Federal Executive Council (FEC) has projected that Brent crude oil price will depreciate and the naira will recover significantly against the dollar in 2024.
Gatekeepers News reports that the Minister of Budget and Planning, Atiku Bagudu, disclosed the federal government’s outlook for the exchange rate and crude oil price after FEC’s meeting on Monday.
Bagudu said FEC established a reference price of $73.96 per barrel for crude oil and an exchange rate of N700/$ as key assumptions for budgetary planning.
He said, “Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability by particularly the deregulation of petroleum prices, which we maintained that subsidies are gone and indeed the regulation of the foreign exchange market.”
During his inauguration, President Bola Tinubu declared an end to subsidy on premium motor spirit (PMS) in May. This decision jerked up petrol prices, as the government transitioned from subsidised pricing to a cost-reflective system.
Similarly, the federal government also commenced a reform of the foreign exchange market in June, with the consolidation of multiple exchange rates in the official market to unify the rate with the parallel market
Nevertheless, the projected crude oil price by FG is below the $94.91 projection of the US Energy Information Administration (EIA) and the $100 a barrel forecast by Goldman Sachs for 2024.
As of Monday, Brent crude oil price was above $90.
The government further projected that the naira will strengthen against the dollar to N700/$, a far cry from the official market’s closing rate of N778.80/$, and the parallel market’s rate was above N1,000/$ on Monday.
