The Nigerian National Petroleum Corporation (NNPC) has projected that the price of oil may go up by as much as $10 over the next three to six months.
The corporation attributed the projected increase to global natural gas crisis, which has resulted in rising prices.
Group Managing Director of NNPC, Mallam Mele Kyari, stated this Inan interview on Bloomberg TV.
Brent crude sold at $76 on Wednesday, and with the projection, could hit $86.
Wholesale gas prices have soared by 250 per cent since the beginning of 2021, including a 70 per cent rise, disrupting food supplies in parts of Europe and putting several energy suppliers out of business.
In Nigeria, over 60 per cent of the country’s domestic gas needs are sourced internationally, while the rest is sourced locally, even though the country sits atop a 206 Trillion Cubic Feet (TCF) proven quantity of the commodity.
The price of Liquefied Petroleum Gas (LPG), or cooking gas, has increased by more than 100 per cent in the last few months due to under-supply, according to NNPC.
Marketers have attributed the increase to the introduction of a 7.5 per cent Value Added Tax (VAT) and rising dollar value to the naira.
Kyari said soaring gas prices would most likely seep into the oil prices because consumers would be forced to seek fuel alternatives to natural gas in the nearest future as a result of rising prices, as demand for oil could be boosted by as much as 1 million barrels per day (bpd).
According to him, the world is presently in a potential crisis because last year, a number of things were not done right, including under-investment in the gas sector, particularly.
“The implication of that is that we’re going to see the effect coming up in a year or two maximum. And that will also affect the gas supply all over the globe and, particularly, in Europe.
“That’s going to show up in a number of gas-rich countries and gas supply projects are being stalled, a number of midstream gas projects are being stalled or delayed, and the net effect will be that there will be an impact on pricing coming very shortly,” he added.
