- Nigeria's oil savings, also known as the excess crude account, has now been depleted to thousands
- ECA is a savings account retained by the Federal Government and is funded by crude oil sales that is higher than the budgeted oil price benchmark
- Despite oil trading above $90 more than the budget benchmark, FG has been unable to add a dollar to the account but has made a consistent withdrawal
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The Federal Government Excess Crude Account (ECA) is now $472,513 as of November 2022.
The current level of the excess crude account means that it has declined by 89 per cent in the last eight years, when compared to $4.1 billion in November 2014.
The ECA is a savings account retained by the Federal Government. It is funded by the difference between the market price of crude oil and the budgeted price of crude oil as contained in the appropriation bill.
According to economists, the account has depleted in the last eight years owing to a lack of inflows, oil market vagaries and the country’s revenue crunch, the Punch reports.
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History of Nigeria's excess crude account
The Excess Crude Account (ECA) was established in 2004 as a natural resource development fund to serve as a sort of buffer during crises.
At the time it was established, ECA grew from $5.1 billion in 2005 to over $20 billion by 2008, accounting for more than one-third of Nigeria’s external reserves at the time, before dropping in 2009 to a paltry $2 billion.
Ever since ECA has hovered around $2 billion before closing in December of 2018 at $631 million.
The free fall has continued ever since. As at October 2019, ECA stood at $324 million a few months later, as at March 2, ECA fell to $71.8 million.
The present $472,513 shows ECA has dropped by more than 100 per cent compared to the level it was in 2009.
Hope of recovery
If there is any possibility of adding to the remaining amount, it may not be anytime soon. Nigeria is struggling to produce enough oil to sell.
In October, Nigeria produced barely 1 million barrels despite having the capacity to produce nearly 2 million barrels per day.
OPEC in its latest report noted that Nigeria is now the fourth-best oil-producing country in Africa and the eighth among global oil nations.
All of this implies that there is no money to be saved in the excess crude account, and with production issues not going away anytime soon, there is little hope in the near future.
MRS Fingers NNPC, Duke Oil over bad fuel in circulation
Meanwhile, in an earlier report, Legit.ng revealed that the management of MRS Oil Nigeria Plc had cleared the air on how the Nigeria Petroleum Corporation brought bad fuel into the country, which is causing scarcity and an increase in the cost of transportation.
MRS also dissociated itself from reports making the rounds on social media that it is responsible for the contaminated product in Nigeria and that the company is a responsible corporate citizen who will not go out of its way to harm other citizens.
According to MRS, the NNPC is the sole importer of PMS into Nigeria and the NNPC, through their trading arm, Duke Oil, supplied a cargo of PMS bought from an International trader. Litsaco and delivered it with Motor Tanker (MT) Nord Gainer.