The Central Bank of Nigeria (CBN) has said that earnings from oil sales has dropped to N945 billion. CBN stated this in its monthly economic report for January 2022. It would be noted that this drop in oil revenue is despite the rise oil prices than projected in the 2022 budget.
The CBN’s breakdown of Nigeria’s low crude earnings came at a time Saudi Arabia is earning $1 billion daily from oil. According to the CBN’s data, Nigeria earned N945 billion in January, which is 7.8 per cent less than the N1.024 trillion projected for the period. A further breakdown of the components of oil revenue showed that no revenue accrued from crude oil and gas exports in January, the second straight month government has earned nothing from such a major income source.
The data showed that Nigerian economy was more likely to suffer losses as oil prices soar It added that no money was recorded for oil and gas exports, saying that the Nigerian National Petroleum Company Limited (NNPCL) had not remitted funds to the federation account in recent months due to rising petrol subsidy claims on the back of elevated crude oil prices as well as lower oil production. Revenue from petroleum profit tax and royalties, which formed the bulk of oil revenue, declined by 31 per cent to N247 billion, compared with N360 billion the previous month and was also below the monthly target of N277 billion.
Meanwhile, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, has said that the dip in oil revenue did not come to him as a surprise. He noted that any country paying so much for subsidy should not expect to take full advantage of the galloping price of crude in the international market.
Osatuyi said that by year end, the country may have incurred over N5 trillion in subsidy payment if naira continues to depreciate against dollar He explained: “Incurring such cost is not in the best interest of the country. The best solution to curbing this dip in oil revenue is to remove subsidy, but subsidy cannot be removed now when the country is hot.
There is inflation, life is difficult for the citizens, so, it is very much impossible to remove subsidy now.” Meanwhile, global crude and oil products supplies have remained tight, boosting Asian refiners’ diesel margins to record levels as Western sanctions hamper exports from major producer, Russia.
The CEO of global commodities trader, Trafigura, said that oil prices could soon hit $150 a barrel and go higher this year, with demand destruction likely by the end of the year. Most refineries globally are already running close to capacity to meet rising demand from pandemic recovery and to replace lost Russian supplies. JP Morgan analysts estimate that Russia had cut about 500,000 to 700,000 barrels per day of oil products exports, because it now finds marketing fuel harder than marketing crude.
SOURCE: newtelegraphng.com
