BRENT, Nigeria’s crude oil equivalent, crossed the 60 dollar per barrel mark in February for the first time since the outbreak of the coronavirus last year. This means more revenue for the nation’s economy but also a possible hike in petrol pump price in the country.

Timipre Sylva, minister of state for petroleum resources, at the official inauguration of the Nigerian Upstream Cost Optimisation Programme (NUCOP) in Abuja recently, said Nigerians should prepare for an increase in the pump price of petrol despite the new fortunes of crude oil in the global oil market.

“Since we are optimising everything, the Nigerian National Petroleum Company, NNPC, needs to also think about the optimisation of product cost because as we all know, oil prices are at 60 dollars per barrel.

“As desirable as this is, it has serious consequences as well on product prices. Today the NNPC is taking a big hit from this as we all know that there is no provision in the budget for subsidy payments,” he said.

In March 2020, the Petroleum Products Pricing Regulatory Agency, PPPRA, announced the removal of subsidy on petrol, stating that the prevailing market dynamics would regulate the pump price of petrol.

Data obtained from the Central Bank of Nigeria (CBN) show that the country’s external reserves gained 700 million dollars from the rebound in global oil prices as the reserves increased from 35.37 billion dollars on December 31, 2020, to 36.43 billion dollars in February.

This means that Nigeria could generate more revenue than its intended target of 2 trillion naira, as the current Brent crude price of 63.5 dollars per barrel (as of 10.01 on February 19) has overshot the 40 dollars per barrel benchmark of the 2021 budget.

However, the minister’s comments raised concerns on why Nigerians should bear the pains of an expected hike in the petrol pump price despite the steady recovery of international crude oil prices.

READ MORE: https://www.icirnigeria.org/why-nigerians-should-anticipate-increase-in-petrols-pump-price-despite-assurances-from-nnpc/

Turning to daily increase to fuel price.

We have seen it all in Nigeria.