The global oil market continues to suffer from the vagaries of the corona virus pandemic, as prices continue to crash due to the sudden, massive and unexpected drop in worldwide demand for crude oil.
The features market for commodities is a turbulent one, due to unforeseen hazards that come and go. Today, it is COVID19; tomorrow, it will be something else.
It is time for Nigeria to protect her economy from being tossed to and fro by circumstances beyond our control. We must assert our sovereignty, by exerting more influence over the global trade in crude oil, and other features.
I believe that the time is right for Nigeria to build a strategic crude oil reserve, with massive storage capacity that can hold at least a month’s worth of our OPEC production capacity.
If we build such an infrastructure, we will not have to sell our crude at a production loss. We will be in a position to stockpile the product in our reserve until such a time as prices improve.
Indeed, other nations take such measures to protect their economy. North American and European nations have such internal controls to protect almost every sector of their economy – from agriculture, automobile, and even intellectual property. Nigeria cannot be left behind. We must be in business for the best interest of our economy.
I would also strongly recommend that we discuss with our partners in the Organisation of Petrol Exporting Countries, and obtain a concession, whereby we can defer our daily quota, such that when we undersell, due to a crash in the price of crude oil, we can oversell when the prices stabilize, subject to the condition that we balance out our quota.
Nigeria’s oil industry remains more susceptible to outside influences, than to internal control. This measure can flip that, and make our oil industry more stable, even when there is global instability. This will translate to greater economic independence on our part.
Signed
Atiku Abubakar
Vice President of Nigeria 1999-2007
