Sirlins:
Then why are we celebrating it,Petroleum refineries convert (refine) crude oil into petroleum products for use as fuels for transportation, heating, paving roads, and generating electricity and as feedstocks for making chemicals. Refining breaks crude oil down into its various components, which are then selectively reconfigured into new products.
Why won't we benefit from it, something that will make price if petroleum almost free in Nigeria

Abi oo, ask them ooo

LordReed:


This sounds so unintelligent. He is telling us that subtracting the cost of shipping all the way from Russia or Europe or the US plus the cost of money (exchange rates) plus insurance will not significantly impact the final cost. Does he think he is speaking to infants.

He's speaking to Nigerians. Whatever significant impact is eroded by removal of subsidy and Nigerian market conditions.

LordAdam16:


Circa 450 I hear.

-Lord

So you are saying the removal of the cost of transportation, exchange rate charges, insurance, etc. will not significantly impact that cost?

inoki247:
Lol Mak dem still dey play....


Shey Dangote open refinery before for fuel giveaway....


At least landing price no go dey again...

Which one be landing price?

Just say import tax abi duties and shipping cost will be off...

Freelancer2020:




They always think ppl are dunce, how can you compare the cost of a product made locally to the one refined in a foreign land, and they need to be careful tbh.

How much be local rice,, how much be foreign rice?

Some China slippers even cost lesser than naija made slippers...

Cost of production varies in every country...
In Nigeria cost of production includes sum total of all u spend before getting ur product,
From bribing officials, paying tax to communities, local govt, state govt and fed govt,. Other sundry charges and security Levy both to state, local and fed govt plus hiring police and army for protection plus wages to workers both real n ghost staffs...

So it cost more to do business in Nigeria than in any other country

inoki247:
Lol Mak dem still dey play....


Shey Dangote open refinery before for fuel giveaway....


At least landing price no go dey again...

Please, do u know the accurate price? How much is landing price per barrel please? (Ibarrel=158.987~159litres of crudeoil)

yaki84:

Which one be landing price?

Just say import tax abi duties and shipping cost will be off...

I know import tax duties wella & shipping cost. (via Air,(train) freight; sea, pipelines etc etc ). Just came across term landing price here. And wouldnt mind the poster enlightening me more about it also or anyome knowleadgeable about landing price.

ignis:
So crude oil transported to Europe processed and transported back to Nigeria will cost same price with crude oil processed in my backyard here in Lagos?

Dangote is part of our politicians and part of the problem of Nigeria.

Dangote won’t be getting crude oil free he will buy it normal opec world price all refinery are buying it

Menclothing:


Dangote won’t be getting crude oil free he will buy it normal opec world price all refinery are buying it

As long as the masses still have the capacity to accommodate all these cost increments, then no wahala. But there is always an elastic limit and a breaking point during every stress test.

blaise26abj:
Freight cost to and from nigeria , landing cost . Foreign refining expenses as well as taxes in the countries with the refineries . How will it not reduce?

However , I always said Dangote is no fool . He borrowed money to build the refinery . He would rather sell at the current price or higher to quickly meet his financial obligation . In fact if it is 1000 per litre the better for him . Why do you think that subsidy removal coincides with the start of his refinery ? Make we dey play dey go .

They all invested in his refinery all the tinubu them. That is whybthey want to make him a Monopoly in the oil market so that they can all cash out. How can we have crude in abundance and still be paying high for it despite the working refineries. I have said all this politicians and their cronies need die b4 naija go better

Sometimes I wonder who trained these ones?

Godszilla:


https://punchng.com/dangote-ph-refineries-others-wont-change-fuel-price-nnpcl/

This man need to be relieved of his position. He had became wizard there.

Menclothing:


Dangote won’t be getting crude oil free he will buy it normal opec world price all refinery are buying it

stop falling for lying politicians shìt. Dangote will be refining 350k bpd per day. a barrel of crude contains 135ltr of fuel. dangotes refinery will spend 25m naira on those barrels daily (@$72 intl price)but those barrels will produce pms worth 47.2m litres(and that's just PMS). now let's assume he sells for 200 per litre that means daily revenue from pms alone will be 10Bn. you really mean to tell me that dangote will not make any profit from the 10bn

NamelessOGBENI:
What a mysterious country we are living in...

I tire o.

Me I sha want all the oil block owners to be removed from our oil block. Useless thieves siphoning our wealth for themselves.

gimakon2:


Why did he politically outsmart IBETO Cement , Rock Cement nko?
Be mindful of your statements o. Ehen.

Ibeto is an importer of cement, he does not produce cement

Marlodah:


This people, you don't seems to understand what they said o my oga, they said no money to even fund fuel subsidy ni and already we are on debts, like every month no money paid to nnpc for the subsidy meanwhile the money we are owing now nnpc don enter trillions because of subsidy

A very messy situation the government is, no doubt.

Godszilla:


https://punchng.com/dangote-ph-refineries-others-wont-change-fuel-price-nnpcl/

Na Dangote finger print i dey see for NNPLC ooo..

Dangote Group don penetrate government...

AareGaa:


Ibeto is an importer of cement, he does not produce cement

Are you sure?

Pls replace this mele kyari with another quality person pls.. he has done his bit.

juvewalex:
He didn't explain why local production won't reduce fuel price , if you're producing in Nigeria, will there still be a landing cost ?

Nigeria government is never straight forward in dealing with its citizens.

Na still corruption be this anyways.

They will probably impose a huge tax on the refinery which the end users will end up paying.

Evil government.

juvewalex:
He didn't explain why local production won't reduce fuel price , if you're producing in Nigeria, will there still be a landing cost ?

Nigeria government is never straight forward in dealing with its citizens.

Na still corruption be this anyways.

You can imagine! I was wondering alike. How can you say that a product made in Lagos and another that travelled over continents with attendant shipping cost would still be the same price and there are no extraneous reasons for that? Even when you order on Jumia shipping and delivery cost makes a difference. This there economics ee!

Great0ne1:

Opono!! You that is from his region, hope you are buying at #120 ? Foolish fool

Go and get a licence to start your own refinery and stop envying Dangote.

The envy and bitterness in you won't make you live long. That's why people from your region hardly live long. Bitterness has been killing them since 1967

USA refined and sell their fuel at 0.55 dollars to their citizens. Which is roughly 225 naira rate and don't forget it's in their own rate over there which is cheaper than naira.

But you're telling us that after the removal of all the logistics while refining our own oil in Nigeria, we would still be paying enormous fees? Dey play. When is Tinubu going to appoint his own NNPC director? That kyari no be am. I wonder what that CBN governor, Emefiele is still doing in office too. Also, Tinubu needs to look into our oil blocks and their owners. Remove all oil block owners. Enough is enough! All the oil block owners are so rich and affluent as a result of siphoning our wealth at the expense of the masses. The audacity!

Menclothing:


Dangote won’t be getting crude oil free he will buy it normal opec world price all refinery are buying it

Are Nigerian getting it freely now?

But my question is why will It not reduce the price?

While will the price of a domestically produced commodity not be cheaper than the the one imported?

You said they will add the cost of production and sell at the same price, are the foreign refineries not adding thier own costs of production too?

Why should the domestically produced not be cheaper, given that the cost of importation has been removed and the raw materials are domestically acquired?


I really need explanation

43Ronin:

stop falling for lying politicians shìt. Dangote will be refining 350k bpd per day. a barrel of crude contains 135ltr of fuel. dangotes refinery will spend 25m naira on those barrels daily (@$72 intl price)but those barrels will produce pms worth 47.2m litres(and that's just PMS). now let's assume he sells for 200 per litre that means daily revenue from pms alone will be 10Bn. you really mean to tell me that dangote will not make any profit from the 10bn

Pls don't mind them.

I have done all dis calculations in d early days of Buhari's admin, it was at dat point I gave up on both GEJ's PDP & Buhari's APC rulerships!

Would u even believe if I told u dat there's nothing wrong wit our refineries?
and dat there's deliberate sabotaging forces on it?

Do u know d enormous profits coming out of a single barrel of crude?

These ppl are aaaaalllll thieves!

People need to remember that Dangote refinery is a private enterprise and not a public enterprise. The FG is also a shareholder in Dangote Refinery via NNPC and will always want to max out profitability irrespective of change in dynamics. Its a capitalist market.

juvewalex:
He didn't explain why local production won't reduce fuel price , if you're producing in Nigeria, will there still be a landing cost ?

Nigeria government is never straight forward in dealing with its citizens.

Na still corruption be this anyways.

LordReed:


So you are saying the removal of the cost of transportation, exchange rate charges, insurance, etc. will not significantly impact that cost?

These charges are not as heavy as you think when you compute them to a per unit (liter) cost.

I'll use the examples. "Cost of transportation" by oil tanker comes out to circa 1 cent per liter. That's like N5 at official exchange rate. It does fluctuate rapidly tho', so it can get much higher, but that is generally short lived. Since the start of the war, it's been about 2-3 cents.

Exchange rate charges are irrelevant. The refinery would fund most of their liabilities in $ and will price their products similarly.

Nigeria will sell oil to Dangote in $ at official exchange rate. I'm very certain civil servants would not want to hear that the government can't pay salaries because we're selling half of our precious 1.2m barrels per day to Dangote at giveaway prices. The governors would not accept it. They'll take NNPC/FG to court.

Accordingly, Dangote will sell back to us in $ at official exchange rate.

Similarly, insurance rates are almost negligible, especially since Gulf of Guinea piracy was subdued.

Further to these facts, the Dangote Refinery has been a very pricey endeavor. Whatever efficiencies can be scraped from eliminating charges related to importing petroleum products will be offset by costs like interest on the loans (he's started paying them), insurance of the complex, and other expenditures. I think one of the few places he'd see significant lower operating margins compared to his competitors is personnel costs.

And if I underwrote his loan, I sure as hell will be pissed if he directed that saving to reducing the price of the products than clearing his obligations.

The only thing that'd keep Dangote and his backers honest is permitting importation of PMS. Seun alluded to it in one of his posts. He wants 50 companies approved to import gasoline. I think that's too many. 10 would do. This way NNPC; the independent importers; and refinery owners like Dangote, BUA, and co will duke it out for market share.

NNPC already imports enough gasoline for the entire West African sub region. Dangote's refinery can fully cover our current gasoline needs. So giving more import licenses out will create a downward pressure on prices. There'd be collusion of course, since this is Nigeria. But there'd be a limit to any price fixing.

-Lord

juvewalex:
He didn't explain why local production won't reduce fuel price , if you're producing in Nigeria, will there still be a landing cost ?

Nigeria government is never straight forward in dealing with its citizens.

Na still corruption be this anyways.

He explained it very well on AriseTV, this short article doesnt. He said the cost of freight will be gone and its about N3 on the litre and wont be a significant difference on pump price. He said dt what local refining will do over time is drive costs down across the whole west africa since there will be more efficiency in the system and production costs usually come down with efficiency.