Former Vice president of Nigeria Atiku Abubakar has raised his voice on the oil prices crashing. In a statement titled “time for strategic oil reserve in Nigeria” he said if Nigeria could build such infrastructure they will not sell their crude oil at production loss. The infrastructure will enable the country stockpile the crude oil in its reserve until prices improves.
The former Vice President was reacting to how crude oil price have crashed in the market as a result of the Corona Virus pandemic. He said it is high time Nigeria builds strategic oil reserve with massive storage capacity. That could hold at least a month worth of its OPEC production capacity.
The statement read:
“The global oil market continues to suffer from the vagaries of the corona virus pandemic, as prices continue to crash due to the sudden, massive and unexpected drop in worldwide demand for crude oil.
“The features market for commodities is a turbulent one, due to unforeseen hazards that come and go. Today, it is COVID19; tomorrow, it will be something else.
“It is time for Nigeria to protect its economy from being tossed to and fro by circumstances beyond our control. We must assert our sovereignty, by exerting more influence over the global trade in crude oil, and other features.
“I believe that the time is right for Nigeria to build a strategic crude oil reserve, with massive storage capacity that can hold at least a month’s worth of our OPEC production capacity.
“If we build such an infrastructure, we will not have to sell our crude at a production loss. We will be in a position to stockpile the product in our reserve until such a time as prices improve.
“Indeed, other nations take such measures to protect their economy. North American and European nations have such internal controls to protect almost every sector of their economy – from agriculture, automobile, and even intellectual property. Nigeria cannot be left behind. We must be in business for the best interest of our economy.
“I would also strongly recommend that we discuss with our partners in the Organization of Petrol Exporting Countries, and obtain a concession, whereby we can defer our daily quota, such that when we undersell, due to a crash in the price of crude oil, we can oversell when the prices stabilize, subject to the condition that we balance out our quota.