TRUMP’S ENERGY ORDER SET TO CRASH U.S OIL IMPORTS FROM NIGERIA
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The President Trump planned an executive order and declaration of a national energy emergency, targeted at enhancing the United States oil and gas production could impact on Nigeria’s oil demand and revenue generation.
This was even as prices of oil, including Nigeria’s Bonny Light dropped to $80 per barrel from $83 per barrel, yesterday, as traders await U.S. President-elect Donald Trump’s inauguration in the hope of some clarity on his policy agenda.
However, the United States used to import a bulk of its crude oil from Nigeria, but the commencement of shale oil, deliberate government policy and other factors, reduced the nation’s oil and gas import in recent times.
Despite the reduction, recent data indicated that the United States oil and gas import from Nigeria was worth $4.73 billion in 2023.
According some experts, the revenue would likely decrease in 2025 and beyond following President Trump executive order and declaration of a national energy emergency.
In an interview with Vanguard, yesterday, an economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, said: “Naturally, if investments in oil and gas increase in the United States and the US of course is a major oil producer that will increase the global supply. If global supply increases, energy prices are likely to fall.
“So, if energy prices fall, of course, that has implications for our own revenue. So it’s likely to negatively impact on our oil price, on our oil revenue but it may be positive for businesses because a reduction in crude oil price or commodity or global oil price typically reduces the cost of petroleum products, including the Premium Motor Spirit, PMS, also known as petrol, diesel and jet fuel.
“However, it’s a double-edged sword as changes, if the price increases; it will favour the government and penalize the private sector, who uses energy. If the price drops, it penalizes the government and benefits the citizens and investors because their energy costs will drop.
“That is one implication of the Trump presidency. The second implication is, if he’s able to calm down the situation between Russia and Ukraine. Russia is a major oil producer as well, a major gas producer.
“So, he’s able to calm down Russia and Ukraine and he has the potential to do that because it is part of the commitment that he has made.
“If he’s able to do that, then we are likely to see more production of oil. We are likely to see the lifting of sanctions on Russia and if that happens, oil production will increase and prices will fall. Again, that will affect revenue negatively, but it will benefit businesses because cost of energy will drop.
“So, that is the nexus for me between what is happening with Trump policies and our domestic economy, especially the oil and gas sector.”
On his part, a Port Harcourt-based energy analyst, Dr. Bala Zakka, said: “Major importers from Nigeria, indirectly encourage our nation to be lazy, exporting crude oil instead of processing to add more value to the economy.
“I strongly believe that by reducing importation through his policies, President Trump would encourage increased refining in Nigeria and other African nations. We need to expand our refining capacity to refine more petroleum product and derivatives, capable of adding value to the domestic economy.”
Also, the National President of Oil and Gas Service Providers Association of Nigeria, OGSPAN, said: “Every nation continuously reviews its environment and takes decisions on the best ways and means to grow its economy. Nigeria should do the same in order to reduce dependence on oil and other economies.”
Meanwhile, the Petroleum Products Retail outlets Owners Association of Nigeria, PETROAN, has assured consumers that the coming on stream of the Dangote Refinery and the NNPC Limited owned Port Harcourt refinery would ensure easy flow of petrol during the Yuletide season.
PETROAN in a statement by its National Public Relations Officer, Dr Joseph Obele said the petrol supply agreement reached with the 650,000 barrels per day Dangote Refinery would avert any possible shortage of premium motor spirit during the period.
This, according to Dr Obele, is due to the efforts of PETROAN distribution technical committee incharge of planning and execution of zero-fuel scarcity strategy.
“We are happy that Nigerians are going to travel effortlessly during this period of the year”, the Group added.
Recall that the National President of PETROAN, Dr Billy Gillis-Harry, on Monday 2nd December 2024 led the negotiation team of the association to a fruitful strategic business meeting with the management of Dangote Refinery in Lagos.
PETROAN noted that the “sealing of a transactionary deal with Dangote Refinery was the aftermath of a successful buyer-seller negotiation and agreement secured by PETROAN at the strategic meeting.
“PETROAN National President commended the Vice President of Dangote group & Managing Director of Dangote Refinery, Mr. Devakumar V. G. Edwin, for his cooperation and strategies deployed so far to make petroleum products available to all Nigerians throughout the end of year festivities and beyond.”
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