Crude oil price has dropped to $59 per barrel, the lowest since February 2021, sparking concerns about Nigeria’s budget implementation.
Gatekeepers News reports that Brent crude fell by 5.09% to $59.62 per barrel, while US West Texas Intermediate declined by 5.54% to $56.28 per barrel.
The recent decline in oil prices follows two significant events:
– US Tariffs: President Donald Trump imposed sweeping global tariffs, including 14% on Nigeria, on all imports into the US on April 2.
– OPEC Production Increase: The Organisation of Petroleum Exporting Countries (OPEC) and its allies decided to increase oil production by 411,000 barrels per day (bpd) in May.
The current oil price is lower than the 2025 budget benchmark of $75 per barrel, threatening Nigeria’s budget implementation. Experts warn that this will lead to lower revenues and lower foreign reserves.
Jide Pratt, COO of Aiona and Country Manager of Tradegrid, said: “We’ve seen an increase in foreign exchange (FX) rates, which does not help monetary or fiscal policy… We need to sell off some assets to the private sector and enable growth in our economy to buffer low crude oil prices.”
Wale Edun, Minister of Finance stated that: “We are intensifying efforts to ramp up crude oil production… We are also focusing on non-oil revenue mobilisation by FIRS and Customs, budget adjustment and prioritisation where possible, and innovative non-debt financing strategies.”
Nigeria’s oil production fell to 1.46 million barrels per day (bpd) in February, below the 1.5 million quota set by OPEC and the 2.1 million barrels of oil per day target set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for 2025.
