Nigeriaâs Bonny Light crude dropped by 10.6% to $73.53 per barrel from $84.02 in January, sending fears over the performance of the Nigerian governmentâs 2025 budget and revenue target.
The 2025 budget benchmarked oil prices at $75 per barrel, oil production at 2.06 million barrels per day, and a revenue projection of N36.35 trillion, of which 56% was projected to come from oil sales.
Experts say the decline in oil prices represents a 6.6% potential dip in Nigeriaâs oil revenue target, worsened by declining oil output below 2.06mbpd.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that Nigeriaâs oil output stood at 1.737 million barrels per day in January this year, from 1.667 million recorded in December 2024.
Muda Yusuf, the chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE) disclosed that the fall in energy prices has grave implications for Nigeriaâs revenue.
He revealed that the fall may impact negatively on Nigeriaâs budget and revenue.Â
He, however, said that the decline also presents a good opportunity for businesses as a decline in crude oil price could reduce the cost of petroleum products such as petrol, diesel and aviation fuel.
Vanguard reports that the national president of the Oil and Gas Service Providers Association of Nigeria (OGSPAN) Coleman Obasi said apart from affecting Nigeriaâs budget negatively, low crude oil prices lead to low prices of petroleum products.
He said the decline could also lead to a decrease in refinersâ costs.
Other experts also revealed that the drop might affect the Nigerian currency negatively.
According to them, the countryâs foreign exchange reserve will suffer as most crude oil sales are deposited in the reserves used to defend the naira from depreciation and volatility.
TimesNow.com.ng reported that Nigeriaâs FXÂ reserves depreciated by about $1.38 billion in 2025 amid CBNâs battle to combat naira decline and other international payments.
Data from the Central Bank of Nigeria (CBN) shows that as of September 2024, the Nigerian government have spent over $5.8 billion on debt-servicing and other international payments.
Crude oil sales are a major source of foreign exchange for the country.
The decline in oil prices will likely affect sales, the FX reserves and the value of the naira, analysts say.
TimesNow.com.ng earlier reported that Nigerians may experience a rise in petroleum product prices in the coming days due to the increase in the cost of Brent, the global benchmark for crude.
Crude oil price is a key commodity that sets the price of refined petroleum products.
According to reports, on Sunday, January 12, 2025, Brent crude price reached $79.76 per barrel.
Source: TimesNow.com.ng
