Amid the uncertainties thrown up by the coronavirus pandemic, prices of Nigeria’s benchmark crude oil grade, Bonny Light, slumped significantly earlier in the week.
A Bloomberg report said that it traded at $12 and $13 per barrel between Monday and Friday.
The report relied on data gathered from traders monitoring the West African market.
The price is $15 lesser than the dated price of Brent crude, the global benchmark of crude oil which traded at $28 Friday, according to details on oilprice.com.
Last month, PREMIUM TIMES reported how Nigeria cut its official selling price of crude oil to record lows as the country looked to clear a glut of unsold April-loading cargoes before announcing its May programme.
The current selling price is below the cost of production for Nigerian crude producers which is estimated at an average of $22. It also falls short of the revised budgetary benchmark of $30 per barrel.
Nigeria relies essentially on crude oil to fund its budgetary and address numerous other fiscal concerns. It also represents about 90 per cent of Nigeria’s source of foreign earnings.
Lockdown Effect
Despite the supply cut by the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+), lockdowns in most cities of the world have led to a drop in demand for crude oil.