2023 Budget: Nigeria raises crude oil benchmark to $75 per barrel

Following the passage of the N21.8 trillion 2023 Budget by Nigeria’s National Assembly, the country has increased its crude oil benchmark to $75 per barrel from the previous $70 per barrel.

Nairametrics also gathered that the country’s crude oil production for 2023 has been pegged at 1.69 million barrels per day.

The Federal Government believes that with these benchmarks, the country will be able to fund the 2023 budget.

However, a staff of Nigeria’s Debt Management Office (DMO) told Nairametrics on December 29 via a phone call that it will be difficult for the country to service its debts and meet all its expenditures even if it increases oil production.

According to the staff, the government is still borrowing and the country’s crude oil production is yet to increase beyond 1.4 million barrels per day (plus condensates), based on November stats. 

Meanwhile, Oil and Gas analyst, Kayode Oluwadare, told Nairametrics that it is not out of place for the government to increase the crude oil price benchmark to $75 per barrel.

According to him, the government may seem too optimistic to several critics, but the $75 per barrel projection is in order. He said:

“Every resource-rich country sees benchmarking their budget to crude oil prices. over 90% of our foreign exchange comes from crude oil, so, using crude sales to benchmark the budget is not out of place. It is important to understand that at some point, the prices could fluctuate and be higher or lower. However, the government expects $75 to be the average price for 2023, to balance the budget.”

In 2022, Nigeria recorded the lowest crude oil production data in recent years due to crude oil theft.

However, the Nigerian National Petroleum Company (NNPC) Limited has said it is collaborating with the country’s security agencies as well as third-party security outfits to tackle crude oil theft in the Niger Delta region.

During the 11th Practical Nigerian Content forum in Uyo, Akwa-Ibom state on December 6, 2022, the Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, claimed that Nigeria’s oil production as of December 6 was 1.59 million barrels per day.