Simplyleo:

Forget it.

It doesn't make any sense for Nigerians to be buying fuel at a pump price from Dangote competitive with international prices. What then is the benefit of Nigerians by reduced forex for him for the importation of the refinery equipment?

Besides, Nigeria is an oil producing country, meaning crude oil is nearby, he doesn't have to transport it from another country. Additionally, the refined products doesn't need transportation to Nigeria.

State capture, reminds me of what happened in South Africa with the Gupta's.

Nigerians were sold the lie that providing him forex at a reduced rate will benefit the nation in reduction in the fuel price.

Cjrane2:
Of course they will defend him to exploit Nigerians to pay the highest cost of fuel, the way we now pay the most expensive cost for cement in the world!

Na dem dem!

of course he will buy crude from shell who will sell it to him in dollars. He is a private biz man

Simplyleo:

Forget it.

It doesn't make any sense for Nigerians to be buying fuel at a pump price from Dangote competitive with international prices. What then is the benefit of Nigerians by reduced forex for him for the importation of the refinery equipment?

Besides, Nigeria is an oil producing country, meaning crude oil is nearby, he doesn't have to transport it from another country. Additionally, the refined products doesn't need transportation to Nigeria.

The benefits are as follows:

1. Reduced requirements for forex to import crude.
2. Direct Jobs for those who work there
3. Technology transfer
4. Better exchange rate stability (which affects many other things)
5. frees up government money for other things
6. Eventually they will pay taxes to FG, improving their revenue. FG can't tax profits made by a refinery in Houston
7. Indirect ancillary jobs from businesses supporting the refinery
8. Benefit and wealth spread to land owners in that axis. Land that would otherwise have been significantly less valuable.

That is how one big investment can spur economic activity. Which is why governments that know what they are doing provide conducive environment for companies. See how cities in America were literally fighting for Amazon to site a second headquarters in their city.

Simplyleo:

Forget it.

It doesn't make any sense for Nigerians to be buying fuel at a pump price from Dangote competitive with international prices. What then is the benefit of Nigerians by reduced forex for him for the importation of the refinery equipment?

Besides, Nigeria is an oil producing country, meaning crude oil is nearby, he doesn't have to transport it from another country. Additionally, the refined products doesn't need transportation to Nigeria.

You People must complain about everything? the market has been deregulated, if you don’t like Dangote’s price, you are free to go and buy from the importers, that is the beauty of a deregulated market, all the Honorable Minister of Finance did was to inform those that think they will be buying cheap fuel in future is an economic illusion.

Simplyleo:

Nigeria is an oil producing country.

The country can sell the crude to Dangote at a highly reduced price so he in turn sells to Nigerians at reduced price. Forex not involved in this case and nothing like subsidy in addition.

That should be our benefit for oil production. Shebi dem say landing cost, forex bla bla bla are the reason for high prices?

If Nigerians cannot benefit from the refinery by way of reduced pump price, what then is the rationale behind assisting him with forex at subsidised rate for the importation of materials for the refinery?

how can they sell at a reduced price? Is it not another form of subsidy. Do you know how much it costs to drill and store crude

RuudVanNisteroy:


State capture, reminds me of what happened in South Africa with the Gupta's.

Nigerians were sold the lie that providing him forex at a reduced rate will benefit the nation in reduction in the fuel price.

So how do you equate elimination for cost of shipping?

chriskosherbal:
weather we like it or not dangote is a private individual and has the right to sell at what price he wants, so we shouldn't crucify him, we should channel our anger to the govt who over the years have failed woefully in doing the needful.

Do the citizens have any other choice than to buy from him?

favor914:
You People must complain about everything? the market has been deregulated, if you don’t like Dangote’s price, you are free to go and buy from the importers, that is the beauty of a deregulated market, all the Honorable Minister of Finance did was to inform those that think they will be buying cheap fuel in future is an economic illusion.

Why then did the goverment subsidize the cost of a private venture that was going to create a monopoly in the country. Monopoly have been proven time and time again to not be beneficial to a nation when run by private interests in the long-term.

Why are you blaming the man for choosing to sell at international price.majority of you think that business is charity. Over 10 people got license to build refinery what did they do ,they choose to engage in subsidy bonanza will dangote painstakingly decided to build one by seeking loans and joint venture from his business partners. Now you expect him to sell PMS at N85 or N120 because he loves you all abi.

The indices are clear ,if the government sells crude to him at international price, be ready to buy at international price. From the tone of the federal government they are not ready to sell at any price that is not international because it will affect revenue. Finally the man just proved to us why he is a real businessman. He is ready not to partake in the short term for the sake of the long term. I love the man.

For wailers if you think the man succeeds in all his business then you are wrong.
Dangote flour Mill is an example.
Dansa.
Dangote tomatoes.
Dangote rice .
This are list of business he has not done well at so.
Don't give that government is favoring him bullshit.
Mukesh ambani of India operates the same way like him.yet India have changed from congress to Bjp.

favor914:
So how do you equate elimination for cost of shipping?

The Minister has already told Nigerians that fuel price will not go down. And given his monopoly the price will only go up; go and read what Wikileaks had to say about Dangote harm to Nigeria through his monopoly.

rafindo:
Why are you blaming the man for choosing to sell at international price.majority of you think that business is charity. Over 10 people got license to build refinery what did they do ,they choose to engage in subsidy bonanza will dangote painstakingly decided to build one by seeking loans and joint venture from his business partners. Now you expect him to sell PMS at N85 or N120 because he loves you all abi.

The indices are clear ,if the government sells crude to him at international price, be ready to buy at international price. From the tone of the federal government they are not ready to sell at any price that is not international because it will affect revenue. Finally the man just proved to us why he is a real businessman. He is ready not to partake in the short term for the sake of the long term. I love the man.

For wailers if you think the man succeeds in all his business then you are wrong.
Dangote flour Mill is an example.
Dansa.
Dangote tomatoes.
Dangote rice .
This are list of business he has not done well at so.
Don't give that government is favoring him bullshit.
Mukesh ambani of India operates the same way like him.yet India have changed from congress to Bjp.

Government has always favoured him by giving him monopoly in key industries and that is why he is the richest man in the country and not through any ingenuity.

Any novice can become a billionaire if given monopoly, look at Kola Aluko given monopoly with the oil lifting contracts.

RuudVanNisteroy:

The Minister has already told Nigerians that fuel price will not go down. And given his monopoly the only way is up, go and read what Wikileaks had to say about Dangote harm to Nigeria through his monopoly.

How does she know, does Nigeria control the price of international crude oil? All she said people like you waiting for cheap fuel, should stop wasting their time, & get on the beat, the days of subsidy is gone for good, Federal Government should come and subsidize my Delta Airline ticket for me also? Like they did during the days of Nigeria Airways. Sleep in Lagos, Wake up in New York City.

jtjohn:
This country self...Dangote trying to monopolize everything.

Dangote is not the only one building a refinery. There are several private modular refineries in Imo, Edo, Delta and Bayelsa at different stages of completion currently.

pafra:
The federal government benefits more.
1 The earn revenue from him
2 their will be less pressure on forex
3 he reduces the unemployment rate
4 it also affects our balance of payment.

For the masses

Even if he is selling at international price it would be cheaper than importation because there will be no shipping and other logistics costs.
In all, its still better than importation

What most Nigerians fail to understand is the fact that there is change in technology. Few years from now, the demand for petrol cars will reduce

jtjohn:
This country self...Dangote trying to monopolize everything.

It's not Dangote's fault that Nigerian businessman know nothing about large scale technical businesses that require a lot of attention to detail and would rather not take the risk.

All we know how to do is trading and rent seeking businesses, where we stand as a middle man. i,e buying and selling, building house and renting it out, collecting contract and selling it etc - no real value add. And to be honest it's not anyone's fault. It's a symptom of poor education system, lack of government support, lack of faith in Nigerian bureaucracy, poor infrastructure, corruption etc

edoairways:

What most Nigerians fail to understand is the fact that there is change in technology. Few years from now, the demand for petrol cars will reduce

At least if that occurs it becomes Dangote's problem and not the FG's.

Besides that analysis is faulty. Asides petrol, he will produce aviation fuel, petrochemicals for pharmaceutical and plastic industries as well as fertilizer. All of which there is good demand from West, Central and Southern Africa. And petrol still has a long way to go in Africa. Even if all cars become electric in Europe in 2030, Africa will still be using the junk petrol cars for a while longer. Dangote would have broken even before then.

RuudVanNisteroy:


Minor reduction in forex, the government will still buy from him at the international price in US dollars. The only cost savings is the shipping cost.

No.
Government does not eat fuel.
The populace use it.

People don't buy spaghetti or cement with dollars.
Large marketers(not the government) will buy from Dangote and pay him in Naira.
Then they will distribute to retailers and collect Naira too.

We will be saving close to the amount of forex that we use
Dangote and other developing refineries will save Nigeria the equivalent
amount of dollars we would have used to import their production capacity.

jesmond3945:
of course he will buy crude from shell who will sell it to him in dollars. He is a private biz man

Nnpc are entitled to 440,000 barrels which is refined for local consumption. If dangote buyes direct from shell what then happens to 440k barrels. The fg should allocate the 440k to me to refine and sell at reduced cost. Anything short of that nigerians will buy fuel at 330 to 380 a litre

Xisnin:

No.
Government does not eat fuel.
The populace use it.

People don't buy spaghetti or cement with dollars.
Large marketers(not the government) will buy from Dangote and pay him in Naira.
Then they will distribute to retailers and collect Naira too.

We will be saving close to the amount of forex that we use
Dangote and other developing refineries will save Nigeria the equivalent
amount of dollars we would have used to import their production capacity.

Don't count on that. If dangote buys crude oil from multinational he must pay them in dollars. Expatriates must be paid in dollars and considering the number of them he engaged in building the refinery be rest assured expatriates will make up a large proportion of workers. Spare parts will be paid for in dollars. Lastly to ward off effects of unstable naira, dangote will hedge most of his income definitely in dollars

COMPAQ:
Did anyone really expect him to do so?

If he sells it lower than 'international price', he bears an opportunity cost and doesn't maximise profit like a business man normally would

If FG sells crude to him below 'international price' , then FG also bears an opportunity cost and is in effect subsidizing and does not maximize potential revenues.

A CASE FOR WHY FG SHOULD NOT MAXIMIZE ITS REVENUES AND NOT SUBSIDIZE:

The world is currently witnessing a peak in the demand for crude oil. Medium to long term forecasts sees demand for crude declining consistently from 2023 or so (depending on the model). In fact, due to COVID-19, one could argue that it has started already.

And where is this decline supposed to come from? Wind and Solar are the fastest growing electricity sources in the world today. This means that many developed countries are replacing gas and heavy oil fired turbines with Solar and Wind. Electricity utilizes about 8% of crude oil.

The real big deal is petrol. Many European and Asian countries are planning significant restrictions or outright bans of internal combustion engine (ICE) cars from 2030 - 2040.

https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles

Road transportation utilizes 50% of crude oil. Imagine what happens in 2035 when this happens. A good chunk of crude demand is going to evaporate. . The real shock to the system will happen when America announces it's own ban on new ICE cars. America is the driving capital of the world. From passenger cars to trucks and SUV's to heavy articulated trailers.

All this means that crude has a potential to become as cheap as $20 -$30 in the medium term. In fact, in many cases it will make no sense to continue production in the most expensive areas, hence you hear a lot of talk by NNPC of reducing operating cost. Unfortunately, we make operating cost high in Nigeria by our own actions (NDDC that collects 3%, Security, Corruption etc)

This means that Nigeria is looking down the barrel of reduced earnings from crude by 2030, so it makes NO SENSE to fritter away what we make now in the name of subsidies.

Nigeria needs ALL the money it can make now to diversify it's economy. The removal of subsidy in the electricity sector is also in line with this. If we do not make our electricity sector bankable before 2030- 2035 and almost all new cars are electric, where will we get the electricity to power it? And this will be happening at a time when FG revenues would have significantly reduced. It's a situation the FG has to GET OUT OF NOW!!

Even the mighty Saudi has seen this handwriting on the wall and a notoriously stubborn country that believed it had all the money in the world in finally taking steps to diversify its economy and improve productivity. What has Saudi done in the last few years?

1. Allowed its women to drive in order to enable them to be more productive and add to the economy.
2. Reduce it's subsidy on petrol
3. Introduced taxes for citizens, albeit small.
4. Introduced relaxed visa for outsiders for tourism purposes
5. Invested massively in solar power generation facilities

UAE is a country that has done this already. Yes they have oil, but they used their oil wealth over the last 20 years to invest in infrastructure and a well designed and planned country. Now asides oil, they have a vibrant global airline, global shipping sector, global financial services sector, global tourism sector, solar power sector and even educational sector (many universities have a Dubai center) and relaxed residency visa requirements (now with guaranteed income of $5k a month, you can get a retirement residency visa). So when oil reduces significantly in value, they will have a semblance of an economy to power it forward. Nigeria unfortunately has NONE of the above!

This is why Nigeria can no longer put it's head in the sand and basically flush money down the toilet in the name of subsidies. We are a relatively poor country. Oil brings about 60% of revenue and 90% of forex. Our tax base is really low. Even worse for Nigeria, a lot of our economic activity happens at the informal, subsistence level where it's very difficult to track and tax. Brazil a country with about 5 times our GDP has a budget that is like 36 times bigger, because they are able to generate better tax revenues from their more developed and more formalized economy.

we don't have a money problem but a management problem here, we keep on making budget yearly and taking loans without immediate effect in the economy, all Nigerians including myself ask for the basic things be met by the government and we will thrive, we talk of taxes daily yet what have they done with it really? I have lost trust for the government unfortunately bud.

History555:


Don't count on that. If dangote buys crude oil from multinational he must pay them in dollars. Expatriates must be paid in dollars and considering the number of them he engaged in building the refinery be rest assured expatriates will make up a large proportion of workers. Spare parts will be paid for in dollars. Lastly to ward off effects of unstable naira, dangote will hedge most of his income definitely in dollars

It doesn't matter where Dangote buys crude from.
Him employing expatriates is irrelevant too.

Will Dangote need dollars for some of its operations?
Yes. But that is none of our business.

Innoson source all its parts in dollars.
Yet, he sells in Naira.
Same goes for every manufacturer who source their material from abroad.

Indian refineries buy all its crude from other countries in dollars, yet sell to its populace
in rupees(not dollars).
There is nothing special about dollar beyond international exchange.

Dangote didn't invent refineries and he won't be alone by 2023.

If the business is viable, I expect many Nigerians to also venture into
oil refining because we like "safe" business.

History555:


Nnpc are entitled to 440,000 barrels which is refined for local consumption. If dangote buyes direct from shell what then happens to 440k barrels. The fg should allocate the 440k to me to refine and sell at reduced cost. Anything short of that nigerians will buy fuel at 330 to 380 a litre

but you know cost of drilling 440k barrels is in millions of dollars. They have to sell to Dangote and make some profit. Dangote would now refine and sell to make some profit. The issue is that Dangote used our subsidized dollars to build. Probably he deceived the govt.

favor914:
How does she know, does Nigeria control the price of international crude oil? All she said people like you waiting for cheap fuel, should stop wasting their time, & get on the beat, the days of subsidy is gone for good, Federal Government should come and subsidize my Delta Airline ticket for me also? Like they did during the days of Nigeria Airways. Sleep in Lagos, Wake up in New York City.

You're either an economic illiterate or simply blinded to the Dangote cause!

Government doesn't subsidize your Delta ticket, because Delta has many competitors like United, KLM, BA, etc plying the lucrative route.

Government killed off Dangote competitors in cement, sugar, and flour, now the corrupt minister is the one parroting Dangote 's expected pricey products as if she's doing a jingle for Dangote!
How bad, corrupt, and insensitive could that be? Only in Nigeria.

Simplyleo:

Nigeria is an oil producing country.

The country can sell the crude to Dangote at a highly reduced price so he in turn sells to Nigerians at reduced price. Forex not involved in this case and nothing like subsidy in addition.

That should be our benefit for oil production. Shebi dem say landing cost, forex bla bla bla are the reason for high prices?

If Nigerians cannot benefit from the refinery by way of reduced pump price, what then is the rationale behind assisting him with forex at subsidised rate for the importation of materials for the refinery?

Selling crude to Dangote at reduced price is the same thing as govt paying SUBSIDY.

eagleu:


You're either an economic illiterate or simply blinded to the Dangote cause!

Government doesn't subsidize your Delta ticket, because Delta has many competitors like United, KLM, BA, etc plying the lucrative route.

Government killed off Dangote competitors in cement, sugar, and flour, now the corrupt minister is the one parroting Dangote 's expected pricey products as if she's doing a jingle for Dangote!
How bad, corrupt, and insensitive could that be? Only in Nigeria.

Dangote is a major player in those sectors, but he's not the only player. For cement there is Lafarge, Bua and a few others. Dangote has a 65% market share in cement. The other 35% should also invest more. Lafarge was in the market long before Dangote, but they refused to invest. They were happy with their one plant in Ewekoro. When Obajana came with almost triple their capacity and far more efficient plant, they scrambled to build a new plant in Ewekoro. If anything, Dangote forced their investment.

jesmond3945:
but you know cost of drilling 440k barrels is in millions of dollars. They have to sell to Dangote and make some profit. Dangote would now refine and sell to make some profit. The issue is that Dangote used our subsidized dollars to build. Probably he deceived the govt.

Don't mind them. They think the 400k barrels is free. Crude we spent millions to find and bring from the ground should just be given to Dangote free to refine for the sake of cheap petrol?? Oil that has market value of $16mln PER DAY!!!

Then they wonder why we have no roads, good schools and hospitals etc

COMPAQ:


Dangote is a major player in those sectors, but he's not the only player. For cement there is Lafarge, Bua and a few others. Dangote has a 65% market share in cement. The other 35% should also invest more. Lafarge was in the market long before Dangote, but they refused to invest. They were happy with their one plant in Ewekoro. When Obajana came with almost triple their capacity and far more efficient plant, they scrambled to build a new plant in Ewekoro. If anything, Dangote forced their investment.

I bet you have never heard about Ibeto cement?

obailala:
Selling crude to Dangote at reduced price is the same thing as govt paying SUBSIDY.

Most importantly, why is the corrupt Fulani government refusing to give other Nigerians the super sweet deal given to Dangote?

Cjrane2:
Of course they will defend him to exploit Nigerians to pay the highest cost of fuel, the way we now pay the most expensive cost for cement in the world!

Na dem dem!

why are you complaining of cement when we have BUA, Ashak, Ibeto, Sokoto cement etc

eagleu:


I bet you have never heard about Ibeto cement?

They are still existing are they not? At least they have a functional website as of right now, so I assume they are?

The website say they are building a 5mln tonne cement plant in Ebonyi. This is what we need. It will make Dangote less dominant in the East. By the time they finish, Dangote share drops to maybe 55%. Thats how these things work.

No doubt Dangote has connections in govt, but big business people that donate to Trump and Biden, what do you think they donate for? Fine the system still enables better playing field in Yankee, but you think there arent' those complaining about the practices of Apple, Google, Microsoft and co??