BEVERLY HILLS, March 9, (THEWILL) – President Muhammadu Buhari Monday responded to the drastic crash of crude oil in the international markets by constituting a presidential committee to review the 2020 budget and the oil benchmark and recommend realistic options that will make the document significantly implementable.
The Nigerian blend, Bonny Light closed at $46.33 Monday from about $56 last week, while Brent Crude closed at $34.36 and the OPEC basket closed at $48.33 after brutal day in the global equities and commodities markets.
The N10.59 trillion 2020 budget which was approved by congress and signed by Buhari in December last year projected the price of crude at $57pd at an exchange rate of N305-$1.
Analysts predict a further crash in prices mainly fueled by disagreements between two powerful players – Russia and Saudi Arabia – over production cuts in response to the glut caused by the coronavirus.
Buhari met with the committee members Monday inside his office at the presidential villa, Abuja. Governor of the central bank, Godwin Emefiele, Finance Minister, Zainab Ahmed, Minister of State for Petroleum Resources, Timipre Sylva, Minister of State for Finance, Clement Agba and the Group Managing Director of the Nigeria National Petroleum Corporation, Melee Kyari met with Buhari to discuss the matter.
“There will be reduced revenue on the budget and it will mean cutting the size of the budget,” the Finance Minister told reporters, after the meeting with Buhari.
Mr. Sylva also suggested an increment in oil output, which stands at around 2 million barrels per day but did not disclose by how much.
Zainab said the committee would determine the size of the budget and submit their position in the coming days.
THEWILL reports that Nigeria has been working frantically to diversify the economy and wean itself off solely relying on crude oil as the main source of revenue to fund expenditure. The Central Bank’s multi-billion naira credit to farmers has helped significantly cut rice imports and saved the country millions of dollars usually expended on importing the commodity.
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