What's in Store for Nigerians As Oil Price Surges? Experts Speak

The price of crude rose to U.S.$130 a barrel, the highest since 2008 as the United States and its European allies considered banning the importation of Russian oil in protest against Russia's invasion of Ukraine.

The expectation is that oil-exporting countries will rake in revenues and grow their foreign reserves, while the cost of goods will rise globally. But for a country like Nigeria, which sells crude and buys refined fuel, the effects will not be as straightforward.

Paul Alaje, an economist at SPM Professionals, said, "The increase in pump price to an unprecedented amount in recent years has shown that the Nigeria government will earn more in revenue from crude, however, as soon as this revenue comes, the Nigerian government will give it out to refineries around the world. "The direct implication of this is that the government will now need to pay more in subsidies beyond the gauge that was received from revenue. This will also further deplete the potential share of the revenue," Alaje said.

The fuel scarcity situation being faced nationwide may further be prolonged because the vessels that bring refined petroleum products into the country from countries around Ukraine and Russia are likely to face some delays.