The international oil benchmark, Brent crude, plummeted to its lowest level in more than a year on Monday, trading below the Federal Government’s benchmark for the 2020 budget, as the coronavirus outbreak hit fuel demand in China.
The 2020 budget, which was signed by president Muhammadu Buhari in December, was based on oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.
The federal government is looking to generate N2.64tn oil revenue, which is 32.34 per cent of expected total revenue for this year, with non-oil revenue projection being N1.80tn.
Brent, against which Nigeria’s crude oil is priced, had risen above $70 per barrel early last month following the killing of an Iranian general, Qassem Soleimani, by the US on January 3.
But the price, which has been on a downward trend since the coronavirus broke out last month, plunged by $2.23 to $54.39 per barrel as of 9.20pm Nigerian time on Monday. It fell below the $60 per barrel mark on January 28.
The Organisation of Petroleum Exporting Countries and its allies, led by Russia, would hold a technical meeting on Tuesday (today) and Wednesday, several weeks earlier than planned, to discuss the impact of the deadly coronavirus on oil demand, S&P Global Platts quoted OPEC sources as saying.