Nigeria’s 2015 budget is contending with a new threat, as crude oil, country’s biggest revenue earner continued its slide to $40 per barrel, hitting longest weekly losing streak since 1986. A report by Bloomberg tagged Bloomberg Billionaires Index, released yesterday, showed that the crude price last witnessed this weekly fall in 1986. Nigeria’s budget, which is predicated on $53 per barrel benchmark, is threatened by the oil price, which fell to $40 per barrel. The budget was passed on the basis of production estimate of 2.2782 million barrels per day, and an exchange rate of N190 to the dollar.

This led to a deficit of N1.075 trillion, representing 1.12 per cent of the country’s Gross Domestic Product (GDP). Checks by New Telegraph showed that the 2015 budget has been recording $29.6166 million deficit daily since Thursday when crude oil price fell to $40 per barrel. The loss is $13 loss on each of the 2.2782 million barrels per day production from Nigeria appropriated in the 2015 budget.

Oil producers in Nigeria and PricewaterhouseCoopers (PwC), in two separate documents seen by New Telegraph at the weekend, said that the country’s economy is in for trouble, if the price fall remains at $40 per barrel. While the oil producers declared that the new price fall will diminish the country’s revenue by over $10 billion, PwC said in its report entitled, “Fit for $50 oil in Africa: Will the boom go bust?” that Nigeria and countries in West Africa that are highly dependent on oil exports would be faced with potential austerity measures and budget reviews.

“We estimate that if crude oil prices average $53 per barrel in 2015, compared to $77.5 per barrel in 2014, the Federal Government of Nigeria’s oil and gas revenue will decline by an equivalent of $10 billion this year, or a gutwrenching equivalent of 30 per cent,” the report by Oil Producers and Technical Session (OPTS), quoted its Chairman, Elizabeth Proust.
http://newtelegraphonline.com/2015-budget-faces-fresh-threat-as-oil-hits-29-year-low/