COVID-19: Nigeria mulls budget review as oil producers debate production cuts

The Organisation of the Petroleum Exporting Countries, OPEC, and allied oil producers are set to meet in Vienna to debate production quota as the coronavirus continues to ravage many countries amidst disruption of service-related business, especially international travels.
Already, Nigeria may be feeling uncomfortable as demand for oil in the international  market seem destined for a sharp fall.  Crude oil benchmark  for 2020 is $57 per barrel with a production capacity of 2.1 million barrels per day.

Zainab Ahmed, minister of finance, has indicated a possible review of the N10.59 trillion 2020 budget over the economic impact of coronavirus.

No fewer than 64 countries, including Nigeria, are staking huge resources to combat the virus which has negatively affected the price of crude oil, Nigeria’s major source of revenue.

Ahmed, rising from the Federal Executive Council meeting Wednesday, said crude oil production is now between two million and 2.1 million barrels per day, which is below the benchmark on which the budget was prepared. She said a review will be done to determine if a budget adjustment will be enforced.

“We are concerned because it does have an impact on revenue and at the current crude oil price of $53 is below the budget bench mark. What we are doing is that we are studying the situation and when the budget was passed we committed to do a midterm review,” she said.

“We will do the midterm review and if the revenues are so significantly affected, we will have to do some revisions in the budget by way of budget adjustment. I will want to inform you that the crude production is now at 2 million barrels per day and in some days it has moved up to 2.1 million barrels per day, so that in itself will be a cushion.

“All the same we are not taking any measures now until we have a reasonable period to make a review and then we may need to make an adjustment of budget through working together with the national assembly”, Ahmed explained.

 

Open chat