President Muhammadu Buhari on Thursday during a presidential parley and presentation of report on poverty reduction by Course 38 of National Institute for Policy and Strategic Studies, NIPSS, Kuru, Plateau State, at the Presidential Villa, Abuja, said he nearly resigned for meeting an ‘empty treasury despite a barrel of oil selling for an average of $100 from 1999 to 2015.
“Gentlemen, I have to digress now. For 16 years and eight consecutive governments of the other party, you know that there was unprecedented revenue realized. The oil projection which can be verified was 2.1 million barrels per day.
‘’1999-2015, the average cost of each Nigerian barrel of oil was $100 per barrel. When we came it fell to less than $30 per barrel and is now oscillating between 40 and 50,” he said.
However checks by The Whistler on fluctuation of oil prices from the OPEC website indicate that the president was not correct.
When President Olusegun Obasanjo was elected into office in 1999, the average annual price of crude according to OPEC was about $18 US per barrel, it increased to $28 in 2000 and in 2004 it was $36.5.
In 2007, when Obasanjo was leaving office, the average annual price of oil had gotten to a record high of $69.04 per barrel, in his 8-year-term as Nigeria’s president.
Between 2007 and 2008, when late President Umaru Musa Yar’adua came into office, the average price of crude oil per barrel was $94, it however dropped to $77 when he passed away in 2010.
As at when Goodluck Jonathan took over from the late Yar’adua in 2007, cost of crude oil remained at $77 but rose to $107 in 2011. It got to a record high of $109 in 2012 but plunged to $49 in 2015.
The London based WTRG Economics states, “Until March 28, 2000 when OPEC adopted the $22-$28 price band for the OPEC basket of crude, real oil prices only exceeded $30.00 per barrel in response to war or conflict in the Middle East. With limited spare production capacity, OPEC abandoned its price band in 2005 and was powerless to stem a surge in oil prices, which was reminiscent of the late 1970s.”
Also, economic analysis shows that even with high oil prices, recession is still possible.
WTRG also notes that, “It is worth noting that the three longest U.S. recessions since the Great Depression coincided with exceptionally high oil prices. The first two lasted 16 months. The first followed the 1973 Embargo started in November 1973 and the second in July 1981. The latest began in December 2007 and lasted 18 months.”
For President Buhari to say that oil prices averaged $100 from 1999 to 2016 is false and misleading.
Also, to insinuate that the country is in recession because of low oil prices does not have an economic basis.
AVERAGE ANNUAL OPEC CRUDE OIL PRICE FROM 1998 TO 2016 (IN U.S. DOLLARS PER BARREL)