Following the scare created by the coronavirus in the last three weeks, the crude oil market price has been plunging down pushing the federal government to announce a plan to review the year 2020 budget.
The Minister of Finance/Budget Planning, Mrs Zainab Ahmed, has disclosed on Wednesday that the government was concerned about the drop in the crude oil price as it will translate into low revenue to the government, saying soon the government would commence a mid-term review of the budget to determine next line of action.
Ahmed was briefing Journalist at the statehouse Abuja shortly after the Federal Executive (FEC) meeting which was chaired by President Muhammadu Buhari. She said “We are concerned about the current drop in oil price because it’s now below our budget.
“We will do a mid-term review, and if the impact is so much, we will need to do an adjustment in the budget, working together with the National Assembly,” Ahmed added.
Accordingly, the price of Nigerian crude Brent was formerly above $60 per barrel when the year 2020 budget of N10.9 trillion was signed by President Buhari in December 2019.
The budget was paged at $57 per barrel all things being equal.
Conversely, the crude price has been nose-diving since January of this year and threatening to hit the rock following the outbreak of the coronavirus in the last three weeks.
As at Wednesday yesterday the price was hovering around $53 per barrel, making it less $4 per barrel off the budget benchmark.
However, the Minister noted that rise above the daily output of 2million barrel per day in the production would cushion the loss to some extent.
According to her, the production per day of the oil was slightly above the 2million as paged, it sometimes shoots to 2.1 million barrel per day, saying this would be like a shock absorber considering the fall in the price.
The minister also spoke on the FEC’s approval of the revised sum of $2.5bn for the Ajaokuta-Kaduna-Kano gas pipeline project.
The original proposal for the project in 2017 was $2.89bn.
She revealed the project would not only create a job to Nigerians, but it would also boost revenue generation to the government.