Nigeria’s Oil Price Plummets to $72 per Barrel
The global oil price has dropped significantly, with Nigeria’s crude oil selling at $72 per barrel yesterday, down from its previous price of $75 per barrel. This marks an 8.2% decline from the $77.96 per barrel benchmark set in Nigeria’s 2024 budget. This decrease is attributed to the restrained response of Israel to Iran’s missile attack, which initially raised concerns of substantial disruptions to oil supply and pricing.
The Organisation of Petroleum Exporting Countries (OPEC) recently reported that Nigeria’s oil production, excluding condensate, decreased to 1.324 million barrels per day (bpd) in September 2024, a 2% reduction from 1.352 million bpd in August 2024. Similarly, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) noted that Nigeria’s total oil output, including condensate, fell to 1.544 million bpd in September 2024, a 1.7% decline from 1.570 million bpd in August 2024.
This decline in oil prices and production has raised concerns about Nigeria’s ability to meet its budget projections for 2024. As such, oil industry experts and stakeholders are urging the country to diversify its economy and reduce its reliance on oil revenue.
Mazi Colman Obasi, the National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), emphasizes the need for Nigeria to leverage its petroleum revenues to develop other sectors of the economy. He notes that the country has been producing oil for decades, but has not yet fully developed its non-oil economy.
Dr. Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), shared his concerns about the impact of the drop in oil price on Nigeria’s foreign revenue. He suggests that the government should provide incentives to operators and investors, as well as clarity in government policies to drive investment in the country’s economy.
Engr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), noted that the completion of asset divestments by International Oil Companies (IoCs) is expected to increase production and boost the economy.
