THERE were fresh concerns as the price of Nigeria’s crude oil dropped to $72 per barrel, yesterday, from $75 per barrel, indicating a shortfall of 8.2 per cent against the $77.96 per barrel reference price of Nigeria’s 2024 budget.
Checks by Vanguard indicated that the price of Bonny Light and other crudes dropped significantly because of Israel’s limited reaction to Iran’s missile attack, earlier expected to do serious damage to oil supply and prices.
This is even as the Organisation of Petroleum Exporting Countries, OPEC, said Nigeria’s oil output, excluding condensate dropped to 1.324 million barrels per day, bpd in September 2024, from 1.352 million bpd in August, 2024, indicating a decrease of 2 per cent.
Similarly, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said Nigeria’s oil output, including condensate, declined to 1.544 million barrels per day (bpd) in September 2024, down from 1.570 million bpd in August 2024, reflecting a month-on-month, MoM decline of a 1.7 per cent.
This means that Nigeria suffered shortfall in both price and output, a development many experts felt Nigeria would be unable to meet its 2024 budget projections.
We should not be over-depending on oil -OGSPAN
Reacting, the National President of Oil and Gas Services Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said after many decades of producing oil and gas, Nigeria should have used its petroleum proceeds to develop the non-oil sector of the nation’s economy.
In an interview with Vanguard, yesterday, he said: “The nation have been producing oil and gas since the 1950s. We have been over-depending on oil and gas instead of using them as a means to developing other sectors of the economy. It is very dangerous to put our eggs in one basket.”
Increased investment required — CPPE
On his part, Director/CEO of Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, said: “Obviously, the drop in oil price will affect our revenue, particularly our foreign reserve. This is not a good development for our foreign reserves.
“The question is how much has NNPCL be remitting to the coffer, as the impact may not be shown because there has been little contribution from that end. But I can tell you for certain that there is no crude oil drop that will bring down our energy cost. It is a major variables to the cost of fuel, diesel, Kerosene, gas, etc and not necessarily Nigerians been affected.
“Relating it to the citizens, if energy price drops, the impact will be felt on the citizens positively, when the price goes up the beneficiaries are the government and operators. This does not necessarily trickle down to the common man.
“My advice to shore up operation will be for the government to give incentives to operators or investors, provide investors confidence which has be lost over the years, thereby sending investment and investors out of the country. Also, there is need for clarity in government policies, which is also key in driving the needed investment into the country’s economy.”
However, the Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, said the conclusion of the various divestments of assets by the international Oil Companies, IoCs, would culminate in increased production.
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