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Juliana Taiwo-Obalonye, Abuja
The Federal Government has announced that it will revisit crude oil benchmark price of $53 per barrel used to prepare the 2020 budget.
This announcement came on the heels of the crash of crude oil price in the inte bowl market from $53 per barrel to $31 per barrel.
The Federal Government had last week hinted that its likely to review the N10.59 trillion 2020 budget passed by the National Assembly on December 5 and signed into law on December 17th, 2019 by President Muhammadu Buhari.
The 2020 budget was predicated on crude oil bench of $57 per barrel and daily production capacity of 2.1 million barrels per day.
Meanwhile, President Buhari has set up committee, headed by the Minister of Finance, Budget and National Planning, Zainab Ahmed to review impact of coronavirus on the economy.
Members of the committee are: Minister of State Petroleum Resources, Timipre Sylva, and his colleague Minister of State, Budget and National Planning, Clement Agba.
Others are Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mela Kyari.
The committee is to submits its report Tuesday or Wednesday at the Federal Executive Council meeting.
Addressing State House Correspondents after they met with President Buhari, the finance minister said: “We just met with the President to discuss with him on the matter of the impact of the coronavirus on our economy.
“Mr. President has formed us into a committee with the minister of State, Petroleum Resources, the Central Bank governor, GMD NNPC and myself as members.
“Our mandate is to make a very quick assessment of the impact of this coronavirus on the economy especially as it effects the crude oil price.
“We will be writing a report and brief Mr. President tomorrow (Tuesday) or Wednesday morning. After that we will also have more substantial information for the press.
“It is very clear that we will have to revisit crude oil benchmark price that we have of $57 per barrel. We have to revisit it and lower the price. Where it will be lowered is the subject of this committee. What the impact will be on that is that there will be reduced revenue to the budget at it will cut the size of the budget. The quantum of the cut is what we are supposed to assess as a committee.”
On the issue of the country engaging Russia, Sylva said “we as a member of OPEC are not in a position to take that engagement on our own unilaterally. There was a disagreement between OPEC and OPEC+, it’s not just Russia, but the biggest producers within OPEC and OPEC+ are Saudi Arabia and Russia.
“We believe that in the coming days when all of us would have begun to see effect of the reduction of prices, OPEC and OPEC+ might need to meet again and reconsider our positions.
“Meanwhile, we expect also that a lot of discussions are going on at the level of Saudi Arabia and Russia, but as Nigeria, we are not in a position to begin to engage members on this matter.”
