Brent oil prices tumbled Wednesday underneath $35 for the first time in 11 years, plagued by abundant oversupply and amid the ongoing row between key producers Iran and Saudi Arabia.
The AFP reported that at about 10:30 GMT, European benchmark Brent North Sea crude oil for February delivery sank to $34.83 per barrel, the lowest level since July 1, 2004.
This comes amid calls for the Federal Government to reduce the crude oil benchmark price of $38 per barrel contained in the 2016 to 2018 Medium Term Expenditure Framework and Fiscal Strategy Paper sent to the National Assembly for next year’s budget.
On December 14, the Lagos Chamber of Commerce called for a reduction in the benchmark, warning that the draft budget benchmark for crude oil looks very fragile given the continued and projected boost of supply side of oil in the international market and its potential impact on price.
Two weeks later, the Trade Union Congress also called for a reduction of the benchmark price.
The Chairman, TUC Rivers State, Mr. Chika Onuegbu, who conveyed the union’s “serious concerns about the budget proposal,” said the budget was “laudable and ambitious, but seems unachievable.”
The call by the TUC followed the projection by the International Monetary Fund that the price of crude oil could fall to as low as $20 per barrel this year.
Onuegbu, who noted that the basket oil price of the Organisation of Petroleum Exporting Countries stood at $32.14 per barrel as of December 24, 2015, said, “Anyone who is a keen observer of the events that are shaping the crude oil price will recognise that we are in for a sustained low crude oil price regime.
“Accordingly, it is doubtful if the budgeted oil revenue of N820bn will be realised in 2016. If the budgeted oil revenue is not realised, this will negatively impact on the 2016 budget performance.
“It is, therefore, important that the government begins to make contingency arrangements should the crude oil price fall below the benchmark price or better still, review the benchmark oil price downwards.”
Crude oil revenue accounts for about 90 per cent of Nigeria’s foreign exchange earnings and although the Federal Government has said it is targeting much higher non-oil revenue this year, there are doubts about its ability to seriously achieve the goal.
The TUC, which noted that the government planned to raise N1.5tn from independent sources to fund the proposed N6tn 2016 budget, said, “The Federal Government’s revenue projections for oil revenue, non-oil revenue (non-oil taxes) and independent revenue sources are very ambitious.
“They come with the risk that they may most likely be unachievable. If they become unachievable, then the planned expenditure, especially the planned N1.8tn capital expenditure, will become a mirage.” Click to signup for FREE news updates, latest information and hottest gists everyday
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Please go to 5 so we can sober up
ReplyDeleteMallam BUHARIA over to U.
ReplyDeletewho will EFCC arrest for the fall in crude oil prices..
ReplyDeleteOPEC or PDP
who will EFCC arrest for the fall in crude oil prices..
ReplyDeleteOPEC leader or PDP leaders
This truly Economic Sabotage ...DSS pls arrest somebody
ReplyDeleteNigeria must diversify they should not wait for oil to hit $10 a barrel...
ReplyDeletewhat happened to Operation Feed the Nation OFN...i remember back then all students in my school were allocated portions in the school farm, where we planted Maize, yams ,groundnut as part of practical agriculture...There was actually a bumper harvest with so many tubers of yams, bags of corn, and many bags of groundnut
...the farm produce was shared to all students class by class and the remaining was taken to be sold at the local market.. THE GOVT SHOULD RE ENACT AGRIC PROGRAMS WITH MECHANIZED METHODS...imagine the arable farm land all over Nigeria...
Nigeria must diversify they should not wait for oil to hit $10 a barrel...
ReplyDeletewhat happened to Operation Feed the Nation OFN...i remember back then all students in my school were allocated portions in the school farm, where we planted Maize, yams ,groundnut as part of practical agriculture...There was actually a bumper harvest with so many tubers of yams, bags of corn, and many bags of groundnut
...the farm produce was shared to all students class by class and the remaining was taken to be sold at the local market.. THE GOVT SHOULD RE ENACT AGRIC PROGRAMS WITH MECHANIZED METHODS...imagine the arable farm land all over Nigeria...
So many farmers in the United states..Go to Minessota , California , Oregon , North & South dakota , Texas
ReplyDeleteHow is Nigeria government tackling unemployment in the cities?
They should be organized and motivated to farm..The government should register all unemployed persons from age 17 -45.. this 60% of nigeria population.
Pay them a monthly stipend of N30,000 to work in government or private farms.
I bet nigeria will be the world highest exporter to agric products with in five ..
years
But the OGA is charge must not steal the salary of he workers , in usual 9ja way.(LOL)
So many farmers in the United states..Go to Minessota , California , Oregon , North & South dakota , Texas
ReplyDeleteHow is Nigeria government tackling unemployment in the cities?
They should be organized and motivated to farm..The government should register all unemployed persons from age 17 -45.. this 60% of nigeria population.
Pay them a monthly stipend of N30,000 to work in government or private farms.
I bet nigeria will be the world highest exporter to agric products with in five ..
years
But the OGA is charge must not steal the salary of he workers , in usual 9ja way.(LOL)