The global price of crude oil has risen to above $39 per barrel, surpassing Nigeria’s 2016 budget benchmark of $38 per barrel.
In January, the federal government was heavily criticised for pegging the benchmark at $38 per barrel in spite of the continuous global crash of crude oil prices.
At the time, the Minister for National Planning, Udoma Udo Udoma, had said low crude oil prices would not affect the 2016 budget.
“Our budget is achievable; we have ongoing reforms targeted at diversifying our revenue base away from single oil commodity economy.”
But only last week, the Minister inferred that Nigeria may have to review the budget benchmark as early as June, due to the low crude oil prices.
He had said: “The benchmark of $38 per barrel of price of oil is not sacrosanct because of the subsisting global environment. If at mid-year there is no improvement, we will come back to you for mid-term review. The review may come as quickly as June this year.”
But as a result of the increase in the price of Brent crude, the global oil benchmark, to an all-year high of $39.50 on Monday, the federal government may not need to carry out a review anymore.
The increase is expected to have a positive effect on Nigeria’s flailing economy as the inflow of foreign currency will improve significantly.
