The Minister of Finance, Mrs. Kemi Adeosun, Wednesday provided clarity on why the proceeds in the Excess Crude Account (ECA) have remained stagnant despite rising oil prices, saying constrained production volumes had undermined rising crude prices, THISDAY reports.
The federal government had proposed an oil benchmark of $45 per barrel for the 2017 budget but the National Assembly jacked it up to $47 per barrel, translating to excess revenue of $2 per barrel, which ought to have been saved in the ECA. But despite the fact that oil sold for more than $47 per barrel for much of the second half of last year, the balance in the ECA has remained unchanged at $2.31 billion.
Elaborating, the minister said the excess figures do not necessarily revolve around the price alone but also have to do with the quantity of daily oil output. According to her, while the price of crude rose for much of 2017, oil output in the Niger Delta failed to meet the budgeted production target of 2.2 million barrels per day due to militancy in the region. She, however, assured that oil production would improve in the course of this year, adding that funds would automatically accrue into the ECA in 2018.