HURRAY! Oil prices beat budget benchmark

Global crude oil prices finally surpassed Nigeria’s budgetary benchmark on Monday, trading above $39 per barrels.

The price of Brent crude – the global oil benchmark – rose an all-year high at $39.50 on Monday, from $27.10 on January 20, the lowest for Brent in 2016.

Brent crude opened 2016 at a high of $38.99 on January 4, 2016, though it traded at $36.77 on the same day, and closed the month around $35 per barrel.

It opened February at $34.24and closed at $35.97

As at Friday, Nigeria’s bonny light, which is the third most expensive oil in the Organisation of Petroleum Exporting Countries (OPEC) basket, traded at a record high of $35.76 per barrel.

The Monday price of Nigeria’s crude has not been quoted by the Central Bank of Nigeria (CBN), but sources say the price may surge to the budget benchmark region of $38.

OPEC secretariat figures released on Monday show that the daily basket price stood at $32.34 a barrel Friday, March 4 2016, compared with $31.61 the previous day.

Nigeria’s 2016 budget was benchmarked at $38 per barrel against major criticism across the nation, following December 2015 prices of about $34 per barrel.

Udo Udoma, minister for budget and national planning, had initially said low crude oil prices would not affect the 2016 budget, insisting that the budget is achievable.

“Our budget is achievable; we have ongoing reforms targeted at diversifying our revenue base away from single oil commodity economy,” Udoma said in January.

A week ago, Udoma said the country may have to review the budget benchmark as early as June, based on the recurrently low crude oil prices.

“The benchmark of $38 per barrel of price of oil is not sacrosanct because of the subsisting global environment,” he had said.

“If at mid-year there is no improvement, we will come back to you for mid-term review. The review may come as quickly as June this year.”