Price of Nigeria’s brand of crude hits $80.70 per barrel

The price of Bonny Light, Nigeria’s brand of crude oil, has risen to $80.73 per barrel, from $77.86, barely 24 hours after the Organisation of Petroleum Exporting Countries increased the output quota for its member and non-member nations.

Following the OPEC decision, Nigeria’s oil output allocation would rise to 1.649 million barrels per day (bp/d) in November 2021 from 1.5 mb/d, excluding Condensate.

The latest rise in price means the nation, which had based its 2021 budget on $57 per barrel and 1.8 million barrels per day; mb/d, including Condensate, which it has the capacity to produce between 300,000 – 400,000 bp/d, would generate more funds as excess revenue in the remaining part of 2021.

But some analysts argued that it would be impossible for the nation to meet the new quota in a short term, apparently because of pipeline vandalism and oil theft in the Niger Delta.

Speaking on the development, a former Chairman, Petroleum Technology Association of Nigeria (PETAN), Bank-Anthony Okoroafor, said, “It is a good development for Nigeria as a country with much dependent on income generated from oil. It is achievable, but we need to look at our pipelines very well.

Vandalism is on the rise and this has reduced our production volume.”

Also speaking,  Prof. Wumi Iledare, former President, Nigerian Association of Energy Economics (NAEE), said, “To some extent, it is good news to oil exporters like Nigeria; an increased revenue in the short run if production capacity supports output demand. “Unfortunately, the benefits may be marginal because the costs of import of petroleum products are bound to rise putting pressure on Forex and devaluation of Naira relative to dollars. So it is more of sadness and joy dynamics

“As long as this energy transition to zero carbon is premised on divesting from fossil fuels, crude oil prices would continue to rise to allocate more oil to the future.”