The Federal Government lowered its budgeted oil price for a second time in less than a month, signaling government revenue is set to plunge in Africa’s biggest crude producer.
The medium-term budget plan for 2015 to 2017 will be based on an oil price of $65 a barrel, Paul Nwabuikwu, a spokesman for the Finance Ministry, said in an e-mail today. On Nov. 16, Finance Minister Ngozi Okonjo-Iweala had cut the benchmark price to $73 a barrel for 2015, down 5.8 percent from this year’s budget.
Global oil prices have plunged more than a third since June, roiling Nigeria’s markets, eroding foreign-currency reserves and prompting policy makers to devalue the naira for the first time in three years. With the government relying on crude exports for about 70 percent of its income, the slump in revenue may force authorities to rein in spending in an election year.
The revised budget plan was submitted to the National Assembly for approval, Nwabuikwu said.
via@Bloomberg