Reps Push For $60 Per Barrel Oil Benchmark

The House of Representatives has asked that the oil bench mark for the 2022 Budget proposal should be set at $60 per barrel.

This will be different from the $57 brought by the executive.

The House also called for zero allocation for government agencies who refused to implement the 2020 budget as appropriated.

This followed a debate on the 2022 budget proposal on the floor of the House yesterday in Abuja.

Some members of the House said since the crude oil is put at $80 per barrel, the benchmark should be increased to $60.

Rep Leke Abijide (ADC-Kogi), stated that the benchmark of $57 per barrel was a bit low, considering the $80 per barrel it is at the moment.

He added that it should be increased to $60 per barrel.

Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) said Nigeria’s crude oil production averaged 1.451 million barrels per day (bpd) in September 2021.

According to its Oil Market Report for October 2021, the figure showed an increment of 156 barrels per day, when compared to the 1.296 million barrels per day, produced an average August.

It also noted that Nigeria’s non-oil economic activities grew despite the lingering effects of the COVID-19 wave.

The report said: “The Stanbic IBTC Bank Purchasing Managers’ Index (PMI) edged up to 52.3 in September from 52.2 in August, remarking the 15th consecutive monthly expansion.

“Yet, labour market pressures continued to be a concern. Recently released National Bureau of Statistics data indicated that the unemployment rate increased to 33.30 per cent in fourth quarter 2020 from 27. 10 per cent in second quarter 2020.”

It said, however, consumer and business confidence had increased, driven by the positive sentiments related to the easing of COVID-19 restrictions and rising commodity prices.

The report also said world oil demand will increase by 5.8 million bpd this year.

The report said the world oil demand growth was revised down from 5.96 mb/d in September’s assessment.

It said the downward revision was mainly driven by lower-than-expected actual data for the first three quarters of this year.

“This is in spite healthy oil demand assumptions going into the final quarter of the year, which will be supported by seasonal uptick in petrochemical and heating fuel demand and the potential switch from natural gas to petroleum products due to high gas prices.

“Both Organisation for Economic Cooperation and Development (OECD) and non-OECD figures are adjusted lower,’’ the report noted.

According to the report, the downward revision in OECD regions focused in first half of 2021, while the non-OECD revision is concentrated in third quarter 2021.

According to the report, the world is expected to consume 96.6 mb/d of petroleum products this year.

“For 2022, world oil demand growth is unchanged at 4.2 mb/d. As a result, global demand next year is seen averaging 100.8 mb/d.

“Demand is anticipated to be supported by healthy economic momentum in the main consuming countries and better management of the COVID-19 pandemic.’’