Nigeria’s decision to sell crude oil at discounted rates is not uncommon in the global oil market, an Energy Economics professor, Wunmi Iledare, has said.
The measure which is intended to lure more buyers, Prof. Iledare said, was in order as it would help restore buyers from countries that have already stopped buying Nigerian crude.
He told The Nation that Nigeria is lucky that the price at which its crude oil is being offered for sale is not too low as to create panic in the market.
He said: “Luckily, the margin between the discounted price, which Nigeria is selling its crude oil is above $60 per barrel, a price which to me is still relatively good. Therefore, there is no need to complain about the issue of discounting the price of crude oil at the international market by Nigeria, since nobody is ready to produce at a loss. It is important to know that the issue of discounting the price of crude by producer(s) of the product is not uncommon.
Iledare, who is also Director of Energy Information at the Centre for Energy Studies, said Nigeria may need to sell its crude at West Texas Intermediate (WTI) price to be able to compete well in the United States WTI, also known as Texas light sweet, a grade of crude oil used as benchmark in oil pricing.
According to him, Nigeria needs to sell its crude at WTI price, if it is still relying on sales of crude for survival of the economy. He urged the Federal Government to concentrate on selling of locally refined petroleum products for growth.
“But the preferred approach for prosperity for Nigeria is to sell downstream products that are locally refined. Based on this development, lower prices are becoming better for Nigerian economy than higher prices,” Iledare said.
