The crude oil is sourced from Nigeria, the refinery is located and owned by Nigeria(n's), and the consumers are Nigerian citizens. Even the regulators and government are Nigerian. However, it seems contradictory that the price of the refined product is determined by international market forces. OPEC's focus should be on regulating the oil we export, and Nigeria should sell it's crude to local refineries at domestic prices favourable to it.
The problem is the marketers bringing refined fuel from abroad. If govt should stop them then strike a mutual agreement to sell crude oil in naira to Dangote and buy it back in Naira. But govt will never do that. What we heard before was that market forces will stabilise the price but would the marketers allow, no. So you're at their mercy. And who are they, they are Tinubu et al. So you guys are in a big mess.
The loan collected to build the refinery was sourced from international market, in dollars. Dangote refinery is not a charity business, they must pay back their loans, cover overheads and make profit.
The fact that crude oil is sourced from Nigeria does not mean that the cost of production is zero. A lot of money is spent to extract the crude oil from the ground before it is made available to Dangote. If international market forces should not determine the price of the crude oil, what should then? Crude oil is an international commodity produced for local and international consumption, the price will be in $. The crude oil suppliers in Nigeria has deceived you guys. Yes they will sell the crude oil in Naira, but what they will do behind you is to peg the price of sale in naira to the prevailing exchange rate in USD, just so you know this is the exact same thing with buying the crude oil in USD directly. What exactly is the challenge with buying a product at it's market price? As a businessman will you sell your shoes for 100 naira when somebody else is ready to pay you 400 naira? There is nothing like domestic price in crude oil business. Don't expect petrol prices to fall significantly too.
I have made this argument too. All other countries leverage on their comparative advantage to alleviate the plight of their people. Who don't tell a farmer how to sell his produce even when others are selling at a certain price. Meanwhile, I think NNPC and the government are not sincere to Nigerians. There is no way Nigerians will suffer when we have a functional refinery. Logistics and transportation are huge factors which that has taken off their neck, let them come out clean and be sincere to us.
The cost of petrol in Nigeria is zero because it is a natural resource that God gave to us. The price we should be talking about is the price of refining, telling us of international pricing is nonsense as far as I am concerned. My mother goes to my father's farm to bring food for the family and do not tell the market prices of what we eat in the house.
In the same country call nigeria. Between the year 2000 to 2003 there were almost six cement factory in nigeria and the price of a cement bag was about 550 to 650 until the license was given to one of the marketer because most people in government have their money inside that company. What makes you think the same thing will not take place in the issue of Petro . Remember is nigeria we talking about. A place were anything can happen.
I'm depressed the way some analyst will want blind fold things, does it mean that imported products will not be different from locally produced products. No truth is coming out of these people.
As a local refinery whether he sourced the money from foreign currency or not, must offer something different from imported product. Simple as that. With a reason price, dangote refinery can stop importation by marketer. I know marketers will fight back but how? They can't do anything
The biggest hurdle we face is that the Nigerian government has made us believe that subsidy is a bad thing. What is the cost of petrol in Saudi Arabia? Across the world, they subsidise. Corruption is the issue. A fully transparent subsidy structure is actually what we need but we’re banging our heads on a brick wall just because we don’t want to address the criminal elements in our government. Even if we pay a subsidy to Dangote to reduce the price, marketers will come and do their own. Half the oil will be diverted to other countries and they will all pretend like they don’t know what is happening.
Crude oil for local markets has nothing to do with international markets. Countries like Saudi Arabia, Russia, UAE can sell petroleum locally at prices that differ from international prices. Problem is, local production trying to price at international rates which is not appropriate. You can’t be pricing petrol in Nigeria at the same rate like Germany or the US, you do not have same financial capability, your citizens have low wages. Companies only speak about international markets so that they can increase prices to maximise profits
I don't know why they focus on only Lagos and Abuja.. In Port Harcourt people have been buying petrol for 990 for the past 2 weeks now.. I'm aware some are even selling for 1300 naira per litre.. What a shame..
CRUDE OIL IS NOT AN INTERNATIONAL COMMODITY IN NIGERIA...WE# SELL TO DANGOTE IN NAIRA # THIS IS AN INTERNAL MARKET...THEREFORE NIGERIANS MUST BENEFIT AT A LOWER PRICE...DANGOTE CAN EXPORT TO OTHERS IN WHATEVER CURRENCY THEY LIKE....SIMPLE LOGIC...
Crude is really an international commodity. We are just cursed as a nation. America has crude, Saudi has also, but these people benefit from the crude. While we are cursed by ours because of bad leadership.
If a year the price of a litre was 195, when the Naira was 400 to 1 USD, and now the price of a litre is 650 and the Naira is 1600 to 1, then one would argue that the price is lower today....Selling oil to Dangote in Naira helps to reduce the demand for forex which should help strengthen the Naira, but the price of oil and PMS will increase and decrease depending on the dollar price of oil. Its time for people to take basic economic 101 classes... Naija we hail thee...
Also remember that not all his crude is procured from Nigeria, but the good thing is that, apart from pms that will be almost sold to the Nigerian market at the moment, there other product that will be sold to foreign customers wihich will provide dollars to fill in thengaps for their dollar needs
I am watching this from PortHarcourt in Rivers State. I bought fuel this morning for N1,300 after spending some time on the queue ..... Its very unfortunate and sad for Nigerians to be going from one level of hardship to another unending ....... Which way Nigeria ?
A 35% windfall tax is levied on unexpected profits made by oil and gas companies operating in the UK - a 35% windfall tax was imposed by the government. The proceeds were used to cushion the effects of the cost of living and inflation.
Please I need someone to help me answer this question - if while NNPC import product in the past and they have pay transportation all the way and exchange rate inclusive, we were still buying lower than the new pricing. How were they able to do it?
There are 3 refineries that NNPCL has exclusive power to determine the pms price. PH, Warri and Kaduna refineries. Dangote is not one of them. We are not all kids in this game!
Which kind of country is this, no fuel in stations but there’s fuel in the hands of road bystanders. NNPC and Government doesn’t really want the people to survive. Nigeria is suffering from sincerity from the Government and NNPC.
The average price of regular Petroleum in California is about $ 4:65 US a gallon. In Texas which is the largest oil producing State in the United States of America the price of a gallon of Petroleum at the pub is $ 2:96 us dollars. More than $ 1:50 difference in the same country. Alberta in Canada which produces a lot of oil has a difference of about 30 cents per liter, the cost at the pump. It is clear that there is an advantage of producing locally. Economically speaking there is something called Economies of Scale, which is the more you produce the less it cost to produce each additional unit. So the more gas Dangote produce the less it costs to produce each unit, up to a point. So if this is so, then Dangote can produce enough to supply the domestic market and surplus Petroleum for the foreign markets. It can then pass on the savings to the Nigerians and charge them less than the foreign market price.
The only advantage local refining provide is a little bit reduction in logistic cost. You have omitted the extra petroleum tax been paid by california residence which account between the price in california and texas. So in short, if left to market forces alone you will only see little difference in price.
@@mrmystery871 Yes each jurisdiction may tack on local taxes and unique costs which accounts for California's high prices however to say that domestic production does not translate to some cost advantages apart from transportation costs is a bit disingenious. Considering the factors of production which may have variable costs. How much does it cost to get the crude out of the soil in Nigeria. Tar sands crude in Alberta cost more to extract and refine for example. I'm just saying that costs are not universal that's why OPEC the cartel exists to set prices.
@@isee8423 Unfortunately it is more expensive to extract crude in Nigeria as most crude in Nigeria are in the deep offshore which makes drilling cost per barrel relatively higher.
From under 200 per liter to over 800 per liter in under 2 years. It cannot be well with the people profiting off this calamity. Everything one hears about Nigeria is sad and depressing.
We should all realise that the oil stream market in Nigeria has been fully deregulated just as the 1999 deregulation of the Nigerian telcos market. It will only get better over time. More refineries will create competition. We produce crude oil that doesn't necessarily transcend to enjoying cheap Premium Motor Spirit at reduced prices. The clamouring for subsidy should be channelled to SMEs which will stimulate gross domestic production, which will simultaneously speed up economic growth and stronger purchasing power to every citizen. The hard truth and bitter pill to swallow.
These guys are enjoying from the inflation so they will never support a reduction in price. Dangote can reduce price and still make money but a longer term.
problem with arise anchors, dont dont listen, they only speak.. the man explained how the price is judged by the position of naira to dollar, then Ayo is asking a question he had already clarified
I noticed that too. I guess she simply needed to vomit the questions she'd already prepared because it's her time to 'ask questions', regardless of if he'd already answered them or not, lol!
He said Dangote is not an NGO. So Airpeace that drop price of economy class from 3 million to 1.2 million is an NGO right? Is Airpeace not being patriotic?
It's pertectic situations in Nigeria today.Government have no genuine feeling towards the poor masses that Government supposed to good care of is a pity and Laughable
All this petro analysis is not necessary. Nigerians only want the government to bring the price of petro down to an affordable level. It will also help the economy and help elevate the Naira.
Dangote staked almost everything he has to build the refinery. He can sell his products at any price profitable to his company. Other Nigerians who are not happy with his pricing should set up their own refineries to compete with him. We should stop telling people what to do with their money.
The best revenge to those that hate the IGBOS is our collective successes and our good intentions/hard work. IGBOS do not have to say anything to the haters. IGBOS do not have to acknowledge them at all. IGBOS, wake up every morning and be the best that you can be and that then will shut them up! IGBOS FOREVER! WE ARE THE IGBOS WORLDWIDE!
This analysis is defective. Crude oil is priced in dollars but the domestic price of crude refine in Nigeria can never be the same when you import fuel. However, why are we having this conversation is because all the government refineries are not working so we now turn to Dangote. What should be the narrative going forward is to have multiple refineries and government should do away with the present NNPC. Nigerians should know that NNPC presently is a trader. They don't have any oil assets except office buildings and filling stations. Nigeria government needs to increase investment in the upsreams using the LNG models to increase crude production beyond the OPEC quotas and promote more local investment in refineries. Citizens of all the oil producing and refining countries pay less for local consumption.
Please allow the Dangote Refinery to produce and distribute the fuel throughout Nigeria so there is no backup of cars at the petro stations. Get all other Refinery’s up and running to get rid of the so called monopoly people are complaining about. Stop complaining and do something to add on more refineries. The more the better for Nigeria as an exporter and not an importer of fuel
Is it really that difficult? It’s not that complex. Why must we ‘sell’ the crude to Dangote? Why can’t we do a swap for personal use? There was another guest that broke it down very simply the other week. Are we having memory loss? Secondly, the shareholders of NNPC are the government, that is the people of Nigeria, stop separating the two. Did NNPC pay for the oil they’re selling? Since we want to talk about how companies must work for a profit, what company is given its goods free of charge. Don’t let these capitalists deceive you!!!!
This man is a 419 see the way he is defending d government
Місяць тому
nope! its business. No sentiment bro! If Your government no dey corrupt, our state own refinery for dey compete with him to create market based value. But now na only him. don't blame him for being smart
So why are Ibo students excluded from Nigerian student loans distribution? Or is that not news worthy? Where are the so-called Ibo representatives in the Nigerian government? Are they going to alert the UN High Commission on Human Rights or not? One option is for the Ibo Diaspora to suspend all remittances to Nigeria and use their fund to set up student loans for Ibo Students excluded by the Nigerian state from NELFUND for tribal reasons.
Why should there be a substantial increase in fuel price simply because the Tinubu Administration had agreed to a mere N70,000 in minimum wage! The government gave with the right hand, and takes back with the left hand. Why not reduce the price of fuel substantially to make the people happy and at ease; to help the economy. Our gullible politicians want to have their cake and eat it. They and their families want to be enjoying the enormous wealth of this great country country alone; regardless of how the states of the people who put them there are. It’s nothing to them building a N21 billion Vice president’s residence, buying expensive luxury cars for them. Why are they so wicked? This is bad governance.
Sir, this is never an analysis that Layman can understand. Even as we are expecting NNPCL refineries when they come up. They NNPCL will also refine at cost, there is cost for everything. Calculation gives it that with current rate of dollar cost of production of petrol is 1129 naira per litre. If NNPCL is refining at N1129, how much will they be selling if they won't be doing their business at a loss? And we want to be buying it even below 200naira. The best thing that can happen is govt paying the subsidy. This govt have messed up everything by devalue the naira. If not the devaluation of naira, petrol will not expensive like this. The analysts analysing this issue have never give good analysis of this issue, maybe they are being scared of this govt)
Gas price in Nigeria is still one of the cheapest in the world. California gas prices are between $4 to over $5 per gallon depending on the grade. The gasoline prices are higher in California than any other states in the USA
The minimum wage in California is $16/hr, but one cannot survive on that in California without government assistance. People have to pay federal, state, and local taxes. In addition to, social security and medical care will be deducted from the pay check. There are many deductions that will come out of that $16/hr. The house rent is way higher in California. The minimum wage in California is higher than national minimum wage, but things are way expensive for lower income workers. Some people have up to three jobs in order to make ends meet. Sales tax is 10.7% on everything except agriculture produces
His analysis is not inorder, just speaking to avoid saying what would implement the government. In the agreement with NLC the government agreed to maintain the price, and are supposed to do as promised
What have this got to do with Yoruba .igbo or Hausa abeg? Can't guys just engage in intellectual discussion or just shot up if u don't have any meaningful things to say?
We put the blame on both the past and present leaders. They all have failed us. What we are experiencing today is also part of the rot since after independence. This present government just made things worse than it has ever been. Note: I am not and will never be an APC supporter because they are all birds of same feather.
NLC and FG are not helping Nigerians. Which one be "Feel betrayed and all these promise and fail" nonsense. So, all the negotiations was not documented and signed, which kind lovers talk be this.🤔😏
This guy is talking nonsense. How can the cost of production for 60000 PH refinery capacity almost be the same with Dangote 650000capacity? Is this what you understand in engineering economy?
Nah.. This analyst isn't only a professional analyst.. He is a professional liar. Apart from standardizing cost of crude for a global market perspective... Because it is found locally, refined locally, should see an effect too.. This should mean that, as long as it is not exported or sold outside Nigeria, there should be a difference in price, small difference but will go a large way in the larger numbers. Secondly.. Why is this guy lying anyhow... God! Anyways, secondly, cost of import, do we understand why import is expensive, you import with large ships designed to keep the refined product in a good condition over the ocean for days to get to Nigeria.. The cost of running that ship, including temperature, operation and crew is crazy high.. Very high.. This in turn affects overall price of import.. As long as that ship is operational, it is consuming a lot of money... From when it's been loaded to when it's unloading. So all this stupid talk is annoying.. Fuel should drop in price, mostly because crude is locally sourced and refined.. And we aren't introducing any new source of production, we are literally reducing while getting a better product in the end. The least I feel it should be sound for us under NGN500 per liter, would have been lower, but due to the naira to dollar matter, this is why I suggested this.
All these commentators are not factoring the fact that Nigeria has crude oil at their backyard and so they shouldn't come and tell us the economics of buying petrol at international price,they should be talking about the inefficiencies of government at all levels that made us not to be able to meet up with our OPEC crude oil quota and not being able to maintain and run our four refineries efficiently so in conclusion what they are teaching us is bad economics
The responsibility to relieving the price of PMS lies solely on the Federal Govt and not with Dangote. He is a businessman and needs to make his profits. He should sell at the Naira equivalent of the international price, and the Federal Govt should subsidize.
Fed. Govt to " "Subsidize"....????? 😮😮😮 Subsidy again..!!!???? For a commodity "extracted in Nigeria & made in Nigeria... are they buying $ to import from Lekki...? What happens to "Law of Comparative Advantage"..?
@@Allwell823 Yes. If NNPCL can sell crude oil to Dangote at international price (although in Naira), why is Dangote not allowed to sell refined oil back to NNPCL at international price? This is pure Hypocrisy. Dangote shouldn't bear the cost alone. It's not an NGO, but a business that must profit...at least he must be able to refund loans used for establishment and also fund the refinery operations.
He is talking about comparison with foreign countries. Sorry, how is the economy of foreign countries when doing this comparison. Secondly are we now buying our own resource within the same country, where it is refined to be supplied within the same country? Am I missing something or does his intelligence mean am stupid or he is more silly than I perceive he is?
The crude oil is sourced from Nigeria, the refinery is located and owned by Nigeria(n's), and the consumers are Nigerian citizens. Even the regulators and government are Nigerian. However, it seems contradictory that the price of the refined product is determined by international market forces. OPEC's focus should be on regulating the oil we export, and Nigeria should sell it's crude to local refineries at domestic prices favourable to it.
The problem is the marketers bringing refined fuel from abroad. If govt should stop them then strike a mutual agreement to sell crude oil in naira to Dangote and buy it back in Naira. But govt will never do that. What we heard before was that market forces will stabilise the price but would the marketers allow, no. So you're at their mercy. And who are they, they are Tinubu et al. So you guys are in a big mess.
The loan collected to build the refinery was sourced from international market, in dollars. Dangote refinery is not a charity business, they must pay back their loans, cover overheads and make profit.
The fact that crude oil is sourced from Nigeria does not mean that the cost of production is zero. A lot of money is spent to extract the crude oil from the ground before it is made available to Dangote. If international market forces should not determine the price of the crude oil, what should then? Crude oil is an international commodity produced for local and international consumption, the price will be in $. The crude oil suppliers in Nigeria has deceived you guys. Yes they will sell the crude oil in Naira, but what they will do behind you is to peg the price of sale in naira to the prevailing exchange rate in USD, just so you know this is the exact same thing with buying the crude oil in USD directly. What exactly is the challenge with buying a product at it's market price? As a businessman will you sell your shoes for 100 naira when somebody else is ready to pay you 400 naira? There is nothing like domestic price in crude oil business. Don't expect petrol prices to fall significantly too.
I have made this argument too. All other countries leverage on their comparative advantage to alleviate the plight of their people. Who don't tell a farmer how to sell his produce even when others are selling at a certain price. Meanwhile, I think NNPC and the government are not sincere to Nigerians. There is no way Nigerians will suffer when we have a functional refinery. Logistics and transportation are huge factors which that has taken off their neck, let them come out clean and be sincere to us.
@@Nadoches By reducing the cost of his crude oil he will find it easy to payback?
This guy is so intelligent 😊 people will not like this fair analysis
Brilliant Analysis
The cost of petrol in Nigeria is zero because it is a natural resource that God gave to us. The price we should be talking about is the price of refining, telling us of international pricing is nonsense as far as I am concerned. My mother goes to my father's farm to bring food for the family and do not tell the market prices of what we eat in the house.
In the same country call nigeria. Between the year 2000 to 2003 there were almost six cement factory in nigeria and the price of a cement bag was about 550 to 650 until the license was given to one of the marketer because most people in government have their money inside that company. What makes you think the same thing will not take place in the issue of Petro . Remember is nigeria we talking about. A place were anything can happen.
A monopolised economy only benefits the rich, no difference to the oil sector and Nigerian's should brace themselves for more price hike and hardship.
A very good analysis and the truth...
I'm depressed the way some analyst will want blind fold things, does it mean that imported products will not be different from locally produced products. No truth is coming out of these people.
As a local refinery whether he sourced the money from foreign currency or not, must offer something different from imported product. Simple as that. With a reason price, dangote refinery can stop importation by marketer. I know marketers will fight back but how? They can't do anything
Buhari said we will miss him. I believe it is official!
Interesting.... fact speaks for itself
bode spoke very well and knowablely. Not all all families are the same
The biggest hurdle we face is that the Nigerian government has made us believe that subsidy is a bad thing. What is the cost of petrol in Saudi Arabia? Across the world, they subsidise. Corruption is the issue. A fully transparent subsidy structure is actually what we need but we’re banging our heads on a brick wall just because we don’t want to address the criminal elements in our government. Even if we pay a subsidy to Dangote to reduce the price, marketers will come and do their own. Half the oil will be diverted to other countries and they will all pretend like they don’t know what is happening.
God bless this man
Crude oil for local markets has nothing to do with international markets.
Countries like Saudi Arabia, Russia, UAE can sell petroleum locally at prices that differ from international prices.
Problem is, local production trying to price at international rates which is not appropriate. You can’t be pricing petrol in Nigeria at the same rate like Germany or the US, you do not have same financial capability, your citizens have low wages. Companies only speak about international markets so that they can increase prices to maximise profits
As an Observer from Europe: EVERYTIME THEY SAY IT WILL GET BETTER, IT WILL GET WORSE!
Indirectly government can pay subsidy by selling crude to Dangote refinery in a discounted prices in order to force down the pump price.
Good initiative though they can't sell below the cost price, yet they can ensure the price is not inflated
He is very smart.
I don't know why they focus on only Lagos and Abuja.. In Port Harcourt people have been buying petrol for 990 for the past 2 weeks now.. I'm aware some are even selling for 1300 naira per litre.. What a shame..
I don't know why the south east and south pay higher. Since last two weeks, we have been buying fuel at ₦950. Today I bought ₦1000
I just tire oo...here in edo state 970 for the past 2 weeks ...I surprise say pple been dey buy fuel 550 bfr 😢
CRUDE OIL IS NOT AN INTERNATIONAL COMMODITY IN NIGERIA...WE# SELL TO DANGOTE IN NAIRA # THIS IS AN INTERNAL MARKET...THEREFORE NIGERIANS MUST BENEFIT AT A LOWER PRICE...DANGOTE CAN EXPORT TO OTHERS IN WHATEVER CURRENCY THEY LIKE....SIMPLE LOGIC...
Crude is sold to Dangote in naira at same value of dollar. The only difference is that USD won't be exchanged. Bro wahala dey, we are doom
Crude is really an international commodity. We are just cursed as a nation. America has crude, Saudi has also, but these people benefit from the crude. While we are cursed by ours because of bad leadership.
@@Loud-mouthNNPC should sell crude oil to DANGOTE at a reduced rate...probably halfprice so that the masses can enjoy.
If a year the price of a litre was 195, when the Naira was 400 to 1 USD, and now the price of a litre is 650 and the Naira is 1600 to 1, then one would argue that the price is lower today....Selling oil to Dangote in Naira helps to reduce the demand for forex which should help strengthen the Naira, but the price of oil and PMS will increase and decrease depending on the dollar price of oil. Its time for people to take basic economic 101 classes... Naija we hail thee...
Well said, Mr. Olabode Sowunmi. The petroleum industry must be regulated to avoid capitalist behaviour.
Fingers crossed
Fuel scarcity but we see hawkers selling in jerry cans. Who is fooling who?
Also remember that not all his crude is procured from Nigeria, but the good thing is that, apart from pms that will be almost sold to the Nigerian market at the moment, there other product that will be sold to foreign customers wihich will provide dollars to fill in thengaps for their dollar needs
Why has it been so impossible for anyone to breakdown the prices of imported PMS and locally produced PMS? So that we can make comparison
Fuel prices will keep going up. Its very unfortunate.
I am watching this from PortHarcourt in Rivers State. I bought fuel this morning for N1,300 after spending some time on the queue ..... Its very unfortunate and sad for Nigerians to be going from one level of hardship to another unending ....... Which way Nigeria ?
A 35% windfall tax is levied on unexpected profits made by oil and gas companies operating in the UK - a 35% windfall tax was imposed by the government. The proceeds were used to cushion the effects of the cost of living and inflation.
APC government has nothing to offer, rather than putting Nigerians into more hardship.
Please I need someone to help me answer this question - if while NNPC import product in the past and they have pay transportation all the way and exchange rate inclusive, we were still buying lower than the new pricing. How were they able to do it?
NNPC paid the balance or difference from their profits. They were importing fuel at 900 ad selling to marketers at 600 per litre.
Sowunmi is just one of them
How?
I think nnpc wants to make as much profit as possible on their old stock, before dangote starts sending his own out
Dangote can only sell to NNPC
they might use dangote refinery to refine their stolen crude.
@@CuriousConnoisseurs its cheaper for them that way and sell to the consumers at least 900 naira per litre...
This analyst is being diplomatic in his response to questions.
He said he wanted people to form their opinion based on the facts on ground. So if this is your opinion, then that's fine.
I still think the directors should have told Dr. Abati and Ayo to keep a serious face, this is a serious issue 😢
There are 3 refineries that NNPCL has exclusive power to determine the pms price. PH, Warri and Kaduna refineries. Dangote is not one of them. We are not all kids in this game!
The problem of the country is not the Govt ,but the Nigerian people are too tolerant to everything
Oga can government subsidize Dangote fuel
Which kind of country is this, no fuel in stations but there’s fuel in the hands of road bystanders. NNPC and Government doesn’t really want the people to survive. Nigeria is suffering from sincerity from the Government and NNPC.
The average price of regular Petroleum in California is about $ 4:65 US a gallon. In Texas which is the largest oil producing State in the United States of America the price of a gallon of Petroleum at the pub is $ 2:96 us dollars. More than $ 1:50 difference in the same country. Alberta in Canada which produces a lot of oil has a difference of about 30 cents per liter, the cost at the pump. It is clear that there is an advantage of producing locally. Economically speaking there is something called Economies of Scale, which is the more you produce the less it cost to produce each additional unit. So the more gas Dangote produce the less it costs to produce each unit, up to a point. So if this is so, then Dangote can produce enough to supply the domestic market and surplus Petroleum for the foreign markets. It can then pass on the savings to the Nigerians and charge them less than the foreign market price.
Perfect 👌, however those responsible for the price regulation are much aware of what you just stated, the corruption level is like irredeemable 🤔🇳🇬
The only advantage local refining provide is a little bit reduction in logistic cost. You have omitted the extra petroleum tax been paid by california residence which account between the price in california and texas. So in short, if left to market forces alone you will only see little difference in price.
@@mrmystery871 Yes each jurisdiction may tack on local taxes and unique costs which accounts for California's high prices however to say that domestic production does not translate to some cost advantages apart from transportation costs is a bit disingenious. Considering the factors of production which may have variable costs. How much does it cost to get the crude out of the soil in Nigeria. Tar sands crude in Alberta cost more to extract and refine for example. I'm just saying that costs are not universal that's why OPEC the cartel exists to set prices.
@@isee8423 Unfortunately it is more expensive to extract crude in Nigeria as most crude in Nigeria are in the deep offshore which makes drilling cost per barrel relatively higher.
@@mrmystery871 Understood, that would be a major factor to consider.
From under 200 per liter to over 800 per liter in under 2 years. It cannot be well with the people profiting off this calamity. Everything one hears about Nigeria is sad and depressing.
and some stil say TINUBU IS A GREAT PRESIDENT:
Why is nobody talking about the PH, Warri, and Kaduna Refinery??
Why are we focusing all our energy on this dangote Refinery?
That last guy most be yuroba accepting everything a bad government throw at him without protecting
We should all realise that the oil stream market in Nigeria has been fully deregulated just as the 1999 deregulation of the Nigerian telcos market. It will only get better over time. More refineries will create competition.
We produce crude oil that doesn't necessarily transcend to enjoying cheap Premium Motor Spirit at reduced prices.
The clamouring for subsidy should be channelled to SMEs which will stimulate gross domestic production, which will simultaneously speed up economic growth and stronger purchasing power to every citizen.
The hard truth and bitter pill to swallow.
Which way Nigeria?
Of course, more Private Refineries will emerge... just like in the Telecom GSM Sector. Then the prices will certainly, become competitive!
This is the only way Dangote can be kept in check
is the government saying it was paying over 700h to keep the fuel at 187h before this government?
These guys are enjoying from the inflation so they will never support a reduction in price. Dangote can reduce price and still make money but a longer term.
problem with arise anchors, dont dont listen, they only speak.. the man explained how the price is judged by the position of naira to dollar, then Ayo is asking a question he had already clarified
I noticed that too. I guess she simply needed to vomit the questions she'd already prepared because it's her time to 'ask questions', regardless of if he'd already answered them or not, lol!
He said Dangote is not an NGO. So Airpeace that drop price of economy class from 3 million to 1.2 million is an NGO right? Is Airpeace not being patriotic?
Just imagine the animals saying they'll buy with any amount
Dangote refinery might not crush petrol price, but it will solve petrol scarcity.
It's pertectic situations in Nigeria today.Government have no genuine feeling towards the poor masses that Government supposed to good care of is a pity and Laughable
All this petro analysis is not necessary. Nigerians only want the government to bring the price of petro down to an affordable level. It will also help the economy and help elevate the Naira.
This man is APC member 😅😅
👌👌👌👌👌
Once you no hear wetin you like , na APC member
So how come south south and south east pays the highest for fuel? Terrible evil being committed in broad daylight
Dangote staked almost everything he has to build the refinery. He can sell his products at any price profitable to his company. Other Nigerians who are not happy with his pricing should set up their own refineries to compete with him. We should stop telling people what to do with their money.
The best revenge to those that hate the IGBOS is our collective successes and our good intentions/hard work.
IGBOS do not have to say anything to the haters.
IGBOS do not have to acknowledge them at all.
IGBOS, wake up every morning and be the best that you can be and that then will shut them up!
IGBOS FOREVER! WE ARE THE IGBOS WORLDWIDE!
Ohh... Dangote refinery na filling station 😂😂😂😂
This analysis is defective. Crude oil is priced in dollars but the domestic price of crude refine in Nigeria can never be the same when you import fuel. However, why are we having this conversation is because all the government refineries are not working so we now turn to Dangote. What should be the narrative going forward is to have multiple refineries and government should do away with the present NNPC. Nigerians should know that NNPC presently is a trader. They don't have any oil assets except office buildings and filling stations. Nigeria government needs to increase investment in the upsreams using the LNG models to increase crude production beyond the OPEC quotas and promote more local investment in refineries. Citizens of all the oil producing and refining countries pay less for local consumption.
Lol, Dangote will not tell Afreximbank that they want to be patriotic.
Why are we still calling it NNPC, when Tinubu has sold it to his family business Oando.
Please allow the Dangote Refinery to produce and distribute the fuel throughout Nigeria so there is no backup of cars at the petro stations. Get all other Refinery’s up and running to get rid of the so called monopoly people are complaining about. Stop complaining and do something to add on more refineries. The more the better for Nigeria as an exporter and not an importer of fuel
Is it really that difficult? It’s not that complex. Why must we ‘sell’ the crude to Dangote? Why can’t we do a swap for personal use? There was another guest that broke it down very simply the other week. Are we having memory loss?
Secondly, the shareholders of NNPC are the government, that is the people of Nigeria, stop separating the two. Did NNPC pay for the oil they’re selling? Since we want to talk about how companies must work for a profit, what company is given its goods free of charge. Don’t let these capitalists deceive you!!!!
This man is a 419 see the way he is defending d government
nope! its business. No sentiment bro! If Your government no dey corrupt, our state own refinery for dey compete with him to create market based value. But now na only him. don't blame him for being smart
Lol illiterate. Go learn economics
Omo Nigeria Is Collapsing 😭
I do not y you guys Centered ur conversations only on the pms prices instead your conversations should be on how to make Naira Strong
So why are Ibo students excluded from Nigerian student loans distribution?
Or is that not news worthy? Where are the so-called Ibo representatives in the Nigerian government? Are they going to alert the UN High Commission on Human Rights or not?
One option is for the Ibo Diaspora to suspend all remittances to Nigeria and use their fund to set up student loans for Ibo Students excluded by the Nigerian state from NELFUND for tribal reasons.
Is Nigerians leaders not shameful?at this age of Nigerian people are still queuing for petrol...it is shameful...
I will vote Tinubu
Why should there be a substantial increase in fuel price simply because the Tinubu Administration had agreed to a mere N70,000 in minimum wage! The government gave with the right hand, and takes back with the left hand. Why not reduce the price of fuel substantially to make the people happy and at ease; to help the economy. Our gullible politicians want to have their cake and eat it. They and their families want to be enjoying the enormous wealth of this great country country alone; regardless of how the states of the people who put them there are. It’s nothing to them building a N21 billion Vice president’s residence, buying expensive luxury cars for them. Why are they so wicked? This is bad governance.
like how they forced dangote to only sell to nnpc lol, making sure he cant sell less
Sir, this is never an analysis that Layman can understand. Even as we are expecting NNPCL refineries when they come up. They NNPCL will also refine at cost, there is cost for everything. Calculation gives it that with current rate of dollar cost of production of petrol is 1129 naira per litre. If NNPCL is refining at N1129, how much will they be selling if they won't be doing their business at a loss? And we want to be buying it even below 200naira. The best thing that can happen is govt paying the subsidy. This govt have messed up everything by devalue the naira. If not the devaluation of naira, petrol will not expensive like this. The analysts analysing this issue have never give good analysis of this issue, maybe they are being scared of this govt)
maybe subsidizing will be a possibility since it will be cheaper to subsidize local petrol
This guy is always talking nonsense
Gas price in Nigeria is still one of the cheapest in the world. California gas prices are between $4 to over $5 per gallon depending on the grade. The gasoline prices are higher in California than any other states in the USA
Compare Apple's to 🍎. What is minimum wage in those places you mentioned to what we have here?
The minimum wage in California is $16/hr, but one cannot survive on that in California without government assistance. People have to pay federal, state, and local taxes. In addition to, social security and medical care will be deducted from the pay check. There are many deductions that will come out of that $16/hr. The house rent is way higher in California. The minimum wage in California is higher than national minimum wage, but things are way expensive for lower income workers. Some people have up to three jobs in order to make ends meet. Sales tax is 10.7% on everything except agriculture produces
His analysis is not inorder, just speaking to avoid saying what would implement the government. In the agreement with NLC the government agreed to maintain the price, and are supposed to do as promised
You guys are hiding from the main issue. Dangode must not be the sole producer of Nigeria petrol. That will be suicidal.
We won't die. The Yorubas are buying it as well. Igbos will buy, the Hausas will also. D poor man will breath just like the rich.
No one dies alive.
What have this got to do with Yoruba .igbo or Hausa abeg? Can't guys just engage in intellectual discussion or just shot up if u don't have any meaningful things to say?
@@okeoja4447hahahahha😀 ma country🇳🇬 people, please be calming down🙏
This commentator is very ignorant of real situation on ground, he is just been academic
This analyst no dey buy fuel ..lol.. he just dey talk like say him no dey concerned
Shame on all of you. This time you dare not blame Deziani or GEJ. Mad people everywhere.
We put the blame on both the past and present leaders. They all have failed us. What we are experiencing today is also part of the rot since after independence. This present government just made things worse than it has ever been.
Note: I am not and will never be an APC supporter because they are all birds of same feather.
@@danielehindero7735 i think people forget that most of apc politicians defected from pdp
Lies lies lies, Nigeria una don enter 1 chance 😂😂
NLC and FG are not helping Nigerians. Which one be "Feel betrayed and all these promise and fail" nonsense. So, all the negotiations was not documented and signed, which kind lovers talk be this.🤔😏
This guy is talking nonsense. How can the cost of production for 60000 PH refinery capacity almost be the same with Dangote 650000capacity? Is this what you understand in engineering economy?
Liars, liars, liars........
Nah.. This analyst isn't only a professional analyst.. He is a professional liar.
Apart from standardizing cost of crude for a global market perspective... Because it is found locally, refined locally, should see an effect too.. This should mean that, as long as it is not exported or sold outside Nigeria, there should be a difference in price, small difference but will go a large way in the larger numbers.
Secondly.. Why is this guy lying anyhow... God!
Anyways, secondly, cost of import, do we understand why import is expensive, you import with large ships designed to keep the refined product in a good condition over the ocean for days to get to Nigeria..
The cost of running that ship, including temperature, operation and crew is crazy high.. Very high.. This in turn affects overall price of import..
As long as that ship is operational, it is consuming a lot of money... From when it's been loaded to when it's unloading.
So all this stupid talk is annoying..
Fuel should drop in price, mostly because crude is locally sourced and refined.. And we aren't introducing any new source of production, we are literally reducing while getting a better product in the end.
The least I feel it should be sound for us under NGN500 per liter, would have been lower, but due to the naira to dollar matter, this is why I suggested this.
All these commentators are not factoring the fact that Nigeria has crude oil at their backyard and so they shouldn't come and tell us the economics of buying petrol at international price,they should be talking about the inefficiencies of government at all levels that made us not to be able to meet up with our OPEC crude oil quota and not being able to maintain and run our four refineries efficiently so in conclusion what they are teaching us is bad economics
The responsibility to relieving the price of PMS lies solely on the Federal Govt and not with Dangote. He is a businessman and needs to make his profits. He should sell at the Naira equivalent of the international price, and the Federal Govt should subsidize.
Fed. Govt to " "Subsidize"....????? 😮😮😮
Subsidy again..!!!???? For a commodity "extracted in Nigeria & made in Nigeria... are they buying $ to import from Lekki...?
What happens to "Law of Comparative Advantage"..?
@@Allwell823 Yes. If NNPCL can sell crude oil to Dangote at international price (although in Naira), why is Dangote not allowed to sell refined oil back to NNPCL at international price? This is pure Hypocrisy. Dangote shouldn't bear the cost alone. It's not an NGO, but a business that must profit...at least he must be able to refund loans used for establishment and also fund the refinery operations.
Around 11minutes, so analyst do not interpret. Rubbish!
He is talking about comparison with foreign countries. Sorry, how is the economy of foreign countries when doing this comparison.
Secondly are we now buying our own resource within the same country, where it is refined to be supplied within the same country? Am I missing something or does his intelligence mean am stupid or he is more silly than I perceive he is?
Too much talk talk people are starving. I don't believe in anything good from these people
😂😂😂 lol
Just imagine the legacies Tinubu and APC are creating for themselves. Very sad!
You are talking rubbish