Oil Operators predict low earnings for Nigeria, cheaper petrol pump price

Amidst crash in global oil prices, Industry operators are predicting low earnings for the Federal Government and cheaper petrol pump price for Nigerian citizens.

According to the former Chairman, Major Energies Markets Association of Nigeria, MEMAN, Mr Adetunji Oyebanji, whenever global oil prices fall, expected earnings from the sector by the Nigerian government are also affected.
However, he said that the plunge in global oil prices meant cheaper petrol prices for the citizens

“When global oil prices go down, our earnings go down. But, on the other hand, it means there’s potential for reduction in price of fuel. So, the citizens may be happy.

“On the other hand, the country is suffering. And it means that there’s less dollar. So, by definition, if there’s less dollar, and the demand remains the same, then the price of dollar will go up,” he said.
According to him , the gains expecting from the low price of petrol may be offset by the higher dollar price
He said: ”it’s a very complicated equation. And, if you say, okay, why don’t they sell the crude in Naira now? You see, the one you are selling, if you make 1.5 million barrels a day, and you have sold a lot of it forward already because you took loan, that means you have less available to sell.

“Let’s assume half of it has been committed, remaining 700,000 barrels a day. The dollar price is falling, which means your receipt of foreign exchange is also falling.

“So, will it make sense for that 700, 000 to be sold in Naira when you are already short of dollars?” Oyebanji said.

On the surface, he said that fall in global oil prices would bring about cheaper petrol price in Nigeria, but lower receipt of dollars to Nigeria.

Source: tribuneonlineng.com

EntekHub.com

All Author Posts