Petrol Prices to Surge Above N700 Per Litre as Saudi Araba, Others Cut Oil Productions
- According to reports, there is an impending hike in the prices of petrol in the coming months
- The development is due to oil cuts by Saudi Arabia and other top oil-producing countries
- The situation can also be made worse by the rising prices of crude oil globally
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The ongoing Russian invasion of Ukraine and the cuts in production outputs by Saudi Arabia has resulted in tripling crude oil costs in the past eight weeks.
If extended to September this year, the production cuts could result in a tightening global oil supply.
Source: Getty Images
Rising crude oil prices to cause hike in petrol prices
According to reports, Brent Crude hit an intra-day high of $86.64 on Saturday, August 5, 2023, the highest since mid-April this year.
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The global benchmark oil price increased by almost 2% for the week, gaining 14% in July 2023.
Saudi Arabia, the world’s second-largest oil producer, has successfully reduced crude oil production and announced plans to cut another one million barrels daily from September 2023, akin to their actions in July.
The country has also reduced oil exports by one million barrels daily to support higher oil prices.
These steps align with its Vision 2030 plan to diversify its economy, reduce dependence on oil and create job opportunities.
Russia has contributed to the rise in oil prices by cutting oil production in August.
Energy experts expect further price hikes due to increasing oil demand in the coming months.
Petrol consumption in Nigeria reduces in Nigeria
In Nigeria, fuel challenges are made worse by delays in the Dangote Refinery and non-functional local refineries. However, President Tinubu has promised Port Harcourt refinery will commence production in December 2023.
Reports say since the end of petrol subsidies on May 29, 2023, Nigeria’s petrol consumption has declined, and monthly imports in West Africa increased by 56% in Q2 of 2023.
According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, there is a marked drop in daily petrol consumption which now stands at 46.38 million liters monthly, compared to the 65 million liters consumed pre-subsidy removal.
Per the Nigerian National Petroleum Company Limited (NNPCL), the rising costs at petrol stations are due to market forces highlighting deregulation's effect.
NNPCL Group CEO Mele Kyari said that the market realities may lead to further fluctuations in petrol prices.
The oil swap deal by NNPCL has reportedly resulted in revenue losses, foreign costs, and escalated debts.
Marketers reveal petrol price will reduce by N70/litre as Tinubu fixes date for PH Refinery production
Legit.ng reported that oil marketers say that immediately after local refining of petroleum products is fully operational, the cost of petrol will go down by at least N70 per litre.
Mike Osatuyi, the National Controller of Operations for the Independent Petroleum Marketers Association of Nigeria (IPMAN), said this when recently discussing the benefits of the Nigerian government’s investment in functional refineries.
Osatuyi told journalists that despite contracts for refurbishing the refineries being awarded, it be a good development for the repairs to be finalized soon to reduce the stress and substantial burden of imports on the country.
Source: Legit.ng
