Breaking News: Budget 2024 Faces Uncertainty As Oil Prices Decline To $76.53 per Barrel

With the 2024 federal budget currently undergoing legislative scrutiny in the National Assembly, the price of Nigeria’s Bonny Light dropped to $76.53 per barrel from its previous standing at over $88 per barrel in the global oil market. This significant decline is posing a substantial threat to the successful implementation of next year’s budget, which was initially set with a benchmark of $77.96 per barrel and 1.78 million barrels per day.

Concerns are rising among stakeholders as the prices of various crude oils, including Nigeria’s Bonny Light, continue to decrease, potentially impacting the funding of the 2024 budget. The ongoing screening of the budget by the National Assembly adds to the apprehension, with worries that if this downward trend persists, it could negatively affect the budget’s performance.

According to the Nigerian Upstream Petroleum Regulatory Commission’s latest report, oil production experienced a 7.4 percent decline to 1.25 million barrels per day in November compared to 1.35 million barrels per day in September. The report also highlighted a 6.1 percent drop in total production, including condensate oil, to 1.466 million barrels per day last month, down from 1.56 million barrels per day recorded in September.

Despite efforts to combat oil theft, the Nigerian National Petroleum Company Ltd reported numerous cases of theft between December 2 and December 8, 2023. The company uncovered 51 illegal refineries, 29 illegal connections, and eight vessels involved in Automatic Identification System (AIS) infractions. The incidents occurred in various regions, raising concerns about the persistent challenges in curbing oil theft, pipeline vandalism, and illegal refining.

Mazi Colman Obasi, the National President of the Oil and Gas Service Providers Association of Nigeria (OGSPAN), emphasized the need for diversifying Nigeria’s economy while addressing the issues of oil theft, pipeline vandalism, and illegal refining to ensure efficient production, export, and revenue generation.

In contrast, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, expressed optimism that oil production in the country would surpass the 2024 budget target of 1.7 million barrels per day. Speaking during a stakeholder’s interactive session, he asserted that Nigeria has the capacity to increase crude oil production to two million barrels daily. The Minister committed to collaborating with stakeholders to enhance the country’s oil and gas sector, emphasizing the government’s dedication to creating a business-friendly environment and ensuring a competitive fiscal regime globally. Senator Lokpobiri highlighted the administration’s track record of increasing oil production and expressed the ambition to sustain this growth trajectory. He called for open dialogue with stakeholders to address concerns and work towards mutual agreement and improvement.

Source: Bushradiogist