As the National Assembly deliberates on the 2024 federal budget, Nigeria faces a major challenge in funding its expenditure plans due to the sharp decline in the price of its main export commodity, Bonny Light crude oil.
The 2024 budget was based on an oil price of $77.96 per barrel and an oil production of 1.78 million barrels per day (bpd), according to some assumptions made by the government in view of the global oil market situation.
However, a recent report by Vanguard showed that the price of Bonny Light and other crudes dropped to $76.53 per barrel, raising doubts about the feasibility of the budget projections.
The report also revealed that the stakeholders in the oil and gas sector were concerned about the potential impact of the oil price slump on the performance of the 2024 budget, which is still undergoing legislative scrutiny.
According to the latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country’s oil production also fell by 7.4 percent to 1.25 million bpd in November, compared to 1.35 bpd in September. The total production, including condensate oil, also decreased by 6.1 percent to 1.466 bpd in November, compared to 1.56 bpd in September.
Despite the gloomy outlook, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, expressed optimism that the country would surpass its 2024 budget target of 1.7 million bpd. He made this statement during a stakeholder’s interactive session on creating value and enabling investments in Nigeria’s oil and gas sector, organised by Chevron Nigeria Plc.