Nigeria Losing Gains From Rising Crude Prices Due To Low Production — Economist

A renowned economist, Dr. Chijioke Ekechukwu, has said Nigeria is missing out on significant economic gains from the current rise in global crude oil prices due to its low crude oil production levels.

The Group Managing Director and Chief Executive Officer of Bristol Investment Limited, Ekechukwu, stated this in an interview with the News Agency of Nigeria (NAN) in Abuja on Sunday while reacting to the ongoing crisis in the Middle East.

According to him, Nigeria could have recorded a major economic windfall if its crude oil production had been operating at full capacity. He explained that the country would have enjoyed greater financial benefits if production had reached its installed capacity or the quota allocated to it by the Organization of the Petroleum Exporting Countries (OPEC).

“Nigeria is currently producing far below its potential as an oil-producing nation, thereby limiting the benefits it can derive from the ongoing rise in global crude oil prices triggered by tensions involving the United States and Iran,” he said.

Data from OPEC shows that although the organisation retained Nigeria’s crude oil production quota at 1.5 million barrels per day (mbpd), the country’s output dropped to 1.31 million barrels per day in February.

Ekechukwu noted that with crude oil prices currently trading far above Nigeria’s 2026 budget benchmark of $64.9 per barrel, the country could have significantly improved its fiscal position if production levels were optimal.

“With crude oil prices now above the budget benchmark, Nigeria’s fiscal deficit for the year could have been largely reduced if the country were producing at full capacity,” he said.

However, the economist warned that while the government may benefit from higher crude oil revenues, ordinary Nigerians are already feeling the impact of rising energy costs.

He noted that increases in fuel prices have led to higher diesel costs, transportation fares and production expenses across various sectors of the economy.

“The rising cost of energy is already pushing up the prices of goods and services, thereby worsening the cost-of-living pressures on citizens. Nigerians are already dealing with high petrol and diesel prices, rising transportation costs and increased production expenses,” he said.

Ekechukwu explained that these cost increases are gradually being transferred to consumers, leading to higher prices of goods and services and a steady decline in the purchasing power of the average Nigerian.

He added that although the country’s treasury may record some revenue gains from higher crude oil prices, the benefits would be significantly lower than what could have been realised if crude oil production had reached optimal levels.