Why Nigeria records over $5.6bn revenue shortfall despite rising oil prices

0
Why Nigeria records over $5.6bn revenue shortfall despite rising oil prices
Why Nigeria records over $5.6bn revenue shortfall despite rising oil prices

Why Nigeria records over $5.6bn revenue shortfall despite rising oil prices

The largest producer of oil in Africa should be the beneficiaries of the constant price hikes in oil caused by the Russian-Ukraine war. However, Nigeria instead of making a profit has made a loss of $5.6bn in projected revenue from the time prices of oil increased.

On 24th February 2022, when Russia invaded Ukraine,  the price of oil escalated to new heights. Since March, the price of Brent crude oil has been $108 per barrel on average.

On a normal, the increment in the prices of oil should have presented an opportunity for oil-producing countries like Nigeria to earn more foreign exchange and to recoup from the massive losses they encountered when the coronavirus was at its highest. During that time, the prices of oil declined to $23 per barrel.

However, in Nigeria, when there is an increase in oil prices on the international market that is when the woes of the country get triggered.

READ ON:  The best way to do breastfeeding

Also, Nigeria has experienced a shortfall in its oil revenue because of the mismanagement by leaders of the country’s oil resources. The country is at the receiving end of this unpredictable oil market because the leaders lack political will.

It is sad that Nigeria is incurring losses instead of making a profit. This loss can also be attributed to the people who care away almost 30% of the total oil produced in the country.

It was revealed that about 1.35 million barrels or 71 percent of the 1.9 million barrels that are produced in Nigeria. All things being equal, get to the crude oil export terminals due to massive theft and pipeline vandalism.

OIL SUBSIDY

The International Monetary Fund has said that Nigeria should re-evaluate its position on petrol subsidies following the loss incurred as prices increase. The IMF discloses that Nigeria could use 100% of its interest in paying debt by 2026 if there is no monitoring.

READ ON:  LIST OF PROVISIONS FOR BOARDING SCHOOL

The representative of the IMF in Nigeria expressed how sad it is that an oil-producing country is not able to leverage the current global price hike of the oil commodity to build reserves, but rather the country has been confronted by low earnings due to the subsidy on petroleum products.

Nonetheless, he was hopeful that the Dangote Refinery after its completion will reduce fuel importation, thereby cutting down the burden of the subsidy.

Also, for More Interesting Articles, CLICK HERE

RELATED SEARCHES

WhatsApp & Telegram Job Alert

To get daily Job Alerts on Whatsapp, Join Our WhatsApp Group via the link below.

NOTE: PLEASE IF YOU’RE ON ANY OF OUR WHATSAPP GROUPS, DON’T JOIN THIS ONE

CLICK HERE TO JOIN WHATSAPP GROUP

CLICK HERE TO JOIN TELEGRAM CHANNEL

Leave a Reply