The price of Nigeria’s Bonny Light crude oil has declined by 10.6%, falling to $73.53 per barrel from $84.02 per barrel recorded on January 15, 2025. This drop has sparked concerns over the Federal Government’s ability to meet its 2025 budget revenue target.
The 2025 budget is based on a crude oil price benchmark of $75 per barrel, with a production target of 2.06 million barrels per day (bpd) and a total revenue projection of N36.35 trillion—56% of which is expected to come from oil sales. However, the fall in crude prices could result in a 6.6% decline in projected oil revenue, further compounded by oil production levels falling below the budget benchmark.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), crude oil production stood at 1.737 million bpd in January 2025, an increase from 1.667 million bpd recorded in December 2024, but still below the budget target.
Reacting to the development, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), stated that a decline in oil prices could negatively impact government revenue but might benefit businesses by lowering energy costs. “A reduction in crude oil prices typically leads to a decrease in petroleum product costs, including Premium Motor Spirit (PMS), diesel, and jet fuel,” he noted.
Similarly, Mazi Colman Obasi, National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), emphasized that while the price slump could hinder budget execution, it might also lead to lower costs for refiners, potentially reducing petroleum product prices.
With oil prices fluctuating and production levels yet to meet budget expectations, analysts warn that Nigeria’s fiscal projections for 2025 may require urgent adjustments to mitigate revenue shortfalls.
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