• OPEC members mull emergency meeting
• Naira slides to N300 per dollar at parallel market

THERE is no end yet to the bad news for Nigeria and other 12 members of the Organisation of Petroleum Exporting Countries (OPEC) who have been struggling to meet their budget commitments due to falling oil prices, as the cartel’s daily oil basket price falls to $27.07 per litre.

With the price falling to the lowest level in seven years, OPEC is considering holding an emergency meeting to discuss a possible line of action while oil operators in Nigeria are raising concern on the need for the Federal Government to re-strategise and fast-track its economic diversification agenda.

Meanwhile, the naira has hit a new record low of N289 to the dollar at the parallel market in Lagos and N300 in Kano state.

The currency had fallen to a record low of N282 per dollar on the unofficial market on Monday, after the nation’ apex bank announced its decision to stop the weekly intervention in the foreign exchange market with the funding of about 2,800 BDC operators at $10,000 each.

The currency, which is pegged at around N198 to the dollar on the official interbank market, was quoted at N277 earlier on Monday, but moved to N283, after CBN said it would no longer fund the Bureaux De Change Operators

The new price level is posing a threat and further drop in national earnings which reportedly dropped to N525.857 billion in September 2015, according to the National Bureau of Statistics (NBS).

The agency which gave the breakdown of Nigeria’s earning in the months of June, July, August and September, showed crude oil earnings are on a downward trend.

According to the report, Nigeria’s crude oil export stood at N617.364 billion, N572.813 billion, N512.823 billion and N525.857 billion respectively in those months.

OPEC on its website yesterday displayed a new price of $27.07 per barrel for its daily price basket.

The OPEC 13 basket of crudes includes Nigeria’s Bonny Light, Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Irked by the price scenario, the Minister of State for Petroleum and OPEC President, Ibe Kachikwu, yesterday said there was a lot of push from various blocs within OPEC for the need of a meeting, adding that current market conditions support such a move.

Noting that it may take place in February or March, the OPEC chief said any meeting would be to review the organisation’s position to see if there was any need to change its strategy.

A governance policy analyst, Ademola Oshodi, said: “Though the very low oil exporting prices, engineered by OPEC leader Saudi Arabia and other external forces, can be viewed as against Nigeria’s short-term interest, its long-term effect is the unique opportunity it is giving Nigeria to diversify and grow its economy.

“Nigeria can demand a review of the OPEC’s policy, but it would not get far. It must realise that there are much bigger geopolitical forces at play, including Saudi Arabia’s need to position itself in the market, Middle-East rivalries, and to a certain extent, the competition with the North-South Divide between the wealthy developed countries and the developing ones that mainly constitute OPEC.

“The organisation has enabled Nigeria to punch above its weight in global affairs, enabled it to stand up to the powerful West. OPEC has been extremely valuable to Nigeria, and vice versa. Nigeria must continue to maintain relevance in this strategic association even if it is not being heard at this moment,” he said.

The Nigerian National Petroleum Corporation (NNPC) said Nigerian earned about $308.5 million from crude oil export in October, which was not captured in the NBS report.

The corporation’s latest report said: “At an average oil price of $47.45 per barrel and exchange rate of N195.95 per dollar, the domestic crude oil lifted by NNPC is valued at $572,997,921.89 or a naira equivalent of N112,278,942,793.37 for the period.

“The remaining crude oil lifted for export was valued at $305,856,048.03 at an average price of $49.58/barrel. The total value of crude oil lifted on the account of NNPC in October, 2015 was thus $878,853,969.91. From January to October 2015, a total volume of 640.76 million barrels of crude oil and condensate was lifted by all parties,”

Meanwhile, analysts say the new oil price may not be suitable to match the cost of production in some countries including Nigeria which is estimated to cost about $30 to produce one barrel of oil.

In the United Kingdom, it costs $52.50 to produce a barrel of oil; in Brazil, nearly $49 per barrel.

Production cost is around $41 a barrel in Canada and $36 in the United States.

On the other side of the coin, Saudia Arabia and Kuwait can pump a barrel of oil for less than $10 and Iraq for about $10.70 per barrel, according to experts.