EWURA yafafanua kutoshuka bei ya mafuta nchini

[Mbalamwezi]

Bado EWURA jipu bhana,sasa unataka kutuambia tatizo kodi au usafiri,unaambiwa kenya mafuta ni sawa na Tshs 1,200/= sisi shida ni nini?lengo kutukomoa walaji au ni kukuza uchumi?

MKuu Mkoroshokigori,

msikubali kudanganywa kirahisi. Nenda hapa Pump Prices

utapata bei za mafuta Kenya. Ukiona uvivu, Nairobi lita ya Petroli ni sh. za Kenya 88, ambazo hapa ni sawa na sh 1, 885. Mbona tunadanganywa kirahisi hivi na taarifa zote ziko mtandaoni?

 

[adolay]

Mbalamwezi

kwenye kifungu hiki over uporomokaji 70% tangu katikati ya 2014


("...over-supply that has led to a more than 70% collapse in oil prices since the middle of 2014" )

1. Tangu katikati ya 2014 bado miezi miwili haijapita? kama imepita inakuwaje tusubiri miezi miwili zaidi?

2. Tuki-refer kwenye hiyo 70%, je Tanzania imeporoka kwa asilimia ngapi?


Angalizo
dola imeyapandisha si kwa zaidi ya 23%

70 - 23 = 43% inaelea.....Tanzania hatujashusha japo 15 au 20% ? au ewura na utapeli?

 

[JAMII-ASM]

Kinachonishangaza mafuta yakipanda bei kwenye soko la dunia wauzaji nao wanapandisha ...tena fasta. Cha ajabu wanapandisha hata stock ya mafuta walionunua kwa bei ya chini.na EWURA wanaangalia tu.

 

[Mbalamwezi]

MKuu Adolay, jambo lingine unalosahau ni kwamba hizo data za world market siyo za mwezi au kipindi kimoja, siyo bei za mara moja. Ni hesabu za cummulative, unapoambiwa bei sasa zimeshuka hadi kufikia "more than 70% collapse in oil prices since the middle of 2014." haina maana sasa au mwezi huu zimeshuka kwa asilimia hizo. Maana yake zimeshuka pole pole toka katikati ya 2014 hadi kufikia sasa. Katika mwendo huo, kuna miezi ilipanda kidogo na kushuka tena.

Locally, impact yake unaiona bei zinaposhuka kwa sh 200 au 300, n.k kila mwezi, na zinapanda tena na kushuka.

 

[Mbalamwezi]

Mbalamwezi

kwenye kifungu hiki over uporomokaji 70% tangu katikati ya 2014


("...over-supply that has led to a more than 70% collapse in oil prices since the middle of 2014" )

1. Tangu katikati ya 2014 bado miezi miwili haijapita? kama imepita inakuwaje tusubiri miezi miwili zaidi?

2. Tuki-refer kwenye hiyo 70%, je Tanzania imeporoka kwa asilimia ngapi?


Angalizo
dola imeyapandisha si kwa zaidi ya 23%

70 - 23 = 43% inaelea.....Tanzania hatujashusha japo 15 au 20% ? au ewura na utapeli?

hiyo swali namba 1 mbona impact yake ilipita kaka? na hata ukiangalia kwenye machapisho ya ewura, miezi ya eneo hilo inajieleza tu. Nikipata chapisho hilo nitaliweka hapa. Kumbuka, kila Jumatano ya mwanzo bei hizi zinatangazwa na sisi tunabadilisha.

 

[adolay]

hiyo swali namba 1 mbona impact yake ilipita kaka? na hata ukiangalia kwenye machapisho ya ewura, miezi ya eneo hilo inajieleza tu. Nikipata chapisho hilo nitaliweka hapa. Kumbuka, kila Jumatano ya mwanzo bei hizi zinatangazwa na sisi tunabadilisha.

Maswali huulizwa yapate majibu mkuu, vinginevo hakuna haja ya mihani maana maswali takribani 99% yalishajibiwa

Nadili najuwa umesimama kutetea biashara yako na badala ya ewura....sasa tupatie majibu siyo yapo...yalikuwepo....nk


kwenye kifungu hiki over uporomokaji 70% tangu katikati ya 2014


("...over-supply that has led to a more than 70% collapse in oil prices since the middle of 2014" )

1. Tangu katikati ya 2014 bado miezi miwili haijapita? kama imepita inakuwaje tusubiri miezi miwili zaidi? - wizi, wizi, wizi.....

2. Tuki-refer kwenye hiyo 70%, je Tanzania imeporoka kwa asilimia ngapi? uwiano upo vipi kuporoka huku tangu 2014 katikati mpaka sasa ( gragh or table to suport you explanation) tuelewe kama proportional ya kila miezi miwili ipo sawa au hadaa

Angalizo
dola imeyapandisha si kwa zaidi ya 23%

70 - 23 = 43% inaelea.....Tanzania hatujashushajapo 15 au 20% ? au ewura na utapeli?

 

[Habari ya Mujini]

Hilo Shirika ni mzigo kwa mtanzania, livunjwe tu na kazi zao zifanywe na TRA

Samahani ila ukweli ni kwamba sijawahi kuliamini hili shirika hata kidogo..!!

 

[Habari ya Mujini]

Kinachonishangaza mafuta yakipanda bei kwenye soko la dunia wauzaji nao wanapandisha ...tena fasta. Cha ajabu wanapandisha hata stock ya mafuta walionunua kwa bei ya chini.na EWURA wanaangalia tu.

Ewura ni washenzi

 

[adolay]

Mim nauliza kutaka kufaham nini kinaendelea na hizi hoja tata za..

1. miezi miwili histogragh ipoje?, linear/slope can tell, exponential au au miezi miwili ya maneno isiopimika kimahesabu? 2014....2015......miezi yakitapeli ya ewura

2. kodi... watu wanauliza kodi ya mafuta hapa tanzania ni 700 tsh/lita?....jibu liwe ndio au hapana...simple and clear sio mwarabu analipa kodi 752....swali linauliza tanzania...

3. tangu maporomoko ya bei yaanze cummulative tanzania tumeshuka kwa asilimia ngapi....data to suport

4 . na mengine

 

[King Kong III]

Mie nilitegemea kama mafuta mwanzo yalikuwa yanauzwa $ 140 kwa pipa na sasa ni $28,kama factor zote zikiremain constant basi pumping price inabidi ishuke kama hivi nitakavyoeleza.

$140 kwa pipa inamaanisha lita moja ya crude iliuzwa kwa 1840 huku tuliuziwa kwa 2200 hadi 2300(Najua kabisa kwenye crude inapatikana diesel,lpg,jet fuel,petrol,oil etc).Hii inamaanisha hadi kufika huku kuna ongezeko kama la 450 hadi 500 kwa evarage.

Sasa Pipa ni $ 28 ina maanisha kwa lita wanauziwa kwa Tsh 368 kwahiyo inamaanisha mfanyabiashara mwanzo alikuwa akinunua kwa Tsh 1840 Crude sasa ananunua kwa Tsh 368 kwa litre,kwahiyo ana unafuu wa 1472.

Uzuri wa number huwa hazidanganyi hii inamaanisha mfanyabiashara aliyekuwa ananunua kwa $140 na kuuza kwa 2300 leo hii amepata unafuhu wa Tsh 1472 sasa iweje bado ashushe 300 tu wakani ana unafuhu mkubwa? au serikali imeongeza tozo zake za kodi? Kwenye bajeti ipi?

Ewura,wafanyabiashara(bulk procurement) na viongozi wa serikali wenye maamuzi msitufanye wa TZ hatuna akili,Pumping price hatakiwi kuzidi 1350 kwa diesel na petrol acheni wizi.(Kwa sababu ya kuporomoka thamani ya shilingi yetu kutoka 1600 hadi 2100 ,tukichukua 368+450+500=1318)

Note: 368 Bei ya sasa,450 ongezeko la bei hadi kufika huku na 500 kuporomoka kwa Tsh.

 

[Mbalamwezi]

Mie nilitegemea kama mafuta mwanzo yalikuwa yanauzwa $ 140 kwa pipa na sasa ni $28,kama factor zote zikiremain constant basi pumping price inabidi ishuke kama hivi nitakavyoeleza.

$140 kwa pipa inamaanisha lita moja ya crude iliuzwa kwa 1840 huku tuliuziwa kwa 2200 hadi 2300 (Najua kabisa kwenye crude inapatikana diesel,lpg,jet fuel,petrol,oil etc).Hii inamaanisha hadi kufika huku kuna ongezeko kama la 450 hadi 500 kwa evarage.

Sasa Pipa ni $ 28 ina maanisha kwa lita wanauziwa kwa Tsh 368 kwahiyo inamaanisha mfanyabiashara mwanzo alikuwa akinunua kwa Tsh 1840 Crude sasa ananunua kwa Tsh 368 kwa litre,kwahiyo ana unafuu wa 1472.

Uzuri wa number huwa hazidanganyi hii inamaanisha mfanyabiashara aliyekuwa ananunua kwa $140 na kuuza kwa 2300 leo hii amepata unafuhu wa Tsh 1472 sasa iweje bado ashushe 300 tu wakani ana unafuhu mkubwa? au serikali imeongeza tozo zake za kodi? Kwenye bajeti ipi?

Ewura,wafanyabiashara(bulk procurement) na viongozi wa serikali wenye maamuzi msitufanye wa TZ hatuna akili,Pumping price hatakiwi kuzidi 1350 kwa diesel na petrol acheni wizi.(Kwa sababu ya kuporomoka thamani ya shilingi yetu kutoka 1600 hadi 2100 ,tukichukua 368+450+500=1318)

Note: 368 Bei ya sasa,450 ongezeko la bei hadi kufika huku na 500 kuporomoka kwa Tsh.

King Kong, ukitafuta bei na uwiano wa hesabu za kushuka kwa crude oil kwa pipa kwa hesabu zako hutaweza kupata. Kwa sababu sote hatuna uwezo wa kujua gharama za kusafisha hayo mafuta, kuyasafirisha kutoka yanakosafishwa hadi yanakonunuliwa. Tanzania hatuagizi mafuta machafu. Tunanunua yaliyosafishwa na bei zake ndizo tumekuwa tukijadili hapa.

Kwenye bei za ndani, kuna suala la kodi, transport nk.

 

[zugimlole]

Kaharufu ka rushwa kwa mbaali

 

[Averoes]

Petrol prices in the US drop to TEN PENCE a litre… but could UK feel the benefit?

Hiyo ni bei kwenye kituo cha mafuta sio bei ya jumla na Marekani wana agiza crude private sector na refineries si za serikali tena tax yao iko juu ila wenzetu wanaushindani wa kibiashara.

Mafuta Tz wanapitia madalali wengi. Speculators nao wanaongeza bei.
Isitoshe wanatoza kodi kali ya nini wakati Tiper imekufa na Tz hakuna uzalishaji wa local product unaohitaji kuilindwa kwa kutumia kodi kubwa ili kudhibiti uingizaji (imports)

 

[adolay]

Petrol prices in the US drop to TEN PENCE a litre… but could UK feel the benefit?
MOTORISTS in parts of the US are enjoying rock-bottom petrol prices – leaving UK drivers fuming that the same savings are impossible here.
By SELINA SYKES & KIERAN CORCORAN
21:26, Sat, Jan 23, 2016 | UPDATED: 21:42, Sat, Jan 23, 2016

13

GETTY • TWITTER

US drivers have benefited from a drop in petrol prices
Petrol prices have been slashed in the past few days across the US, with some stations entering a price war to draw in a frenzy customers rushing to take advantage of the price drop.

The lowest price was recorded at a petrol station in Michigan, where a gallon cost just 32p - or 10p a litre. Other stations boasted prices of 33p a gallon.

Stations in Michigan were the first in the country to see prices plummet to under $1 (70p) a gallon in years, according to petrol prices verifier Gas Buddy.

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The dip in fuel prices comes after the US and the European Union (EU) lifted sanctions against Iran, a major oil producer.

The move could see Iran export as many as an additional 500,000 barrels a day.

GETTY

Petrol prices have slightly dropped in the UK
There is a snowball’s chance in hell that such a turf price war will ever take place in the UK

Howard Cox

However, the drivers in the UK are unlikely to benefit from the drastic drop in petrol prices across the pond.

Howard Cox, founder of the FairFuelUK Campaign, said the rock-bottom prices in the US are “economically mind-boggling for the UK motorist to grasp or experience”.

Mr Cox, who is campaigning for UK motorists to see a 3p cut in fuel duty, said drivers in Britain would never see such low petrol prices as “UK retailers are constrained by high taxation, fuel supply chain price control and supermarket dominance”.

He added: “There is a snowball’s chance in hell that such a Michigan turf price war will ever take place in the UK.”

“Until there is real clarity in the pricing process at the pumps, consumers will never benefit fairly from raw commodity market changes.

“The Government seems disinclined to look at this issue seriously and disingenuously hide their largest fuel taxation rip off regimen in any EU state by bragging about falling oil prices benefitting consumers.”

The UK has seen cuts in diesel prices at petrol stations as oil prices continue to fall to its cheapest since 2009.

Asda, Morrisons and Tesco have cut the price of diesel at their petrol stations to 97.7p a litre.

GETTY

The dip in fuel prices comes after the US and the European Union (EU) lifted sanctions against Iran
The average price of petrol in the UK is around £1.02 a litre and about £1.06 a litre for diesel.

While diesel drivers have rushed to take advantage of the price drop, experts have said prices should be falling even faster.

RAC fuel spokesman Simon Williams said: “We would have liked to have seen a cut sooner, and one that goes further, to more closely reflect the price retailers have been buying diesel for, but this is nevertheless good news for motorists".

 

[King Kong III]

King Kong, ukitafuta bei na uwiano wa hesabu za kushuka kwa crude oil kwa pipa kwa hesabu zako hutaweza kupata. Kwa sababu sote hatuna uwezo wa kujua gharama za kusafisha hayo mafuta, kuyasafirisha kutoka yanakosafishwa hadi yanakonunuliwa. Tanzania hatuagizi mafuta machafu. Tunanunua yaliyosafishwa na bei zake ndizo tumekuwa tukijadili hapa.

Kwenye bei za ndani, kuna suala la kodi, transport nk.

Mkuu nimeeleza kilayman ili kila mtu aelewe naona still imekuwa ngumu kueleweka ngoja nitoe mfano simple kabisa kwa mfano mimi mfanyabiashara wa machungwa sokoni chungwa nanunua Tsh 140 mie naenda kuuza kwa Tsh 200 hapo naweka cha juu Tsh 60 ambao itacover gharama za usafiri,ubebaji,kulipia banda,kodi ya jiji na mie kupata kijifaida hata Tsh 10 katika hiyo 60 Na 50 itacover vitakataka vyote.

Baada ya mwaka bei ya chungwa ikashuka sokoni chungwa likawa linauzwa Tsh 28,Je nitaendelea tu kuuza kwa 200 wakati chungwa linauzwa 28? Ndio maana kwa kuwa mwanzo nilikuwa naongeza 60 kucover vijigharama kwa kutumia formula hiyo hiyo nitaongeza Tsh 60 ile ile kwahiyo nitauza kwa Tsh 88 na mie nikapata faida ile ile nliyokuwa napata likiuzwa 140.

Nimepiga kwenye crude hili uone hiyo difference mwanzo mlikuwa mnanunua crude kwa 1840 mnasafirisha,mnasafisha,mnalipia uchafu wote wa kodi na kutuuzia huku kwenye sheli(vituo vya mafuta) kwa 2300 kipindi hiko dollar 1600Tsh hapo inamaanisha matakataka yote hayo including faida ni nyongeza ya 450 hadi 500.

Pipa limeshuka kwahiyo crude sasa mnanunua kwa 368 kwakuwa gharama za matakata yote including usafiri+usafirishaji+kodi za serikali+faida yenu ni range ya 450 hadi 500 kwahiyo tutaijumlisha vile vile hapo,pili dollar imepanda hadi 2100 kwahiyo kuna ongezeko la 500 hapo.

Pumping Price=368+450+500=1318.

Nadhani nimeeleweka na ndio hivyo hivyo hata ukinunua samaki wabichi utaenda kununua kuni utsnunua mafuta ya kukaangia utanunua chumvi pilipili ndimu na mifuko ya kufungia at the end gharama uliyonunulia wakati akiwa mbichi utaxiongeza ukiuuza kakaangwa.Kama mbichi unanunua 500 ukimkaanga utamuuza 1000 na sokoni wakipunguza wakiuza 300 nikimkaanga nitauza 800 kwasababu gharama za kumkaanga hadi kumfikia mlaji ni constant 500........Ewura na hao waagizaji wa jumla na viongozi warafi ni wezi wanawaibia wananchi.

 

[Averoes]

Oil Subsidy: At N65 per liter, Nigeria Makes N33.50 Profit Per Liter

Hii itakuonyesha vipi bei za mafuta yaliyosafishwa zinapangwa
Ni mfano mzuri huu wa Nigeria amabao wao wanachimba wenyewe crude na bado utakuta mafuta bei ghali kuliko USA
Hata hivyo USA refineries zake ni huge na nyingi ila ushandi wa biashara ya big corps ndio unasaidia kushusha bei ndio maana Magari ya Marekani yanaitwa kiutani Guzlers
Mimi hii issue ni mweledi nayo miaka 20 katika hii industry for the last 24 years. Msidanganye watu ondoeni mtu wa kati acheni soko huria wekeni kodi isomuumiza mlaji period. Itakuwaje mafuta rahisi Ruwanda lakini Kigoma yawe ghali maradufu.

 

[Dengue]

Hili suala la bei ya mafuta naona ni kizungumkuti tu.

Bei ya Dar ni kubwa kuliko Tanga sijui vigezo gabi vimezingatiwa maana sehemu zote mafuta yanashushwa.

 

[Averoes]

Sababu Tanga importer yupo hapo hapo Tanga na bei zake powa

 

[Mkoroshokigoli]

MKuu Mkoroshokigori,

msikubali kudanganywa kirahisi. Nenda hapa Pump Prices

utapata bei za mafuta Kenya. Ukiona uvivu, Nairobi lita ya Petroli ni sh. za Kenya 88, ambazo hapa ni sawa na sh 1, 885. Mbona tunadanganywa kirahisi hivi na taarifa zote ziko mtandaoni?

So mbaya wetu ni Kodi kubwa sasa sio EWURA?

 

[adolay]

Mkuu Averoes

.....many thanks kujazia nyama za mjada huu

Oil Subsidy: At N65 per liter, Nigeria Makes N33.50 Profit Per Liter
The prices of petroleum products in Nigeria have been a source of contention and controversy. This paper proposes to clarify the actual total cost by adding the costs of all components in retail supply of Premium Motor Spirit (PMS aka Petrol or Gasoline) the most widely demanded and utilized petroleum product.
BACKGROUND

The prices of petroleum products in Nigeria have been a source of contention and controversy. This paper proposes to clarify the actual total cost by adding the costs of all components in retail supply of Premium Motor Spirit (PMS aka Petrol or Gasoline) the most widely demanded and utilized petroleum product. The cost components are finding, developing, producing, refining, distributing and marketing. The amount of subsidy on the retail price is then determined by the difference between the actual cost and the retail price.

The method adopted for this cost determination is similar to that used by the American Petroleum Institute (API) for the analysis of the actual total cost of gasoline (PMS) in the U.S. It splits the retail cost into the major components: cost of crude oil, the cost of refining and marketing and the sum of all taxes. This method is simple and accurate.

The most accurate industry data has been obtained from and confirmed independently for this effort by industry experts. The draft paper was also reviewed and endorsed by several other experts. The data and analysis herein are as at October, 2005. Exchange rate applied is N130/USD.

THE PETROL PROCESS

To purchase petrol in Nigeria, we typically drive to a Fuel Station. The fuel attendant pumps the requested quantity and payment is made in cash, electronically (Value card, Top card, etc.) or otherwise. The Fuel station typically receives its supply from road tankers which have been loaded at an NNPC or other fuel depots. The NNPC depots receive their supply from local refineries through pipelines. Imported petroleum products are evacuated from ocean-going tankers to local depots which then supply to Fuel stations by road tankers.

Local refineries receive their feed Crude oil through pipelines from oil terminals. The Crude oil is produced by oil companies from wells in their OMLs (Oil Mining Lease). The Federal Government of Nigeria (FGN) is the senior partner in Joint Ventrure (JV) oil producing companies. The NNPC manages FGN investments in the JVs. Production Sharing Contracts (PSCs) are a different relationship from Joint Ventures. This determination is based on JV production which represents most of the Nigerian production. PSC production can be similarly treated.

COMPONENT COSTS Crude oil is first discovered (Exploration), then the discovery is developed (Field Development) before it can be produced (Production Operations). It is then refined into petroleum products which are distributed and sold for utilization. The costs of Exploration, Field Development, Production Operations, Refining, Distribution and Marketing (Retail sales) are identified herein. The sum of all product cost components is the actual cost of the product.

EXPLORATION COSTS

Exploration costs typically include seismic acquisition and interpretation costs. Exploratory well costs can be included in development costs since the exploratory well can be easily converted to a development well. 3D Siesmic acquisition costs vary based on contractor, coverage, terrain, time, season, water depth, methods, commercial terms, special considerations, etc. Typical costs range from 20 – 70,000 USD/KM2. Interpretation costs range typically from 2-8,000 USD/KM2. We will use 50,000 USD/KM2 as estimated cost of 3D seismic acquisition and interpretation. For a 10 KM2 field with 20 Million barrels recovery; exploration costs can be estimated to be about: – 0.025 USD/Bbl. This is equivalent to, 0.02 N/Litre.

DEVELOPMENT COSTS

Opportunity development costs depend on field location, size, development philosophy and concept. Development cost will include capital costs of field facilities design, procurement, transportation, installation and commissioning. Cost of wells and pipelines to existing terminals are also included. It will typically vary from 2-5 USD/Bbl.

At the NAPE (National Association of Petroleum Explorationists) annual conference in 2005, offshore development costs was indicated as 5 USD/Bbl. However, historical data for completed projects offshore are closer to 3 USD/Bbl. Onshore development costs are also significantly lower than offshore costs. To averagely represent the entire JV operational environment scenarios (offshore and onshore) this paper will capture development cost as: – 4 USD/Bbl. This is equivalent to, 3.27 N/Litre.

OPERATION COSTS (OPEX)

Current (2005) production operation costs of major oil companies surveyed indicated a range of 1.5-4 USD/Bbl. This includes all overhead costs across relevant functions. This paper will capture OPEX as: – 3.0 USD/Bbl. This is equivalent to, 2.45 N/Litre.

Therefore, actual crude oil production cost to the Nigerian JV can then be estimated as:

(0.025 + 4.0 + 3.0) USD/Bbl = 7.025 USD/Bbl.

(0.02 + 3.27 + 2.45) N/Litre = 5.74 N/Litre.

Previous government (NNPC) estimates (1994 – ’98) yielded 5 USD/Bbl. The difference in these estimates can be attributed to rising oil industry service costs due to international market dynamics, inflation and/or to estimate basis differences.

For typical refinery yield of 95%; 5.74 N/Litre translates to – 6.04 N/Litre.

This compensates for volume losses inherent in the crude oil refining process.

REFINING COSTS

Installed refining capacity in Nigeria stands at 445,000 Barrels per day (BPD).

This is made up of:

1. Old Port Harcourt Refinery – 60,000 BPD

2. New Port Harcourt Refinery – 150,000 BPD

3. Warri Refinery – 125,000 BPD (Upgraded from 100)

4. Kaduna Refinery – 110,000 BPD (Two trains, 60+50)

Refining cost data from these refineries could not be obtained during our survey. Even when such data is available, they are very unreliable. According to the Nigerian Vice-President during an interview with Thisday newspaper in August 2005, “We have never got correct statistics from NNPC. They will never be able to tell you the correct thing. We have that problem with NNPC”.

To estimate refining costs, we can rely on international industry data from similar refineries. Contemporary refining technology is of the Fluid Catalytic Cracking (FCC) process like most Nigerian refineries. This process requires fluidizing the solid catalyst and re-circulating it continuously from the reaction section of the cracker to the catalyst regeneration section and back to the reaction section.

Data published by the American Petroleum Institute (API) estimates Gross Refining and Distribution/Marketing Costs and Profits at $1.00 per Gallon in October 2005. Using a 50/50 split as established by historical U.S. cost trends, it can be clearly concluded that Refining costs and Profits, account for $0.50 per Gallon. This value includes the profits of the refineries.

The estimate can be used for this determination since it is from mostly FCC process based refineries just as most Nigerian refineries. Actual refining costs may be lower in Nigeria since labour costs are significantly lower in Nigeria. $0.50 per Gallon translates to $21/Bbl. We will capture refining costs as $21/Bbl. This is, 17.17 N/Litre.

DISTRIBUTION COSTS

Distribution costs in Nigeria are established by regulation. This is the cost margin allowed for Road Tankers that transport Petrol from the Depots to the Fuel Stations. As at Oct. 2005, it was, 2.42 N/Litre.

MARKETING COSTS

Marketing Costs in Nigeria are also established by regulation. This is the cost margin allowed for Oil marketing companies that operate Fuel Retail Stations. As at Oct. 2005, it was, 5.87 N/Litre.

TOTAL COST

The total cost can then be determined as the summation of all relevant cost components previously estimated viz., Exploration, Development, Production Operations, Refining, Distribution and Marketing.

Total Cost = (6.04 + 17.17 + 2.42 + 5.87) N/Litre.

= 31.50 N/Litre

Therefore, we can conclude that the Average cost of the Petrol dispensed at retail Fuel Stations in Nigeria is, 31.50 N/Litre.

CURRENT RETAIL PRICE

Current retail Price as established by regulation has been, N65/Liter since 2005. This regulated price is split to cost components in line with the following benchmarks;

56.71 – Depot Price.

2.42 – Transportation Margin.

1.15 – Dealer’s Margin.

4.72 – Marketing Company Margin.

65.00 Retail Price.



SUBSIDY



Subsidy can be determined as Actual Cost – Sale Price.

Consequently,

Subsidy = (31.50 – 65) N/Litre. =-33.50N/Litre

CONCLUSION

We can confidently conclude that government makes a profit of 33.50 N/Litre on PMS (Petrol) at the current price of 65 N/Litre. This translates to a very high 106% profit per litre.

In addition the government benefits from royalties, taxes and fees which were not factored in this simplified analysis. When factored, the actual crude cost per barrel to government is significantly less and its profit correspondingly higher.

The claim of subsidies on petroleum products is clearly incorrect.

POST SCRIPT

This analysis has been deliberately simplified to ensure wider appeal and easy comprehension. A much more detailed and rigorous analysis will be inappropriate for the objective indicated. It will also come to the same conclusion and have only an added academic value.

For imported Petrol, this estimate will not apply.

Imported Petrol has unnecessary additional costs like;

1. International Crude Oil Sale Price and Profit Margins.

2. Transportation Costs of Products from source Country to Nigeria.

3. Port Charges, Taxes and Export duties at source Country.

4. Insurance costs for transportation.

5. Brokerage costs for agents.

To improve domestic supply and reduce cost, the following can be considered;

– Maximize existing local refining capacity utilization.

– Increase existing local refining capacity by building additional refineries.

– Improve JV crude oil development and production efficiency to reduce costs.

C SUPA 2006.

References;

> Offshore Engineering Operations Overview, JM Campbell and Company.

> Nigerian Association of Petroleum Explorationists (NAPE), 2005 Annual Conference Proceedings.

> API Statistics: U.S. Pump Price Update – Oct. 3, 2005, API Website.

> National Petroleum News, Vol. 96, No. 6, June 2004.

> Thisday Newspapers, August 22, 2005.

> Petroleum Marketing Monthly, June 2004, Energy Information Administration.

> Behind the bottom line, Energy Information Administration, June 2006.

SUPA Paper number: TP01-626.

–

Source: SupaNigeria.Org



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