Oil price drops below budget benchmark, as output stagnates

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Nigeria’s 2024 national budget is under significant funding pressure due to a sustained decline in oil prices and stagnant crude oil output. With over 70% of the national budget funded by oil revenue, the recent drop in the price of Bonny Light to $76.54 per barrel, below the budget reference price of $77.97 per barrel, poses a substantial shortfall.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Organization of Petroleum Exporting Countries (OPEC) have reported the country’s oil output at 1.4 million barrels per day (bpd) and 1.28 million bpd, respectively, far below the budgeted benchmark of 1.7 million bpd.

Concerns over Nigeria’s oil performance have heightened as the country grapples with decreased oil production and lower prices. The Oil and Gas Service Providers Association of Nigeria (OGSPAN) emphasizes the need to boost oil production and protect it from theft to meet budgetary targets.

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, highlights the challenge of illegal refining and its detrimental impact on the environment and economy. He calls for collective action to combat this menace and stressed that the benefits of illegal refining are insufficient for local communities and detrimental to the nation’s resources.

Source: Vanguard

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