Nigeria Not Benefitting From Rising Global Oil Prices
…….NNPC boss blames crude oil theft
Analysts have posited that Nigeria is evidently a victim of its oil resources, losing outrightly from the rising oil prices of above US$100 per barrel since the recent regime of rising global oil prices.
A report by the analysts of Proshare said Nigeria has failed to implement reforms that could make it optimise rising oil prices.
According the recent report, the Russia-Ukraine war coupled with the growing rate of oil theft, pipeline vandalism, kidnapping and other forms of insecurity have exacerbated the Nigerian situation.
They observed that going by Nigeria’s high-priced bonny light which presently sells for as much as $127 per barrel in the international market; a price which could have impacted Nigeria’s economy positively and reduced borrowing, the country is rather witnessing falling revenue due to a number of factors.
The factors include oil theft, rusty infrastructure, diversion of crude oil sales, and deceptive computation of oil sales by the Nigerian National Petroleum Company (NNPC), the report said.
On the contrary, “a large chunk of the country’s revenue remains impeded by subsidy, oil theft and other supply disruptions with little remittance to the Federation Account,” The Proshare analysts said.
They expressed the opinion that the situation would persist given the delayed implementation of the recently enacted Petroleum Industry Act (PIA).
At the a public forum recently, the group managing director of NNPC, Mele Kyari, blamed oil theft for the low effect of the Petroleum Industry Act on the industry, lamenting that it was now scaring investors away from Nigeria.
He said, “No doubt, it is a very difficult circumstance for the industry and that is why despite the good intentions and the provisions of the PIA, no one will produce oil and recover zero, and still put money back into the business. That is why investments are very weak despite the good fiscal environment that PIA has brought.
“If I have the privilege to answer questions around our investment climate on international platforms, they ask me, ‘We will bring our money, how are you sure they will not steal the oil?’ It is very difficult to give a very straight answer. Of course, with what we are doing now, we will contain it and we will bring back stability,” Kyari said.