It is a mixed blessing for the Nigerian economy as prices of crude oil further soared 24 hours after the leaders of the European Union (EU) countries reached an agreement to ban 90 percent of Russian energy imports by the end of the year.
While it is expected that the rise in oil prices is a blessing, Nigeria’s unpreparedness on what is happening in the global oil space could bring more pains to the country.
The decision by the EU has sent the Brent crude higher by $1.17 or 0.96 per cent to $122.80 per barrel and raised the West Texas Intermediate (WTI) crude higher by 37 cents or 0.32 per cent to $115.40 per barrel.
Godwin Emefiele, Governor of the Central Bank of Nigeria at the last Monetary Policy Meeting (MPC) revealed how Nigeria’s reserves were depleting due to the high cost of importing fuel.
He said, “Gross external reserves declined moderately to US$38.36 billion as at May 19th, 2022 from US$39.28 billion at end-March 2022. This was attributed to the weak accretion to the reserves from exports and the high cost of importation of refined petroleum products.”
When oil price crossed $120 per barrel in March, Nigeria suffered a nationwide scarcity occasioned by the importation of adulterated fuel.