NIGERIA has again failed to meet the Organisation of Petroleum Exporting Countries (OPEC) crude oil production quota of 1.826 million barrels per day (bpd), as it produced a paltry 927,000 bpd in August, as revealed by OPEC in its September report.
The country’s inability in recent times to meet OPEC’s alloted quota has seen it resorting to borrowing to fund its budget deficit, since it largely depends on crude oil sale proceeds for its budget benchmark.
The OPEC report in July showed that Nigeria recorded an average of 1.183 million barrels per day in its oil production for that month.
The slump in the production quota came at a time when OPEC and its allies (OPEC+) have increased Nigeria’s oil output quota to 1.830 million barrels per day, with effect from September 2022.
Some economists have emphasised how unhealthy the development is for the economy since Nigeria largely depends on crude oil sales for its budget fundings.
“If the price of crude oil tanks, or when the production is low, and there is oil theft, it affects the economy. It puts our books off balance and puts us in debts. All these things intertwined and push up inflationary pressure on the economy,” a former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Muoghalu, said.
Another economist, Kalu Aja, expressed worry over Nigeria’s inability to gain from rising oil prices.
“Nigeria is the only country not benefiting from this oil boom, no thanks to oil theft. Something needs to be done urgently,” Aja said.
The oil production plunge to 972,000 barrels per day in August has seen Angola and Libya overtake Nigeria by producing higher volumes of crude oil during the review month, OPEC noted.
Furthermore, the organisation stated that the drop made Angola and Libya to overtake Nigeria in oil output.
“Crude oil output increased mainly in Libya and Saudi Arabia, while production declined in Nigeria,” OPEC reported.
Angola was Africa’s highest producer for the month under review with an average production of 1.18 million barrels per day.
Libya’s production averaged 1.12 million barrels per day for the month.
“According to secondary sources, total OPEC-13 crude oil production averaged 29.65 mb/d in August, higher by 618,000 month-on-month,” the OPEC report stated.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.