It is extremely unfortunate. One of the biggest problems in Nigeria right now is that the price of crude oil is rising. You would have expected everyone to be dancing Atilogwu, Owambe, etc. As oil prices hit $130, a BIG problem is breeding in the nation. In short, the budget is looking really bad right now.
“I’m hopeful the prices will move around, maybe $80, maybe $70. We are hoping that it will come down to somewhere around $70 or $80, which will be sustainable for us at the end of the year … I mean, with the kind of prices we are seeing, we are obviously not happy about it,” Minister of State for Petroleum Resources, Timipre Sylva, said last month.
Yes, Nigeria is hoping that oil price does not rise! Why? Subsidies and lack of refineries. If this Russia-Ukraine war continues and oil price continues to go up, many bad things will happen as the government cannot support those fuel subsidies and Labour will go on strike!
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A permanent solution is said to be tied to a working refinery, which is far from reality. Dangote Refinery, which is expected to be launched in July, has become the beacon of hope as NNPC keeps faltering in its attempt to rehabilitate government-owned refineries. A report released by the NNPC in February shows that three national refineries in Warri, Port Harcourt and Kaduna, recorded a combined loss of N11.77 billion in the months of June, July and August 2021.
With no hope yet that the refineries will be rehabilitated soon, NNPC will keep importing petroleum products even as the prices go higher. This means also that the Federation Accounts Allocation Committee (FAAC) revenue will keep diminishing as most of the revenue derived from crude oil sales is used for subsidy and debt servicing. NNPC’s January report to FAAC shows that gross revenue from oil and gas sales was N438.42 billion but only N49.75 billion was remitted to the FAAC account due to deductions for petrol subsidy.
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Does this make any sense to anyone? That those who manage a country can continue to fleece the country by importing aa natural product of the country? Who turned us to this type of country?
How come we are not talking about starting a new refinery and relying on 1 man to help the whole country or am i the only one seeing the various risks we are being driven to take here