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Wednesday, 25 February 2015

Nigerian Senate cut oil price benchmark to $52 to adjust 15 pct lost revenue !

'As Nigerian senate committee tables 20 pct cut to budget oil price benchmark'

Office of Accountant General has disclosed that Nigeria's gross government revenue fell 15 percent to 416 billion naira ($2.07 billion) in January due to weaker oil prices, just as the nation's upper legislative house proposed cutting the oil benchmark in the 2015 budget.

In the proposal tabled earlier on Wednesday the cut would reflect about 20 percentage giving sharp reduction of selling price at $52 a barrel from its current $65.

A source at Senate Finance Committee told the newsmen that the upper house had debated the change proposed by the committee on Wednesday but had not yet reached a conclusion.

Speaking to Reuters, Jonah Otunla said "There was substantial loss of revenue due to a further drop in the prices of crude oil," and further re-affirmed that decrease in export volumes by one third between November and December 2014 had cost $159.88 million."

Reuters reported that "It is unclear where the cuts will fall, with capital expenditure already slashed to 10 percent of the budget and the government struggling to pay salaries of its bloated civil service."

"Nigeria's public finances have been hit by a sharp drop in world oil prices and irregular supply linked to pipeline vandalism. The government depends on oil for around 80 percent of revenues", the news agency reported.

It can be noted however that Nigerian finance ministry had previously said that the benchmark would not change.

Original reports from Reuters

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