Nigeria currently makes a $3 profit for every barrel of crude oil it sells! This shocking revelation came yesterday when the leadership of Nigerian National Petroleum Corporation NNPC) was invited by the National Assembly to explain the high cost of producing oil in Nigeria, The Sun reports.
Nigeria’s crude oil is currently produced at $21.2 per barrel and sells at $25 per barrel. Senators pointed out that in other oil economies, the cost of producing oil is less than $10. Senator Adeola said that the production cost of oil Saudi Arabia is $4 per barrel and $3 per barrel in Russia.
Source: The Motley Fool
In response, the NNPC alleged security and other administrative issues as to why the cost of producing oil is this high in Nigeria. But the senators disagreed. They said security challenges are a common thing in all oil-producing economies. NNPC cannot claim that security challenges are a peculiar problem in Nigeria.
James Manager reacted by saying, “Even the reason that he gave for the high cost of production per barrel I think they are not tenable because wherever oil is produced they have their own security challenge including even Saudi Arabia, Iran Russia, they have their own unique security issues how is our own so peculiar that our cost of production is up to $21 per barrel.
“You also mentioned administrative issue, which are those administrative issues why are we different from the rest of the world. These are issues that the national assembly are supposed to take up.”
Source: Miyetti Law
This is truly a sad reality. Making $3 for every barrel of oil is extremely horrifying. How is this sustainable for Nigeria at a time like this? In agreement with the senators, the reasons adduced by NNPC are not convincing by any stretch of the imagination.
NNPC has become a symbol of bureaucratic corruption in Nigeria for decades. In many instances, the government has had to bail the corporation out. But compared with its counterparts in other countries such as Saudi’s Aramco, the NNPC is meant to make more revenue for us.
Source: The Guardian Nigeria
If other countries produce their oil amt far cheaper prices, what is the problem with Nigeria? Is our crude any different from others? Do we need special processes? These are issues worth investigating for the good of the Nigerian economy.
SOURCE: ooeranews
