Oil price slips below Nigeria’s new benchmark

Less than 24 hours after the Organisation of Petroleum Exporting Countries, OPEC, ended its 166th meeting, with a resolution to keep production quotas unchanged, oil prices dipped further close to $70 per barrel on Friday, surpassing a new benchmark proposed by the Nigerian government.

Latest OPEC Secretariat calculations on Friday showed that the price of its basket of 12 crudes stood at $70.80 dollars per barrel on Thursday, shedding $2.90, or 3.94 per cent from the $73.70 per barrel recorded on Thursday.

The development would be bad news for the Nigerian government battling to respond to one of the most serious oil price falls.

The federal government has proposed a new benchmark of $73 per barrel, from $78 approved in the 2014 budget.

The latest crash indicates the $73 benchmark may not be realistic, a concern earlier raised by the governor of the Central Bank of Nigeria, Godwin Emefiele.

Mr. Emefiele, had on Tuesday, at the end of the Monetary Policy Committee (MPC) meeting in Abuja described the new oil benchmark as “overly optimistic”, as the decline appears permanent.

But the Minister of Finance, Ngozi Okonjo-Iweala, has assured Nigerians that they have no reasons to panic, as the government has a comprehensive strategy, based on number of scenarios, to cushion the impact of the slide in crude oil price even if it were to drop to as low as $60 per barrel.

Credit: Premium Times