Oil exporting countries in the Middle East and Africa, including Nigeria, lost more than $340 billion in oil revenue from their budget in 2015, amounting to 20 per cent of their combined gross domestic product, the International Monetary Fund (IMF) has said.
Managing Director of the IMF, Christine Lagarde, who disclosed this yesterday, stated that supply and demand factors in the oil market suggest that oil prices are “likely to stay low for an extended period.”
Speaking at the Arab Fiscal Forum in Abu Dhabi, Lagarde noted that “This will mean that all oil exporters will have to reduce spending and work on raising revenues,” adding that such adjustments will help bolster growth and job creation and help maintain debt sustainability.
“At the same time, these economies need to strengthen their fiscal frameworks and reengineer their tax systems by reducing their heavy reliance on oil revenues and boosting non-hydrocarbon sources of revenues,” Lagarde further stated.
Nigeria reportedly lost over $62.8 million revenue between November and December last year, due to the slump in oil prices.
President Muhammadu Buhari left Nigeria Sunday for the Gulf as part of ongoing efforts by country and other members of the Organisation of Petroleum Exporting Countries (OPEC) to achieve greater stability in the price of crude oil.
Meanwhile, Brent oil held losses near $33 a barrel yesterday as Nigeria backed Saudi Arabia and Russia to freeze output amid a global glut. Futures were a little changed in New York after declining 3.7 per cent Friday, Brent for April settlement was unchanged at $33.01 a barrel.
Under the new deal, however, Iraq and Iran are expected to have production capped at a higher level to allow the countries to gain lost market share due to war and sanctions, Minister of State for Petroleum Resources, Ibe Kachikwu, told reporters in Doha, according to Bloomberg.
Oil producing nations agreed to wrap up talks on the freeze by the start of March, Bloomberg also reported Russian Energy Minister, Alexander Novak, as saying.
Crude prices has fallen by about 12 per cent this year on speculation that a worldwide surplus will persist amid the outlook for increased exports from Iran after the removal of international sanctions and brimming United States stockpiles.
In a related development, the Nigerian National Petroleum Corporation (NNPC) yesterday announced the deployment of additional trucks of petrol to arrest the emerging fuel queues in the Federal Capital Territory.
The NNPC in a release explained that it has increased the fuel truck-out to Abuja and environs from the usual average of 160 trucks per day to 250 trucks, about 8.25 million litres, “to arrest the lull experienced due to last weekend’s State House of Assembly re-run election in Niger State which affected truck movement from the Suleja depot.”
While calling on members of the public to refrain from all forms of hoarding, diversion and panic buying of petroleum products, the Corporation, in the statement by its spokesman, Ohi Alegbe, assured of availability of petrol to meet the demand of consumers in Abuja and beyond.
“Apart from the additional injection of volumes of petrol into the market, the Pipelines and Products Marketing Company (PPMC) has stepped up monitoring across fuel stations to ensure strict compliance with laid down rules and regulations on the sales and distribution of petroleum products,’’ the Corporation further informed.