A similar scene was witnessed during the collation of data for the 2016 budget, which saw the benchmark of price of oil in the international market fall from $50 per barrel, budgeted to less than $40 before hovering around $43 and $42.50.
As at last week the price of Brent oil, equivalent of Nigerian crude, was $44.3.
The situation is described as worse than last year’s as Royal Dutch Shell, the major oil exploring firm in Nigeria announced its quarterly results, showing a 72 per cent decline in profit this year and the lowest in 11 years.
Shell announcement, coupled with the release of official US energy data showing unexpected glut of oil in storage saw the price of oil shedding a few dollars.
For instance, Brent crude quickly dropped from around $44.3 to $43.68, falling by over 2 per cent in less than an hour. The price further fell to $43.47.
Shell shocked the market, which said it expected about 80 per cent more earnings than posted. Its Chief Executive Officer, Mr. Ben Van Beurden, blamed the development on oil prices, saying lower oil prices continued to be a significant challenge across the business, particularly in the upstream.
However, the Federal Government said it is to unveil its benchmarks for the 2017 budget based on oil price at $42.5 per barrel and daily production output at 2.2 million barrels per day (bpd).
If the optimism exhibited by Minister of Budget and National Planning, Udo Udoma, that things will eke out well, is anything to go by, government’s plan at the medium term fiscal framework can see the next budget recording success.
But same sentiment is lacking within the public consultative forum, mad
Most of the stakeholders echo Udoma’s expectation that oil output will move from less than 1.5 million bpd to about 2.3 million and 2.4 million in 2018 and 2019, respectively, without co
But Udoma believes the naira would settle at N290 against the dollar in 2017 as against its current over N300.