The price of Nigeria’s Bonny Light crude oil dropped by 10.6% to $73.53 per barrel from $84.02 per barrel on January 15, raising concerns over meeting the Federal Government’s 2025 budget revenue target. The budget, based on a $75 per barrel benchmark and an oil production target of 2.06 million barrels per day, aims to generate N36.35 trillion in revenue—with 56% from oil sales.
However, the recent price decline could lead to a potential 6.6% drop in oil revenue, a risk compounded by production levels falling short of the benchmark. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) shows that crude oil output in January 2025 stood at 1.737 million barrels per day, up slightly from 1.667 million barrels per day in December 2024, but still below the targeted 2.06 million barrels.
Reacting to the development, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), noted, “If energy prices fall, of course, that has implications for our own revenue. It’s likely to negatively impact our oil revenue but may be positive for businesses as reduced crude oil prices lower the cost of petroleum products like petrol, diesel, and jet fuel.”
Mazi Colman Obasi, National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), added, “Low crude oil prices will lead to lower petroleum product prices as refiners’ costs drop, which could also affect the execution of Nigeria’s 2025 budget.”
As the government works to meet its ambitious revenue targets, both industry stakeholders and policymakers remain vigilant about the broader economic implications of falling oil prices.
