Oil price crash forces review of 2019 budget benchmark

Against the backdrop of a long and steady decline in the international oil price, the Federal Government may have started reviewing developments in the global oil market with the intention of adopting a new oil price benchmark for its 2019 budget.

This came as the decline appeared to have bottomed out, yesterday.

The N8.6 trillion budgets was based on $60 per barrel (p/b) benchmark at a time international oil price was around $75p/b.

Though the price later escalated to about $86p/b, it began a downward trend about seven weeks ago closing at a year low of $59p/b last weekend. It, however, increased marginally to $61 as at yesterday, which is still a threat to the 2019 budget, especially as a gap of at least $10 is required between the budget benchmark and prevailing oil price.

Vanguard, December 4, 2018

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