Nigeria gets revenue boost from $68 oil price but finances hurt on continued fuel imports

0
85

Oil prices on Thursday hit their highest in more than two and a half years, touching levels not seen since before a slump in commodity markets in 2014/15, boosted by tensions in key producer Iran and by ongoing OPEC-led output cuts, CNBC/Reuters reports.

U.S. West Texas Intermediate (WTI) crude futures were at $62.16 a barrel at 0752 GMT, up 53 cents, or 0.9 percent, from their last close. They touched $62.21 shortly before, their highest level since May 2015. Brent crude futures – the international benchmark for oil prices – were at $68.23 a barrel, up 39 cents, or 0.9 percent, after revisiting a May 2015 high of $68.27 shortly before.

According to THISDAY, the development, which will increase the Nigerian government’s oil revenues to fund the 2018 budget, will however, hurt the country’s finances via petrol imports and mounting demands by oil marketers for subsidy payments. The 2018 budget was premised on an oil benchmark price of $45 per barrel, with a production estimate of 2.3 million barrels per day, including condensates.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said in a recent interview that the recent petrol scarcity in the country originated from the high cost of crude oil in the international market, adding that while the country wants more revenues from its crude, it is difficult for petrol to be delivered at the fixed price of N145 a litre at the same time.