Brent crude oil price hits $82 a barrel, Nigerians to pay more for fuel

Brent crude oil price jumped sharply and remained high on Friday after reports that the protests in Kazakhstan had disrupted production at its biggest field, Tengiz. This news is a double edge sword for Nigerians. While it will shore up revenue and foreign exchange for the country it will also lead to increase in pump price of petrol which the government is planning to implement in February. Brent crude was trading at over $82 per barrel, with West Texas Intermediate at over $80 a barrel after news that oil production at Tengiz, in the Caspian Sea, was reduced. According to a Reuters report, the reduction was related to disruptions to train lines caused by some contractors working in the field who had declared their support for the protesters. “TCO production operations continue, however, there has been a temporary adjustment to output due to logistics,” said Chevron, the operator of the field as part of the Tengizchevroil consortium, or TCO.

Kazakhstan produces some 1.6 million bpd of crude oil, of which 700,000 bpd come from Tengiz. Under the OPEC+ oil cut deal, the central Asian country has been producing less, although it has been criticized by its partners for failing to comply with the cuts. For February, Kazakhstan’s quota is 1.589 million barrels daily. Protests erupted in Kazakhstan earlier this week over higher fuel prices. The government had lifted price controls on liquefied petroleum gas (LPG), which many Kazakhs use to fuel their LPG-converted vehicles because it’s cheaper than gasoline. The rise in fuel prices also resulted in a surge in consumer goods. The protests continued even after the government resigned to appease the protesters and turned violent.

In response, President Kassym-Jomart Tokayev said the price cap on LPG will be reinstalled, and prices will be reduced. Despite this, protests continued, with Reuters reporting earlier today that police had killed dozens of protesters and arrested 2,000. Some 18 members of Kazakh security forces were dead, too. Russia was sending in paratroops to help put down the protests under a Collective Security Treaty Organization decision. The CSTO is an intergovernmental security alliance between several former Soviet states, including Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.