By Ediri Ejoh

MORE trouble continues to loom for the  Federal Government’s budget 2020, over global crash in crude oil price, which saw the price of nation’s, Bonny light tumbling further from $46 per barrel,  to $37.22 a 19.66 percent decline.

This was coming on the heels of a presidential committee action for review of the budget.

It would be recalled that the N10.4 trillion budget 2020 is based on oil revenue projection of N2.64 trillion predicated on crude oil price of $57 per barrel and oil production of 2.18 million barrels per day.

READ ALSO: House of Reps sets up committee on coronavirus, oil price

Brent crude which is the international benchmark for crude oil, traded at $36.89 per barrel. This figure is $21 lower than Nigeria’s $57 crude oil price benchmark in the 2020 budget.

The United States West Texas Intermediate, WTI, traded at $33.56 per barrel. According to the International Energy Agency (IEA), global oil demand will witness its first contraction in a decade because the Coronavirus outbreak has resulted in a partial shutdown of the Chinese economy.

With the crash in crude oil expected to persist, the revenue shortfall may worsen and hence further undermine successful implementation of the 2020 budget.

The fall in oil price is said to have caused panic within the Nigerian polity. The Minister of Finance Zainab Ahmed, called for a review of the budget.

Already, experts fear Nigeria could slide into a recession if the price of crude continues to decrease.
Meanwhile, the Major Marketers Association of Nigeria, MOMAN, has called on the federal government to consider removing subsidy on petroleum products, especially because of current low price of oil in the global market.

In a statement sent to Vanguard, Chairman of MOMAN, Mr. Tunji Oyebanji, stated that the N450 billion government set aside for subsidy in the 2020 budget would not add value to the nation’s downstream sector and the lives of Nigerians. He advised government to use such huge amount pegged for subsidy in the budget to develop other sectors in order to impact positively on many Nigerians.

Vanguard Nigeria News