Brent crude oil prices rose to its highest since October 2014 after it hit $88.4 on Tuesday as drone attacks on targets in the United Arab Emirates stoked fears across the region. This development if continued will see Nigerian government earning another oil wind fall that could boost the country’s external reserve position. It could possibly result in build-up in the excess crude oil revenue earning and thus reduce the Buhari administration’s penchant for borrowing. At $88 per barrel  oil prices are firmly back to the pre-Buhari regime when the economy was robust and selling about 1.6 million barrels per day.

However, with the refineries in moribund position, Nigeria will continue to import fuel and the landing cost will rise further. This will be passed to consumers.  Fuel prices will rise, transportation cost will soar while food prices will rise. This will result in imported inflation that will counter balance the dollar earnings from oil. 

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Data from the Central Bank of Nigeria (CBN) reveal Nigeria earned about $11.3 billion from crude oil and gas exports in the third quarter of 2021 when oil prices averaged $75 per barrel. Oil prices remained bullish from the beginning of  the year as the price of the black gold has rallied, despite the surging cases of the COVID-19 Omicron variant, particularly in China and in the United States. This is also supported by easing fears about the Omicron variant’s impact on demand. A recent Goldman Sachs report projects oil price of $100 per barrel by the end of this year and $105 per barrel in 2023 when the Buhari administration is expected to hand over to a newly elected leadership.