Hope rises for Nigeria! Oil price hits $95 – eight-year high

Hope rises for Nigeria! Oil price hits $95 – eight-year high

The lamentation of the President Muhammadu Buhari’s administration may soon come to an end as an elixir appears to be coming to Nigeria’s asphyxiating economy economy with the price of Brent crude oil rising to $95 a barrel for the first time since October 2014.

The development, would surely sound good for the government in the country, which has listed poor price of crude, the country’s money spinner as one of the reasons for the parlous state of the economy. 

The development is a sharp reaction of the world oil industry to the rising tension between Russia and Ukraine, with the US leading a North Atlantic Treaty Organisation (NATO) to play a major role in the buildup.

Brent crude futures, the global oil benchmark, climbed 3.9 percent to $95.1 a barrel, while West Texas Intermediate (WTI) crude futures increased 4.4 percent to $93.79.

During a White House briefing, Jake Sullivan, United States National Security Advisor, said that there were signs of Russian escalation at the Ukraine border and the possibility of an invasion during the Olympics.

“We continue to see signs of Russian escalation, including new forces arriving at the Ukrainian border. As we’ve said before, we are in the window when an invasion could begin at any time,” Sullivan said on Friday, adding that the White House did not claim that Russian leader Vladimir Putin had made a final decision on the matter.

Earlier this week, JPMorgan projected that Brent could easily reach $120 per barrel if Russia invaded Ukraine and the US and other nations sanctioned Russia’s oil and natural gas exports, with many countries, including the US and the United Kingdom urging their citizens to leave Ukraine over Russian invasion fears.

The rise in global crude oil prices should portend an upturn for Nigeria’s revenue — but subsidy payments shortchanged the government, apart from the fact that virtually all the refined products are imported.

In December 2021, subsidy payment gulped N270billion, amounting to N1.43 trillion in annual expense, shrinking revenue accrued to the federation account. The federal government may pay up to N3trillion to cater for subsidy in 2022.

* Source: Whirlwindnews.com.ng

Posted on February, 12 2022

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