Global oil price crash: Operators predict low earnings for Nigeria, cheaper petrol pump price

Amidst crash in global oil prices,  Industry operators are  predicting low earnings for the Federal Government and cheaper  petrol pump price for Nigerian citizens.

According to the former Chairman, Major Energies Markets Association of Nigeria, MEMAN, Mr Adetunji Oyebanji, whenever global oil prices fall, expected earnings from the sector by the Nigerian government are also affected.

However, he said that the plunge in global oil prices meant  cheaper petrol prices for the citizens

“When  global oil prices go down, our earnings go down. But, on the other hand, it means there’s potential for reduction in price of fuel. So, the citizens may be happy.

“On the other hand, the country is suffering. And it means that there’s less dollar. So, by definition, if there’s less dollar, and the demand remains the same, then the price of dollar will go up,” he said.

According to him , the gains expecting from the low price of petrol may be offset by the higher  dollar price

He said: ”it’s a very complicated equation. And, if you say, okay, why don’t they sell the crude in Naira now? You see, the one you are selling, if you make 1.5 million barrels a day, and you have sold a lot of it forward already because you took loan, that means you have less available to sell.

“Let’s assume half of it has been committed, remaining 700,000 barrels a day. The dollar price is falling,  which means your receipt of foreign exchange is also falling.

“So, will it make sense for that 700, 000 to be sold  in Naira when you are already short of dollars?” Oyebanji said.

On the surface,  he said that fall in global oil prices would bring about cheaper petrol price in Nigeria, but lower receipt of dollars to Nigeria.

He assured that oil marketers will  continue to adjust and survive, depending on the situation.

“Everybody will adjust, including the consumers. So, if price reduction comes, they will be happy.

“You expect price to come to N800 per litre, but because of offset of Naira now, you may find that instead of N800, it can only come down to N850. So, everybody will just adjust as they can.”

Crude oil prices have continued their decline this week as market anxieties about a looming global recession intensify

Oil prices plunged last week to $65 per barrel as the United States import tariffs and an unexpected OPEC+ supply hike erased $10 per barrel from global benchmarks.

Crude Oil Refinery Owners Association of Nigeria  said petrol prices will continue to rise despite the crash in crude prices and the reduction in its landing cost.

The group feared that unless the Federal Government continues the naira-for-crude deal, the price of petrol will be on the rise even if the price of crude oil falls to $50 per barrel.

Henry Adigun said the fall in global oil prices was not a big deal because the product is going to be designed.

 “There will be a lot of revenue for us, but for refining, which we should be doing, it’s a good price for refining.

He said there would be a lot of revenue from crude sales, but that it would affect the cost of refining.

On how is going to affect Nigeria ‘s 2025 budget performance, he said:” The government has never put a budget on anything. Why would anybody put a benchmark that’s not based on an average oil price? And even the production quantity, the volume, is also less than 50.

READ ALSO: NSCDC impounds truck with 70,000 stolen petroleum products in Port Harcourt