Fresh worries were raised after Nigeria’s crude oil price fell from $75 per barrel to $72 per barrel yesterday, representing an 8.2% deficit compared to the reference price of $77.96 per barrel in the country’s 2024 budget.

According to Vanguard’s checks, Israel’s weak response to Iran’s missile assault, which was initially predicted to seriously harm the oil supply and prices, caused a sharp decline in the price of Bonny Light and other crudes.

This comes as Nigeria’s oil production, excluding condensate, decreased by 2% to 1.324 million barrels per day (bpd) in September 2024 from 1.352 million bpd in August 2024, according to the Organisation of Petroleum Exporting Countries, or OPEC.

Similarly, Nigeria’s oil production, including condensate, decreased to 1.544 million barrels per day (bpd) in September 2024 from 1.570 million bpd in August 2024, according to the Nigerian Upstream Petroleum Regulatory Commission, or NUPRC. This is a 1.7% month-over-month, MoM fall.

Nigeria experienced a price and output deficit as a result, which led many analysts to believe that the country would not be able to reach its 2024 budget predictions.

Our reliance on oil should not be excessive. -OGSPAN

In response, Mazi Colman Obasi, National President of the Oil and Gas Services Providers Association of Nigeria, or OGSPAN, stated that Nigeria ought to have used its petroleum earnings to expand the non-oil sector of the country’s economy following decades of oil and gas production.

He stated Wednesday in an interview with Vanguard: “Since the 1950s, the country has been generating gas and oil. Our over-reliance on oil and gas has prevented us from using these resources to advance other economic areas. Putting all of our eggs in one basket is quite risky.

More funding is needed — CPPE

“Obviously, the drop in oil price will affect our revenue, particularly our foreign reserve,” stated Dr Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise, CPPE. For our foreign reserves, this is not a positive development.

Since there hasn’t been much contribution from that end, the impact could not be evident, therefore the question is how much NNPCL has been sending to the coffer. However, I can assure you that there isn’t a decline in crude oil that will lower our energy costs. It is a significant factor in the price of petrol, diesel, kerosene, fuel, etc., and it does not always effect Nigerians.

The question is how much NNPCL has been contributing to the coffer because the impact could not be clearly seen due to the lack of contributions from that end. I can tell you, though, that a drop in crude oil won’t result in cheaper energy prices. Although it doesn’t always affect Nigerians, it is a major role in the price of fuel, kerosene, diesel, petrol, etc.