The Nigerian National Petroleum Corporation (NNPC) revenue projection has put crude oil price for the 2022-2024 Medium Term Expenditure and Revenue Framework (MTEF) and Fiscal Strategy Paper (FSP) at an average of about $60 per barrel.
The projection follows a three base crude oil price scenario presented on Wednesday by the Group Managing Director of the NNPC, Mele Kyari.
In the presentation to the House of Representatives Committee on Finance in Abuja, Kyari said base crude oil price scenario in the medium term showed that crude oil price for 2022 would average $57 per barrel; $61 per barrel for 2023, and $62 per barrel for 2024.
The presentation by the NNPC was part of an interactive session on some critical issues in the oil and gas Industry capable of shaping the preparation of the 2022-2024 MTEF/FSP).
Chairman of the House Committee on Finance, Abiodun James Faleke, commended the NNPC GMD for providing detailed explanation and insider perspective on some issues surrounding the operations of the NNPC and the oil Industry that could shape the projections in the document.
Kyari, in his presentation, said the assumptions on the average crude oil prices were arrived at after a careful appraisal of the three-year historical data on 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 pandemic, increased energy efficiency, switching due to increased utilization of gas and alternatives for electricity generation.
“These are reflected in the Medium Term Revenue Framework,’’ Kyari said.
On the perennial issue of smuggling of petroleum products, which has remained a major headache for the government in its attempt to ensure uninterrupted supply of petroleum products, Kyari implored the National Assembly to come to the aid of the Corporation in battling the menace.
He said the Corporation, based on the directive of the President, mobilized some Federal agencies like the Nigeria Customs Service, the Economic and Financial Crimes Commission (EFCC), the Police, Civil Defence Corps and others, to find workable solutions to curb the menace.
On the propriety of establishing NNPC Retail stations in neigbouring countries as a way 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 clear that it would be counter-productive.
The NNPC GMD was of the view that people who are smuggling petroleum products out of the country were not looking for officially priced products.
He said going ahead to establish NNPC retail stations across the country would not yield the desired result, since the people who take products across the border were not interested in selling at the official prevailing prices at approved stations, but under the counter deals.
The NNPC GMD also provided detailed explanations on the Corporation’s equity shareholding interest in Dangote Refinery, noting that the package which was at the instance of NNPC was designed to guarantee national energy security.
He said the equity interest was secured after due consideration of the national interest and best possible options.
“We will have right to 20 percent 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 stated.