• Accuses OPEC of working against Nigeria’s economic growth
• Says exiting will increase oil revenue

By Yakubu Lawal

A renowned development economist and public affairs commentator, Professor Ken Ife has urged the federal government to exit the Organisation of Petroleum Exporting Countries (OPEC) so as to maximize   economic, financial and development gains for the country.

In May this year, the United Arab Emirates (UAE) withdrew its membership of OPEC; other countries that left the organization before now are Angola, Ecuador, Indonesia and Qatar.

Speaking against the volatility in the international oil market due the blockade of Strait of Hormuz, Ife said that Nigeria’s continued membership of OPEC is affecting the country’s ability to maximum benefit from hydrocarbon resources in the country.

Responding to questions on an AIT morning belt program “ Moneyline with Nancy” monitored in Abuja recently, Professor Ife said developments in the international oil market clearly show that the market is being manipulated by the American President Donald Trump with his statement which the oil market reacted to, adding that after the recent signing of the Iran-US MOU , crude oil prices declined to $75 per barrel in the international market. “But Israel is still holding onto her way ‘. They said MOU is not binding on them “ he said

According to him, membership of OPEC does not allow Nigeria to price its product maximally because OPEC price benchmark and production quota must be obeyed by its members as the organization’s interest is to ensure stability of oil prices and discourage glut in the market.

“Since the beginning of the crisis between Iran and US/Israel, Iran has placed a strong hold on the Strait of Hormuz where about 40 per cent of global oil and gas passes through”, Ife said adding, “this development has resulted in the high cost of crude due to short supply to the market”

He argued that if Nigeria exits OPEC, it would place her in a position of not only directing where its oil will go but embark on unhindered production level.

According to him, instead of selling crude to traders, such sales should be directed to local production or refineries adding that this will bring about maximum benefits. He noted that Dangote refinery’s 650,000 barrels per day, with a plan to peak production at 1.4 million barrels capacity, NNPCL/ China group capacity, BUA Refinery about 200,000 barrels per day and other  local private refiners’ capacity  would place Nigeria as major oil refining country for the sub region.

“Government can now encourage the investment in upstream sector to be able to produce more crude and gas for domestic use pointing out that the gas portion can now feed the power generation companies at a cost that will not be heavy on them like is currently experienced

 “Nigeria’s domestic refinery would be so huge that the country will be able to concentrate on the local market as well as supply refined products for both domestic and export markets, he stressed , adding that Nigeria should serve as hub for energy supply in Africa”, he further stated.

The professor of economics said the price of Household kerosene (HHK) would not come down now because the airline operators who are using Jet-A1 Fuel are in competition for demand.

On why the marketers don’t reduce in prices when ex-depot price is cut, he said that in most cases the marketers would still be dispensing oil stock that was bought at a higher price, stressing that they can only revert to new price when the old stock is exhausted and new consignment purchased at reduced price is delivered at their station.

Nigeria’s OPEC quota is about 1.5million barrels per day, which has been missed severally due to several factors hindering crude oil production in the country. These include insecurity, crude oil theft, corruption and vandalism of oil facilities.

Nigeria joined OPEC in July 1971.The organization currently has eleven (11) member countries .They are Algeria, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of Congo, Saudi Arabia and Venezuela.