Government Hedges Crude Oil Purchase Price At $82/brl

Government has decided to hedge the country’s crude purchases at 82 dollars 50 cents a barrel. This means consumers would be fairly insulated from hikes in crude prices on the world market. The Petroleum Price Risk Programme which begun last Friday will be initially operational for at least six months though it covers a full year. Government is looking at hedging one million barrels every month. The programme is expected to cost government about 40 million dollars by way of just premium payment alone for the period. Deputy Finance Minister, Seth Terkper a few months ago explained to Joy Business that the decision to hedge the country’s crude oil purchases was well thought out and based on careful assessments. Hedging does not however mean that petroleum prices will not go up again. It may go up and fluctuate so long as the price on the world market is below the 82 dollars 50 cents a barrel mark. The current prices at the pumps are based on a price build up with a crude price of 75 dollars a barrel, but crude is today selling at 83 dollars. Consumers may however be spared an increase if government decides to continue to support the NPA to provide relief as it has done for some time now. Joy Business has learnt consumers may have to pay about 10 percent more at the pumps in the coming weeks if the government decides to pass on the increases to the final consumer.