Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 40)

The Organization of Petroleum Exporting Countries (OPEC), alongside OPEC+, cut crude oil output by two million barrels per day (mb/d) to achieve market stability2. As a result, Nigeria’s oil output quota for November 2022 was reduced by 4.6 percent from 1.826 mb/d in August 2022 to 1.742 mb/d. This measure comes following the downward movement in crude oil prices. This cut follows several consecutive months of an increase in Nigeria’s oil output quota, which the country has continuously failed to meet due to vandalism, oil theft, low investment, and ageing infrastructure. The failure of the country to meet the OPEC quota also suggests the country had benefited little from the increase in global crude oil prices in the first half of the year. Without significant improvement in domestic production, there is a high likelihood that the production level would still be lower than the new quota level. Hence, there is a need to address structural factors such as insecurity that have contributed partly to the country’s low crude oil production. The Nigerian National Petroleum Company (NNPC) Limited needs to develop a roadmap to improve the security around the pipelines to tackle vandals, prevent oil bunkering, and attract investment into the industry.

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