HENCE FORT THIS WILL BE THE PRICE OF PETROL ACCORDING TO CHANGES IN INTERNATIONAL PRICE OF CRUDE IN NAIRA VALUE. I.E. THE COST OF PETROL EXCLUDING TRANSPORTATION COST.(You must read this..)
A barrel of crude oil contains 159 litters of products or 42 gallons; it is broken down as follows:
Petrol 72 litters i.e. 19.15 gallons
Diesel 34 litters i.e. 9.21 gallons
Jet fuel/ Kerosene 14 litters i.e. 3.82 gallons
Petrol chemical, feed stocks,
Bitumen etc 27 litters i.e. 7.27 gallons
Liquefied petroleum gas 6 litters i.e. 1.72 gallons
Heating oil 6 litters i.e. 1.75 gallons
The following calculation reveals the percentage of each product in a barrel of crude.
Petrol 72 litters x 100 = 45.3%
159 1
Diesel 34 litters x 100 = 21.4%
159 1
Jet fuel/ Kerosene 14 litters x 100 = 8.8%
159 1
Petrol chemical, feed stocks 27 litters x 100 = 16.9%
159 1
Bitumen etc 6 litters x 100 = 3.8%
159 1
Bitumen etc 6 litters x 100 = 3.8%
159 1
Presently a barrel of crude is aprox 100 Dollars
Since we have 159 litters in a barrel of crude and it is being sold for 100 Dollars
45.3% of 100 Dollars gives us the price of 72 litter of petrol in a barrel:
Which is 100 x 45.3 = 45.3 Dollars
100 1
= 45.3 dollars x 160 (exchange rate)
= 72 litters of petrol in Naira = N7, 248.00
A litter of petrol will cost = N100.60 k
Refine cost is btw N12 and N24 depending on the quality. Lets us stay in the middle = N18
N100.60 + N18.00 = N118.60.
Therefore if a barrel of crude = 100 Dollars
A litter of refine petrol will cost N1180.60k
This exclude only the exportation and importation cost.
This will be the approximate cost if we refine here in Nigeria. This is so because FG decide to sell to Nigerians at International price and as long as price rice in international market it will continue to rise here too and affect Naira since our means of exchange is dollar.
The only scenario where we can have a liter of petrol at something close to N65 is when a barrel of crude come down to as low as 55 dollars per barrel in international market.
Another issue is that of Nigerian business men who always find it easy to increase price but find it hard to reduce it. We can site the example of cement. Even when the cost of production come down in many sector, for the absent or inefficiency of customer protection agency and poor government policy to protect consumers, the manufacturer retort to fleecing the people.
In conclusion, with the above revelation it is clear that the pain of subsidy removal is not a short term pain but hinges on the fluctuation of price in the international market. Having behind our mind the politics of the oil cartel who enjoys crises period, for instance in the middle east, because this always lead to rise in crude price and mean more money for them. This mean at any point there is crises in any oil producing country we must catch the cold here in Nigeria.
Nigerian must pray every night before going to sleep that crises must not erupt in any of the oil producing country which will lead to drop in supply and rise in crude price so as not to wake up the next day meeting pump price increase.
Another mystery is the fact that the government of Nigeria should never be crying woe over the sum of 1.3 trillion, claiming this is what they want to use to revamp the economy or build infrastructure. For instance, with the following revelation about undeclared trillion of naira that is accrued from sale of crude and excess crude revenue.
Nigeria exports 2.5 million of crude per day.
Since we consume 450,000 barrel (unverified)
The sum left for export remains 2,050,000 million
If sold at $75 dollars per barrel, the benchmark, we have:
$153,750,000 million dollars per day accruing from crude alone.
$56,272,500,000 billion dollars per year.
N8,722,237,500,000 trillion naira (8.7 trillion)
The present budget is 4.7 trillion i.e we still have 4 trillion left untouched
This is without excess revenue accrued from selling at present market price of aprox 105 dollars.
This is also without the IGR (internal generation revenues) money accrue from other sectors.
Where does the 4 trillion disappear into?
Where does the IGR and other revenue generated internally and other export disappear into?
Where does the excess crude revenue, the difference between $75 per barrel and $105 per barrel disappear into?
Yet we tell Nigeria the economy will crash.
And we intend to remove subsidy because of a paltry sum of 1.3 trillion that is enough to send million of Nigerian to their early grave.
A paltry sum that is enough to cause hyper inflation that can swallow and make the budget valueless.
The argument by Sanusi that we are subsidizing consumption is misleading. those who use petrol to fuel a cybercafé business, barbing salon, hairdresser, tailor, commercial drivers etc use it for business, that is production not consumption.
Also almost all the OPEC country subsidize fuel even some very low and they have both private and public refineries. some of these countries do not have border with oil nations and they control smuggling effectively e.g Libya, Venezuela etc
IF WE FAIL TO KILL CORRUPTION IN GOVERNANCE NOW, CORRUPTION WILL KILL THIS COUNTRY SOON.
Pastor Ayoola Iyanaipaja on FB. Member of MAGG (Movement for Accountable and Good Governance on FB)
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