NIGERIA may lose an about $24.17 billion (N4 trillion) within the next one year if crude oil prices fail to rebound.
Based on the current $68.53 a barrel price against $101.64 which the commodity was traded in June, the revenue loss would be $33.11 per barrel; $2.01 (N340 billion) a month; and $24.17 billion a year, at a production level of two million barrels a day or 730 million barrels a year. With this analysis, the country could lose about $24.17 billion in the next one year or monthly average lose of $2.01billion (N340 billion).
Also, on a general note, members of the Organisation of Petroleum Exporting Countries (OPEC) could lose $362.555 billion a year, or $3.6 trillion over a decade, should the decline in prices of crude oil persist.
Besides, gross federally- collected revenue decline below the 2014 monthly budget estimate in the month of August, according to the Central Bank of Nigeria (CBN).
Specifically, Nigeria’s gross oil receipts has decreased from N597.12 billion, which it recorded in the month of July to N578.79 billion in August this year.
Essentially, if OPEC members produce 30 million barrels of crude oil per day, or 10.950 billion barrels a year, with the January 2015 WTI crude oil contract trading at the CME, and a production decline of $33.11 per barrel, the lost revenue to the cartel could reach $362.555 billion a year, or $3.6 trillion over a decade.
Before now, Nigeria realised about $40 billion (N6.4 trillion) from crude oil export between January and June 2014, having earned N13.4 trillion in 2013.
The latest monthly Economic Report by the Central Bank of Nigeria, CBN, showed that about N622.9 billion was made from gross oil revenue receipts for April alone this year.
The price of OPEC basket of 12 crudes stood at $66.27 a barrel, compared with $67.31 the previous day.
Already, the country has suffered decline in revenue for the month of August.
At N578.79 billion, gross oil receipts, which constituted gross federally- collected revenue, decline below the 2014 monthly budget estimate in the review month by 67.3 per cent of the total revenue, was lower than both the monthly budget estimate and the receipts in the preceding month by 3.1 per cent.
The decline in oil receipts relative to the monthly budget estimate was attributable to fall in receipts from crude oil and gas exports.
Available data showed that estimated federally- collected revenue in August 2014, at N859.61 billion, was lower than both the monthly budget estimate and the receipts in the preceding month by 5.2 and 13.5 per cent, respectively.
The decline in estimated federally- collected revenue (gross) relative to the monthly budget estimate was attributable largely to the shortfall in receipts from non-oil revenue during the reviewed month.
Meanwhile, the Federal Government has foreclosed resort to printing money or imprudent borrowing as it adjusts to lower prices of oil, Finance Minister, Dr. Ngozi Okonjo-Iweala has said.
“This is not the first time this country has gone through lower oil prices and it will not be the last,” she said at a press conference in Abuja, yesterday.
“We should avoid the kind of fear that will paralyse us or make us do the wrong things out of fear and alarm she added.”
The country, which is facing general elections in February, lowered its proposed budgeted oil price last week to $65 per barrel, the second cut in less than a month, signaling that government revenue is set to plunge in Africa’s biggest crude producer.
Any borrowing will be done “judiciously,” Okonjo-Iweala stressed that the pangs of the falling oil price would be mitigated through increased tax revenue, judicious spending and an expanding private sector.
Global oil prices have plunged more than a third since June, prompting monetary policy makers to devalue the naira for the first time in three years, and threatening to erode public finances in a country that relies on crude sales for 70 percent of government income.
Guardian Nigeria
