Oil crosses $85, deepens Nigeria’s petrol subsidy pains

Brent crude surged above the $85 per barrel barrier on Monday morning, as expectations of a supply shortage in the coming months and travel restrictions fueled demand.

The global crude benchmark Brent in which Nigeria’s oil is priced opened Monday trade at $85.53 per barrel while the United States West Texas Intermediate (WTI) starts the week at $83.19 per barrel.

This meant Brent has posted a rise of 0.69 per cent when compared to the $84.88 per barrel it closed last week’s trade.

In fact, Monday opening rate puts oil price on track for a ninth consecutive weekly rise.

Read also: Nigeria’s oil production up by 12% in September – OPEC

While this happens Nigeria which is struggling to meet its quota of oil production will have to now stretch its budget for fuel subsidy.

In June when the oil price was around $70 price level Mele Kyari, the group managing director of state oil company, NNPC, put the figure at N150 billion monthly back in June.

This figure has further been pushed as oil now sells for over $80 per barrel.

Already, almost N2 trillion has been spent in the first nine months of this year alone, with analysts projecting it to reach N3 trillion by December if the projected $100 is achieved.

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