Oil price now turns out to $22 per barrel
For, which was a reversal in trend last week of $28 per barrel, yesterday’s crude oil price fallen to $22.46 per barrel in Nigeria’s premium grade, Bonny Light.
Brent and WTI have also lost land on trade to $28,33 and $22,46 in other international classes.
Again, the most recent cut in the Nigerian 2020 budget petroleum price benchmark was underperformed by this latest price.
The worldwide epidemic of coronavirus (COVID-19) has driven down the price of petroleum and pressured the federal government to reduce the benchmark to $30 from $57.
In the meantime, following the international decline of oil prices, the Federal government dropped the price of Premium Motor Spirit (PMS), popularly known as petrol, from the N145 approved model to N125 per litre, via its Ministry of Oil and Petroleum Resources (MPR).
For four consecutive weeks, oil prices have dropped and fell around 60% since the beginning of the year. The crises were also struck at rates of all things ranging from coal to steel, while bond and stock markets join seldom charged regions.
The market has had to deal with the twin shocks of demand crashing triggered by the COVID-19 pandemic and the volatile oil price battle between leading producers Russia and Saudi Arabia, which slashed out supply cuts expected to help stabilize the price earlier this month. Next month is the conclusion of the current production cut contract.
As a quick answer, IPMAN welcomed the decision of the federal government to reduce the cost of the Petroleum Motor Spirit in the country, noting that it would give Nigerians the chance to buy more volumes with little capital.
In Lagos, Mr Dele Tajudeen, Zonal Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said that the cut was also likely to decrease the money invested by petroleum marketing companies to buy the goods.
He said, however, that mixed feelings were encountered with the regulation as it has positive as well as negative impacts on the market in Nigeria.
He also instructed Nigerian National Petroleum Corporation, NNPC, to bring stakeholders in the issuance of policies to help marketers adjust their operations to the demand.
The reduction will further alleviate the masses’ problems especially at a time when the nation is experiencing the Covid-19 outbreak affecting every facet of life even the developed countries.
The virus has paralyzed the global economy and it has affected our main source of income generation as a nation which has dropped to $24 per barrel. The reduction will enable people to buy more with little money and they can get more volumes. It is a welcome idea and we appreciate the move from the federal government. We want to assure the masses that as a body we will abide by the directives of NNPC, however, the pronouncement has affected us positively and negatively.He Said