The Nigerian National Petroleum Corporation (NNPC) on Wednesday, March 11; raised the alarm about the looming crisis as a result of low oil prices and asked Nigerians to brace up for tougher times ahead.
This is in the backdrop of the crashing economic landscape due to the coronavirus.
Mele Kyari, the NNPC Group Managing Director made this disclosure at the Roundtable Parley with the CBN Governor, Godwin Emefiele with the theme “Going for Growth 2.0” in Abuja.
Kyari specifically advised millions of Nigerians to “prepare for trouble”; as oil prices take the further plunge while demands continue to ebb by the day.
This alarm could not have come at a more auspicious time in the 2020 fiscal year; in view of the foreign exchange earning implications of the coronavirus scourge for the country’s budget implementation and expected outcomes for the citizenry.
“The potential of coming out of the coronavirus will be a long while to come, at least three months.
“So, prepare for trouble for three months. We have a backlog of production that needs to be resolved. We will have the impact of coronavirus for a while.
“Today, I can share with you that there are over 12 stranded LNG cargoes in the market globally. It has never happened before.
“LNG cargoes that are stranded with no hope of being purchased because there is an abrupt collapse in demand associated with the outbreak of coronavirus.
“Today, we have about 50 oil cargoes that have not found landing.
“It means that the traders have purchased it but they don’t know where to take it to.”
The NNPC GMD said in order to remain afloat amidst the ravaging effects of the coronavirus; some oil-producing countries like Saudi Arabia had given a discount of $8 on the price of its crude oil.
Kyari, however, said the NNPC was not resting on its oars; saying several measures were being taken to alleviate the cost of crude oil production in Nigeria.
He said the cost of crude oil production in Nigeria is within the range of $15 to $17 per barrel; adding that a reduced cost of production would create a market for Nigeria’s crude and make the country a choice destination for foreign direct investment.