view on why nothing works under the govt, but what I want to ask is why are there still delays in making all other govt owned industries work in this " lazy way out " . for crying out loud is this not just pure greed and selfishness.

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.

barcanista:
What iis the %Change in the Price of the Dollar and what is the %Change in the price of crude oil? My friend this is a very simple economics.

At price $100 per barrel, government spends 1trillion on subsidy bills. Naira/Dollar was N165.

At price $70 per barrel, government cannot justify spending the same 1 trillion on subsidy bills, despite the devalue of the naira to 178 per dollar. The %Change can never justify it.

We have 30% reduction in the price of the crude oil, with a 8% increament in the price of the dollar. The disparity is just glaring. The price of petrol must go down or the appropriation on subsidy must go down should the price of petrol remain constant.

chiefinalowo:
Tanzania has just cut petrol pump price.
I don't think Tanzania has a drop of oil and gas.
There is need for President GEJ to do the needful.

sureguy02:
Why is there subsidy in the budget in the first place?

If the price of crude goes up, the govt can save some money from the excess revenue and use it to subsidise the price of petroleum products

If the price of crude goes down, logically, the govt won't have to pay subsidy because the price of crude is "down" already and this means the price of PMS will also go down. There won't be anything to subsidise!

So there's no reason to budget for subsidy in the first place!!!

The govt is insincere. Why didn't the price of diesel fall as a result of the fall in the price of crude since it has been deregulated? I can logically conclude that the price of pms will still not fall even if the oil sector bcoms fully deregulated!!!

One of the excuses the govt gave in 2012 for removing the subsidy was that they would use the proceeds to upgrade the existing refineries and to build new ones. They didn't fulfil this promise, so why should we trust them to remove the full subsidy?

Nigerians...Be wise....we are the ones subsidising the govt right now

adconline:

Lie!! Prices dropped in the US to its lowest in 5 years...

DesChyko:


You cannot have your cake and eat it.

revolt:
wow this is really rocket science for most of you. So the UK refinery thts used to sElling. At a particular cost price will suddenly reduce their price to the nigerian importers? Oga eeryfin u spewed will only work if pmc is refined here. Now the question is how do we refine here? Answer tht and ur confusion ends.

sureguy02:

Do all countries refine crude oil? How come the price of pms has fallen even in countries that do not refine crude?
Subsidy is not an excuse not to reduce the pump price since it has been budgeted for already!!!
Forget about the exchange rate. You can't compare the rate at which the naira is depreciating to the rate at which the oil price fell!!! It is obvious that the FG has colluded with the oil marketers to scam us.

Wise up.

BlackTechnology:




Are you sure there is no drop in diesel price.? If yes


Then the greed of oil marketers is at work.


The best solution is to build more medium scale refineries or convince some oil marketers to sell cheaper in order to seize the market which will force others to cut down price.

BlackTechnology:



I must agree with you that it is either FG is ignorant of this discrepancy or they have a hand in it

I won't defend Jona on this one if he fails to explain why it is so.

VolvoS60:



^^^
Of course I'm going to complicate matters for myself, necessarily or unnecessarily. After all, I'm Nigerian. Its our way. Even you too.

You obviously haven't read my previous posts on this thread. The simplicity you seek is in those posts is there for you and all to see. But I'll repeat my key points just this once.

Nigeria has no business importing refined fuel. No business at all.

Nigerians want to know how much it costs to drill and refine a litre of PMS/DPK/AGO locally here in Nigeria. This price should then be compared to the (all-in) cost of importing a litre of refined PMS/DPK or AGO. Provide this information and we will kickoff the debate.

Your essay on Venezuela and Qatar omitted one crucial bit of information: Are the Venezuelans and the Qataris subsidizing imported fuel or they are subsidizing fuel drilled and refined locally in their own countries? This sir, is the crux of the matter.

P.S. Only hard facts and numbers will settle this matter. Not conjecture or wishful thinking.

podosci:

There are three things in play, subsidy, exchange rate and crude price.
we are in a paradox, the price of crude went down, our exchange rate went up, the amount paid to subsidies fuel came down. Puting this three factors together......i just want to know, if the pump price of petrol would go up, come down or mantain status quoe

sureguy02:
Why is there subsidy in the budget in the first place?

If the price of crude goes up, the govt can save some money from the excess revenue and use it to subsidise the increase that will occur price of petroleum products
as a result of the increase in the price of crude oil.

If the price of crude goes down, logically, the govt won't have to pay subsidy because the price of crude is "down" already and this means the price of PMS will also go down since the cost of the major input has fallen. There won't be anything to subsidise!

So there's no reason to budget for subsidy in the first place!!!

The govt is insincere. Why didn't the price of diesel fall as a result of the fall in the price of crude since it has been deregulated? I can logically conclude that the price of pms will still not fall even if the oil sector bcoms fully deregulated!!!

One of the excuses the govt gave in 2012 for removing the subsidy was that they would use the proceeds to upgrade the existing refineries and to build new ones. They didn't fulfil this promise, so why should we trust them to remove the full subsidy?

Nigerians...Be wise....we are the ones subsidising the govt right now

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.

Bayswater:
That's Fashola playing to the gallery again saying rubbish under the pretence of not being an economist. He has economic advisers, he could have sought their advise before displaying his hypocrisy. That a barrel of oil is now $65 does not mean the cost of producing it or bringing it to the pump will change. Pump price has not been reduced in the UK, usa and across Europe. His attempt at using a bushmeat seller's logic has failed woefully.

Even if we refine the crude oil here, the cost if producing a barrel of oil would still be more than $65 per barrel. Even the average cost of producing the shale which people consider cheaper, is above $70 per barrel. As long as we don't refine crude here, it would take months for us to see reduction in pump prices.

Our greedy oil marketers too will not allow us feel the positive impact even when they start getting oil at reduced prices, they would want to maximise their profit.