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Nigeria loses N14.9bn daily as oil price crosses $90 for first time in seven years

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Nigeria will be losing over N14.9 billion daily as international oil price crossed above $90 a barrel on Wednesday.

Data from Reuters revealed that Brent, the oil benchmark for Nigerian oil, closed at $90.20 per barrel on Wednesday triggered by potential sanctions on Russia over Ukraine invasion.

It is also expected in the coming days it would be a catalyst for higher crude prices closer to $100.

The rise in oil price is a big missed opportunity for Nigeria with the tenth best oil reserve in the world as it continues to struggle to meet monthly oil production cuts.

OPEC+ quota production quota for Nigeria, which covers only crude oil and not condensates, is put at 1.614 million barrels per day while Nigeria’s production capacity is closer to 2.2 million barrels per day according to Timipre Sylva, Nigeria’s Oil Minister.

Sadly however, in the most recent OPEC report for December 2021, Nigeria reported only 1.2 million barrels b/d production 400,000 daily short of OPEC+ quota allowance.

Doing the mathematics, the 400,000 per day production shortfall could have earned Nigeria based on $90 dollar per day over $36 million daily or N14.9bn at the current exchange rate of N416/$.

Read also: Oil price increase to solve Buhari’s revenue problem, but two factors challenge cashflow

In fact, if the money lying on the table to be taken by NNPC is realized, Nigeria would have comfortably covered the N270bn expected to be paid as monthly subsidy.

During the Federal Executive Council (FEC) on Wednesday, NNPC presented a bill of N3 trillion as what was required for 2022 for subsidy payment for the month of July to December.

The FEC presided over by President Muhammadu Buhari at the presidential villa, Abuja, considered the request and would be writing to the National assembly soon.

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