Thursday, November 27, 2014

SAD! Crude Oil Price Worsen As Diezani Allison Madueke Becomes OPEC President

Nigeria’s Petroleum Minister and new President of OPEC, Mrs Diezani Allison Madueke,

The price of crude oil has continue to plummet despite the appointment of Nigeria’s Petroleum Minister, Mrs Diezani Allison Madueke, as the new President of the Organisation of Petroleum Exporting Countries (OPEC).

The continuous decline in crude oil price was occasioned by the decision of OPEC as influenced by Saudi Arabia to sustain output despite calls from poorer members of the exporters' group for action to halt a slide in crude prices. The position of the poorer members is hinged on the need to stabilize their economy against the falling price of the "black gold".

Both the decision to sustain output and the election of Alison-Madueke took place at the 166th ordinary meeting of OPEC, in Vienna, Austria.

Oil prices have sunk about a third since June due to a boom in U.S. production from shale deposits, coupled with slack demand caused by slower economic growth in China and Europe. This dwindling oil price has led to the government of Nigeria calling for austerity measure to preserve the countries foreign reserve.

“The adjustments are not just about tightening the belt, but trying to increase non-oil revenue to make up for the shortfall in oil revenue,” Minister of Finance, Ngozi Okonjo–Iweala, said few days ago in Abuja.

In planning the 2015 budget, a proposal to the National Assembly has been made to benchmark crude at $73 per barrel compared to the earlier proposed benchmark of $78, as a higher oil benchmark could widen fiscal deficit and will not reflect the true position in the international market. The current price of crude is $75 a barrel. According to data obtained from Central Bank of Nigeria website,
Crude Oil (Bonny Light) in June 2014 sold for $114.60.

Brief about Alison-Madueke

Diezani K. Alison-Madueke, born 6 December 1960, became Nigeria’s Minister of Transportation on July 26, 2007. She was moved to Mines and Steel Development in 2008, and in April 2010 was appointed Minister of Petroleum Resources.

In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries, OPEC, is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.

Alison-Madueke’s election as President of OPEC took place on Thursday at the ongoing 166th ordinary meeting of the Organisation, taking place in Vienna, Austria.

She becomes the first female to be elected into that position, and replaces Libya’s Vice Prime Minister for Corporations, Abdourhman Atahar Al-Ahirish, who was occupying the position.

Before her election, Mrs Alison-Madueke was the alternate president of OPEC and is expected to immediately begin to serve her one-year term at the helm of OPEC affairs.

BBN.