By Milcah Tanimu
The 2024 federal budget faces a potential threat as the price of Nigeria’s Bonny Light dropped to $76.53 per barrel from over $88 per barrel in the global oil market. The 2024 budget was based on a benchmark of $77.96 per barrel and 1.78 million barrels per day. Concerns arise among stakeholders regarding the impact on budget execution if this trend continues.
The Nigerian Upstream Petroleum Regulatory Commission reported a 7.4% decline in oil production to 1.25 million barrels per day in November. Oil theft remains a significant issue, with the Nigerian National Petroleum Company Ltd recording cases of theft between December 2 and December 8, 2023.
Despite the challenges, the Minister of State Petroleum Resources, Senator Heineken Lokpobiri, expressed optimism that oil production in the country would surpass the 2024 budget target of 1.7 million barrels per day. He emphasized the government’s commitment to creating an enabling environment for stakeholders in the oil and gas sector.
The ongoing trend of Nigerian crude flowing to Europe has increased, filling supply gaps left by the ban on Russian crude. Stakeholders call for more investment in the oil and gas sector and diversification of the economy to mitigate the impact of oil price fluctuations.
In a related development, BudgIT raised concerns over perceived discrepancies and provisions in the 2024 budget, calling for a thorough review and transparency in budget implementation.