Budget benchmark stays despite increasing oil prices

The federal government on Monday said it was not in a hurry to adjust its benchmark oil price for the 2020 budget following the attack on Saudi Arabia’s oil facility, which had resulted in a rebound in oil price.

Zainab Ahmed, the minister of finance, said this on Monday while answering questions from journalists at a media briefing on the forthcoming Nigerian Economic Summit.

The federal government had last week said that the 2020 budget would be predicated on a lower oil production of 2.18 million barrels per day and lower benchmark oil price of $55 per barrel.

In the 2019 budget, the budget benchmark was based on 2.3mbpd oil production and $60 per barrel benchmark.

The cut in oil price benchmark, according to the government, was done considering that there would be glut in the oil market which would result in a fall in prices.

However, since the attacks on the Saudi Arabian oil facility on Sunday, oil price had jumped from $56 per barrel to about $71 per barrel.

Ahmed described the attacks on the Saudi Arabian oil facility as worrisome, adding that if a county with such sophisticated security system could suffer such attacks, then Nigeria might be vulnerable.

She said the federal government would continue to monitor the situation in the global oil market and respond appropriately when the need arose.

She said, “We shouldn’t be rejoicing over the misfortune of others. If Saudi Arabia that has a sophisticated security system is affected in this manner, it means we are also vulnerable.

“So let us not be in a hurry to celebrate. And as the minister of state has said, we should also not be in a hurry to adjust the revenues.”

On the Nigerian Economic Summit scheduled to hold next month in Abuja, Ahmed said the summit had over the years helped to shape many of the reform policies underpinning the evolution of Nigeria’s economic growth and development.

She said through the summit theme, “Nigeria 2050: Shifting gears,” the government would be able to address issues of good governance as a path to sustainable human and economic development.

Ahmed said the forum would also provide a timely opportunity for a national economic review and create a consensus among all Nigerians on the need to ensure that Nigerians take advantage of the existing opportunities to increase productivity and create jobs.