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Nigerian govt loses out as oil price hits $100 for first time in seven years

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Nigeria could save $5bn annually from local refining –Waltersmith

The federal government has expressed sadness that it has failed to take full advantage of rising oil price, while other oil producing countries smiled to the bank on the back of Russia, Ukraine tensions.

In an interview with Bloomberg on Wednesday, the Nigerian Minister of State for Petroleum, Timipre Sylva noted that because the country was not producing enough to meet its OPEC quota it was not gaining much from the oil price rally.

In the early hours of Thursday morning, Brent crude the international benchmark for oil hit $100.07 briefly around 04:46 am before returning to N99.40 as at the time of writing.

Ripples Nigeria has been following the price changes and had reported earlier in the week that oil price is likely to surpass $100 this week.

But sadly, Nigeria is not ready to enjoy the oil windfall and Sylva did not fail to stress the headache facing the country.

He pointed out that with subsidy and production level, the comfortable price range for Nigeria would be between $70-$80 at this point.

His words: “We are not comfortable with very high prices. We would be comfortable with prices between $70 and $80, at this point the tensions are not being created by us that have affected prices.

Read also: Oil price may hit $100 per barrel today

“I don’t know what will get us to change our plans, but we are watching the situation. Right now, things are not really clear for us to now make major decisions because the tension in Europe can just go away tomorrow,

“And now there are discussions going on with Iran. If they have a nuclear deal with Iran, there would be more volume in the market, but for now, it’s best to sit and watch before taking any decisions.”

The minister also assured that Nigeria should be able to meet its OPEC production quota fully later in the year.

“Nigeria is looking for more African sources of funding to improve production capacity, and ensure it meets up with its production quota.

“With the kind of prices we are seeing, we are not happy, we should be back on track later this year,” he stated.

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