Former Vice President, Atiku Abubakar has advocated for the construction of strategic crude oil reserve with massive storage capacity in the bid to protect the country’s economy from global oil hazards.
The demand for crude oil, the mainstay of Nigeria’s economy has gone on all-time low due to the Coronavirus pandemic and this has called for the question on how the country will survive without revenues from the sale of crude oil.
According to Global energy data, more than 50 million barrels of Nigerian crude oil for late April and May 2020 loading were still unsold, while the overhang is forcing down the value of the country’s crude oil.
In the light of this, the Former Vice President, Atiku, in a statement on Tuesday stated that Nigeria will not sell its crude oil at production loss if enough reserves were built.
“The global oil market continues to suffer from the vagaries of the Coronavirus pandemic, as prices continue to crash due to the sudden, massive and unexpected drop in worldwide demand for crude oil.
“It is time for Nigeria to protect her economy from being tossed to and fro by circumstances beyond our control. We must assert our sovereignty, by exerting more influence over the global trade in crude oil, and other features.
“I believe that the time is right for Nigeria to build a strategic crude oil reserve, with massive storage capacity that can hold at least a month’s worth of our OPEC production capacity.
“If we build such an infrastructure, we will not have to sell our crude at a production loss. We will be in a position to stockpile the product in our reserve until such a time as prices improve.
“Indeed, other nations take such measures to protect their economy. North American and European nations have such internal controls to protect almost every sector of their economy – from agriculture, automobile, and even intellectual property. Nigeria cannot be left behind. We must be in business for the best interest of our economy.
“I would also strongly recommend that we discuss with our partners in the Organisation of Petrol Exporting Countries, and obtain a concession, whereby we can defer our daily quota, such that when we undersell, due to a crash in the price of crude oil, we can oversell when the prices stabilize, subject to the condition that we balance out our quota.
The Former Vice President also added that “Nigeria’s oil industry remains more susceptible to outside influences, than to internal control. This measure can flip that, and make our oil industry more stable, even when there is global instability. This will translate to greater economic independence on our part.” He said.
Meanwhile, the COVID-19 pandemic has also impacted on Nigeria’s inflation rate as the National Bureau of Statistics (NBS) says Consumer Price Index (CPI), which measures inflation, increased by 12.26 percent year-on-year in March.
The NBS made this known in its latest report on inflation released on Tuesday.
It explained that the report showed that inflation in March was 0.06 percent points higher than the rate recorded in February, which was 12.20 percent.
The bureau said the lockdown in Abuja, Lagos and Ogun States and various major disruptions in normal economic activities in several states started in April and wouldn’t have had any impact because this report focused on March.
It stated that the increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the headline index.
The NBS added that on a month-on-month basis, the headline index increased by 0.84 per cent in March and this was 0.05 per cent higher than the rate recorded in February, which was 0.79 per cent.
“The percentage change in the average composite CPI for the 12 months period, ending in March over the average CPI for the previous 12 months period was 11.62 per cent showing 0.08 per cent point from 11.54 per cent recorded in February.
“The urban inflation rate increased by 12.93 per cent year on year in March as against 12.85 per cent recorded in February while the rural inflation rate increased by 11.64 per cent in March from 11.61 per cent in February.
“On a month-on-month basis, the urban index rose by 0.88 per cent in March and up by 0.06 point from 0.82 per cent in February while the rural index also rose by 0.80 per cent in March, up by 0.04 points in February which was 0.76 per cent,’’ the NBS stated.
According to the bureau, the highest increase recorded are on fish, vegetables, fruits, oil and fats, bread and cereals, potatoes, yam as well as other tubers.
