THE price of Bonny Light, Nigeria’s premium oil grade, yesterday, dropped by 5.09 percent to $59.62 per barrel in the global market at the backdrop of the on-going ripples created by the tariff war that has followed the series of tariff hikes announced by the United States of America early this week.
The oil price was also hit by the decision of the Organisation of Petroleum Exporting Countries (OPEC) and its allies to increase oil production by 411,000 barrels per day (bpd) in May, 2025.
Experts said the development would negatively impact the nation’s N54.99 trillion 2025 budget, which is based on oil price of $75 per barrel and 2.06 million barrels per day (bpd).
This indicates a massive setback in terms of price and output as the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, puts the output, including Condensate at 1,671,953 bpd in February 2025.
In an interview with Vanguard, Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, said: “This is a serious problem as we have just completed the first quarter of the year. We have three more quarters to go, meaning that we have serious issues in our hands, if the situation persists.
“It poses a very serious challenge to our economic management team. First, it poses a risk to our revenue. Second, it poses a risk to our exchange rate. Our economy is dependent to foreign exchange earnings. The low oil price would put pressure on foreign exchange earnings. We all know the implications on a weak exchange rate on the economy.”
However, findings by Vanguard indicated that the low crude oil prices may culminate in low prices of petroleum products in the domestic market.
The findings showed that major players in Nigeria’s downstream sector would announce a reduction in the prices of Premium Motor Spirit, PMS, also known as petrol.
In an interview with Energy Vanguard, the Chairman of the Lagos State Chapter of Petroleum Products Retail Outlet Owners Association of Nigeria, PETROAN, Ehimen Joseph, said: “This should be expected in a deregulated market. If the fall in crude oil prices persists for a while, it would impact developments in the value chain.”