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2023 Budget: Fear mounts as oil price drops 3% to $73.87 per barrel

As global oil prices fall on the back of declining economic growth, there is a rising fear that the federal government may not be able to meet its revenue projection from oil which is the country’s major funding source.

Nigeria’s premium oil grade, Bonny Light, reportedly dropped to $73.87 per barrel at the weekend from $76.37, recorded last week, indicating a fall of three per cent.

The Federal Government had benchmarked the 2023 budget at $75 per barrel and 1.8 million barrels per day, bpd, including condensate, which Nigeria has the capacity to produce between 300,000 – 400,000 barrels per day, bpd.

The drop in price that also affected other crudes was attributed to the global economic slowdown, especially some developed economies that buy commercial oil from Nigeria and other major oil nations.

Goldman Sachs – a research organization – disclosed that based on the global economic slowdown, it would not be possible for oil to hit $100 per barrel this year, which it had earlier predicted.

Goldman Sachs mentioned that the current poor state of the global economy had already culminated in the collapse of two big banks in the United States.

The report, which now expects oil price to hover around $94 per barrel in the coming 12 months, before landing at $97 per barrel in 2024, stated: “Oil prices have plunged, despite the China demand boom given banking stress, recession fears, and an exodus of investor flows.”

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