The price of crude oil rose further Thursday exceeding $68 per barrel, its highest since May 2015, supported by unrest in Iran and raising concern about risks to supplies, cold weather in the United States boosting demand, and output cuts led by the Organisation of Petroleum Exporting Countries (OPEC).
The development, which will increase the Nigerian governments oil revenues to fund the 2018 budget, will however, hurt the countrys finances via petrol imports and mounting demands by oil marketers for subsidy payments. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu told THISDAY in a recent interview that the recent petrol scarcity in the country originated from the high cost of crude oil in the international market, saying that while the country wants more revenues from its crude, it is difficult for petrol to be delivered at the fixed price of N145 a litre at the same time.
This is just as he informed the Senate Thursday that the ad hoc presidential committee on petrol scarcity that has been mandated with determining the feasibility of retaining the pump price of petrol at N145 per liter and may explore a plural pricing model. Reuters reported that six days of anti-government protests in Iran, OPECs third-largest producer, have added a geopolitical risk premium to oil prices.
The unrest has not, however, affected production or exports from Iran. Brent crude, the international benchmark, went up to $68.27 per barrel yesterday before coming down to $67.90 a barrel. U.S. crude also rose to $61.86 and also touched the highest since May 2015. Freezing weather in the U.S. has spurred short-term demand, especially for heating oil. Apart from the spike in May 2015, oil is trading at its highest since December 2014 the month after a historic decision by OPEC to stop cutting output to prop up prices deepened a price collapse.
(ThisDay)
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