By Olaitan Ibrahim
The Chief Executive Officer, CEO, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Farouk Ahmed, yesterday said that the inconsistent tariff policies of the United States, President Donald Trump, and the concomitant instability in global oil markets resulting to the are negative impacting Nigeria’s economy.
Briefing State House correspondents, when he was featured on ‘Meet-the-Press’ briefing series, a special programme organised by the Presidential Media Team, at Aso Villa, Abuja, Ahmed said while the drop in petroleum product prices may benefit consumers, the broader economic consequences are severe for Nigeria, which heavily relies on oil exports.
He said that there is a sharp drop in prices from $73 to $60 per barrel in a single day, as an example of how revenue inflows are being disrupted.
The NMDPRA boss also noted that domestic challenges, including pipeline vandalism and reduced production, also contributed to compounding the problem.
He said: “As consumers…we are happy that the price is coming down, but…as a nation, it’s not good for our economy because our revenue inflow is also impacted.
“Most importantly, what is even destabilising the market is inconsistencies in the way President Trump also sends his policies. He moves today. Tomorrow, he reverses. So it’s been challenging to predict the next level,” Ahmed explained.
Recall that the Organisation of Petroleum and Exporting Countries, OPEC, had recently issued reports indicating that Nigeria’s oil output has fallen to approximately 1.4 million barrels per day.
Besides, the situation has worsened as a result of President Trump’s aggressive trade policies, including sweeping tariffs on goods from several nations, especially China, and threats of levies on other countries, have injected uncertainty into global markets.
The NMDPRA CEO said: “Recently, as we all know, the global oil market, not only oil market, but the global economy has been a bit volatile, in the sense of the new American government’s policy of tariffs, not only targeted at China but the whole countries across the world.
“Investors and traders in not only the oil and gas industry but in general economies of the world are moving left and right to the extent that some are doing day trading. That means you do your trading today. You close by the end of today because you never know what tomorrow’s policy will drive the market into.
“So the crude oil and petrol products market continues to have a downward trajectory because of these inconsistencies and policies of the government of United States, and the key aspect of it is the aspiration of the American President to ensure that the crude oil pricing, or the crude oil price come down to maybe below $50 a barrel, that’s why he encourages more exploration in his country.”
Turning to the local implications, Ahmed acknowledged that while lower product prices benefit Nigerian consumers, the overall impact on the economy is negative.
“So how does it relate to our own local industry regarding crude oil pricing, product pricing, demand and supply? We see a downward trajectory in terms of product pricing and crude oil pricing.