Brent crude oil price, the closest to Nigeria’s sweet crude, hit $58.37 per barrel on the first trading day of 2017. The price which is the highest since July 2015 was based off a deal between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members to cut oil production, The Guardian reports.
For Nigeria, the oil price spike ignites the hope for an early exit from the current economic recession. Furthermore, it boosts confidence in the Federal Government’s ability to effectively implement its 2017 budget of N7.3 trillion with a benchmark crude oil price of $42.5 per barrel, oil production of 2.2 million barrels per day (bpd) and an average exchange rate of N305 to $1.
However, Nigeria has not recorded a change in oil production, as the difference between the current record of 1.9 million bpd according to Petroleum Resources Minister, Ibe Kachikwu and the 2017 budget benchmark remain wide apart. This is aside the fact that OPEC puts Nigeria’s output at 1.5 million bpd. Going by OPEC’s figures, Nigeria is currently lagging behind by 700,000 bpd resulting in an immediate shortfall of $40.7 million daily at $58.17 per barrel or 300,000 bpd, leading to a $17.5 million shortfall daily.