Nigeria May Face Higher petrol Price Due to Global Crude Oil Prices Increase

Brent crude oil prices climbed to $95.06 per barrel as of 5:36 AM on Tuesday, September 19, setting a significant milestone for the year 2023, according to a report from Oil Price.
The remarkable upswing in oil prices can be attributed to multiple factors, including supply constraints imposed by Saudi Arabia and Russia, who have decided to limit their crude oil production until the end of 2023.
Their decision, subject to monthly reviews, has contributed to a tightening of global oil supplies.
Furthermore, China’s economy is displaying signs of recovery from its previous downturn, thanks to government-led economic stimulus efforts.
Experts anticipate this resurgence will lead to increased oil demand in China, thus driving up global crude oil prices.
In an unpredictable market environment, the Nigerian crude Qua Iboe benchmark experienced a surge to $100 per barrel on Monday but dipped slightly to $98.33 per barrel on Tuesday.
Meanwhile, West Texas Intermediate maintained its position at $92.41 per barrel, indicating a fluctuating yet robust oil market.
While the International Energy Agency (IEA) has predicted that the zenith of oil demand is nearing, the Organization of Petroleum Exporting Countries (OPEC) has contested this prognosis.
Adding a global perspective, Amin Nasser, President and Chief Executive Officer of Saudi Aramco, emphasized the risks associated with swiftly phasing out conventional energy sources during his address at the World Petroleum Congress in Alberta, Canada.
He advocated a cautious transition and emphasized the importance of technology for capturing carbon emissions, calling for concerted efforts by governments and corporations.
However, the Nigerian oil industry grapples with the persistent challenge of crude oil theft, hindering its ability to fully capitalize on the recent surge in global crude prices.
August 2023 production figures, standing at 1.1 million barrels per day (excluding condensate production), underscore the severity of this issue.
On the domestic front, Nigerians may face the prospect of higher petrol prices if the current rally in global crude prices persists.
Unfortunately, viable alternatives like compressed natural gas (CNG), recently approved by the Tinubu administration, won’t be available until 2024.
Additionally, the much-anticipated rehabilitation of local refineries in Port Harcourt, Kaduna, and Warri is scheduled for 2024, while the Dangote refinery’s operations, initially expected in July-August, remain pending.
As a result, should the rally persist and marketers adjust petrol prices in response to market dynamics, Nigerian consumers may find themselves in an unfavorable position with limited options for relief.
Strategic foresight and proactive measures will be crucial to navigate this volatile market landscape effectively.

Source: allnewsng.com

EntekHub.com

All Author Posts