Connect with us


Headache for Nigeria as oil sells above $85 per barrel



What should have been good news for Nigeria is set to be a fiscal headache as the international benchmark for oil prices surged above $85 per barrel on Wednesday.

Data obtained from Reuters showed Brent crude sold for $85.04 a barrel yesterday and the United States West Texas Intermediate (WTI) crude futures were up to $82.90.

Wednesday’s performance was a two-month high and there was a flurry of projections that oil price could hit $90 and $100 a barrel this year.

But the news of higher oil prices would not come as cheering news for Nigeria.

Ordinarily, an increase in oil price should mean more foreign exchange from the sale of crude, but production challenges mean not much gain is expected.

Since Nigeria imports its fuel for domestic consumption to keep pump prices in the country low the cost of subsidy on the other hand is set to increase.

Read also: Nigeria, Libya, others’ production struggles push oil price closer to $80

In the eight 8 months of 2021, oil production in Nigeria averaged 1.52 million barrels per day compared to the budget of 1.86mpbd and the capacity of over 2mpbd.

This difficulty means Nigerian oil revenue was N754.2 billion, 43.7% or 586.52bn less than N1.34bn target in the 2021 budget.

Meanwhile data from the Nigerian National Petroleum Corporation showed that in 11 months of 2021, subsidy payment surged to N1.15 trillion.

Join the conversation


Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now