Considering the latest dip in the crude oil price at the international market, the Federal government of Nigeria may have to review the oil price benchmark for 2020 budget as Nigeria’s premium crude grade (bonny light), yesterday, crashed to $20.59 per barrel, the lowest in 18 years.
The latest price is about 31.4 percent below the revised 2020 budget oil price benchmark of $30 per barrel, indicating that the Federal Government may be forced to go back to the drawing board and effect another cut on the benchmark, barely two weeks after the first downward review.
The initial benchmark was $57 per barrel but the committee reviewed it downward to $30 two weeks ago following the rapid decline in global demand and price of crude oil. Effectively the new oil price of $20.59 per barrel has slashed about N1.68 trillion from the original expected oil revenue as contained in the 2020 budget, a development that may force further downward review of the expenditure provisions.
Other premium oil grades including Brent and WTI recorded marginal price drops, trading at $25.74 and $20.11 against last Friday price of $27.95 and $21.51. Meanwhile, industry watchers are projecting further decline in Bonny Light to below $20 as the Coronavirus, (COVID-19) pandemic continues to ravage world.