NNPC Fixes Base Oil Price at $57 for 2022 and $61 for 2023

The Nigerian National Petroleum Corporation (NNPC) on Wednesday projected a medium term base crude oil price scenario of $57 to a barrel for 2022; $61 for 2023 and $62 for 2024.

The Group Managing Director of the corporation, Mallam Mele Kyari, made the disclosure in his presentation to the House of Representatives, according to a statement released by the corporation’s spokesman, Mr. Garba Muhammad.

Kyari explained that the assumptions were arrived at after a careful appraisal of the three-year historical dated Brent oil price average of $59.07 per barrel premised on Platts spot prices.

“Price growth is to be moderated by the lingering concerns over COVID-19, increased energy efficiency, switching due to increased utilisation of gas and alternatives for electricity generation. These are reflected in the medium term revenue framework,’’ Kyari informed.

On the perennial issue of smuggling of petroleum products, Kyari implored the National Assembly to come to the aid of the corporation in battling the menace.

He noted that the NNPC, based on the directive of the president had mobilised some customs officers, the Economic and Financial Crimes Commission (EFCC), the police as well as the Nigeria Security and Civil Defence Corps (NSCDC) to find workable solutions to the menace.

Also speaking on the propriety of establishing NNPC retail stations in neighbouring countries to curb the challenge of illegal haulage of petroleum products across the border, Kyari said though the NNPC once considered the option, it had to jettison the idea when it became imperative that the measure would be counterproductive.

He explained that smugglers are not looking for officially priced petroleum products. To this end, he said going ahead to establish NNPC retail stations would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but carry out under the counter deals.

The NNPC GMD also took time to provide detailed explanation on the corporation’s equity shareholding interest in Dangote Refinery, reiterating that the package which was at the instance of NNPC was designed to guarantee national energy security.

He stated that the equity interest was secured after due consideration of the national interest and best possible options.

“We will have a right to 20 per cent of production from this facility. We structured our equity participation on the basis that the refinery must buy at least 300,000 barrels of crude oil per day of our production. This guarantees our market at a period when every country is struggling to find market for their crude oil,’’ he explained.

The release further quoted the Chairman of the House Committee on Finance, Abiodun Faleke, as expressing satisfaction with the insider perspective on some issues surrounding the operations of the NNPC and the oil industry.

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

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