Nigeria rejects a cap on its crude oil price
By the AFREEQUE newsroom, based on Punch
Nigeria rejects the idea of selling crude oil to domestic refineries at a capped price, while Middle Eastern producers are offering discounts of up to $37 per barrel. Finance Minister Taiwo Oyedele cites available volumes and the risk to public revenue, Punch reports.
Nigeria's Finance Minister and economic coordinator, Taiwo Oyedele, rejects the idea of selling crude oil at a reduced price to local refineries to bring down petrol prices. He says Nigeria does not have enough production to supply the Dangote refinery and other domestic facilities regularly, Punch reports.
Oyedele also believes that selling below the market price would reduce public revenue. He notes that Nigeria's total crude oil production is not the same as the volume actually available to the government, as some is allocated to other commitments. The “naira-for-crude” mechanism, which allows oil to be paid for in local currency, was supposed to help stabilise supply, he said, but volumes remain insufficient.
The position comes as Middle Eastern producers offer discounts of up to $37 per barrel to retain market share, according to a Kpler report cited by Punch. Iraq has reportedly offered some cargoes at reduced prices, amid rising shipping costs and weaker demand.
The debate follows recent government statements opposing a return to petrol subsidies, including Bola Tinubu’s defence of their removal on 21 October.
