There are indications that the Federal Government through the Nigerian National Petroleum Corporation, NNPC would be under more pressure to fund Nigeria’s petrol under-recovery or subsidy as the price of Bonny Light rises to $65 per barrel in May 2021.
This showed an increase of 150 per cent against $26 per barrel recorded in the corresponding period of 2020 when the outbreak of the coronavirus pandemic and low demand for crude oil had resulted in low prices.
However, the current high prices of crudes, and by extension, petrol, is attributed to the re-opening of many economies, the discovery of Coronavirus pandemic vaccines and the efforts of the Organization of Petroleum Exporting Countries, OPEC to achieve market stability.
The 16th OPEC and non-OPEC Ministerial Meeting of the Declaration of Cooperation, DoC, took place via teleconference on Tuesday, April 27, 2021.
At the meeting, Alexander Novak, Deputy Prime Minister of the Russian Federation, had raised hope for increased stability.
At the end of the meeting, OPEC agreed to adjust downwards overall crude oil production and subsequent decisions.
The meeting highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support while noting that the recovery is expected to pick up speed in the second half of the year.
Dr. Bala Zaka, a port Harcourt-based analyst in commenting on the development said the rise in oil price, would now cost more to procure and refine crude oil, meaning that the cost would be transferred to Nigeria as the nation currently imports all its petrol from the global market.