Thursday, November 20, 2008

The price of oil..

Can anyone explain why, with oil below US$50 per barrel and fuel prices dropping accordingly around the world, the price of petrol is not budging in Nigeria? This article goes in one ear and straight out the other.

Posted by Jeremy at 10:48 pm

3 comments:

Shubby Doo,  11:21 pm  

i was having the very same conversation at work 2day 2...

snazzy,  3:07 pm  

That is the way the subsidy works.

The price of petrol is set at N70 a litre.

When the import price is N100 the government pays N30 as a subsidy.

Now this subsidy costs a lot of money so when the price of petrol falls below the list price the government gets to keep the difference. Which in this case is about N2 - N3

There is a website that tells you what the actual price per litre is, but I don't know it off the top of my head.

I think it is fair because the government ate the cost when oil flew up to $150 so it should recoup some benefit when oil is now at $50.

Latifa,  12:33 pm  

not shockin...I wish I can post the pic of a cartoon I took of the Tribune (i think) that reflects this issue perfectly...

One of the character response to your question was "Don't you know in Nigeria, whatever goes up doesn't come down." I can imagine a lot of Nigerians saying that with indifference. it's a fate they have accepted!

Snazzy's comment is quite enlightening though...cheers snazzy

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