ADVERTISEMENT
  • The Membership Club
  • PT Hausa
  • About Us
  • Advert Rates
  • Careers
  • Contact Us
Saturday, March 6, 2021
Premium Times Nigeria
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Opinion
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Parliament Watch
    • Panama Papers
    • Paradise Papers
    • AGAHRIN
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Opinion
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Parliament Watch
    • Panama Papers
    • Paradise Papers
    • AGAHRIN
Premium Times Nigeria
BUA Group Ad BUA Group Ad BUA Group Ad
ADVERTISEMENT
Crude oil extraction [Photo credit: Bloomberg]

Crude oil extraction [Photo credit: Bloomberg]

Nigeria’s bonny light crude slumps, trades at $12 amid supply glut

byOladeinde Olawoyin
April 18, 2020
3 min read

Amid the uncertainties thrown up by the coronavirus pandemic, prices of Nigeria’s benchmark crude oil grade, Bonny Light, slumped significantly earlier in the week.

A Bloomberg report said that it traded at $12 and $13 per barrel between Monday and Friday.

The report relied on data gathered from traders monitoring the West African market.

The price is $15 lesser than the dated price of Brent crude, the global benchmark of crude oil which traded at $28 Friday, according to details on oilprice.com.

Last month, PREMIUM TIMES reported how Nigeria cut its official selling price of crude oil to record lows as the country looked to clear a glut of unsold April-loading cargoes before announcing its May programme.

Details showed that the Nigerian National Petroleum Corporation (NNPC) cut its April official selling prices for Bonny Light and Qua Iboe by US$5/bbl.

The current selling price is below the cost of production for Nigerian crude producers which is estimated at an average of $22. It also falls short of the revised budgetary benchmark of $30 per barrel.

Nigeria relies essentially on crude oil to fund its budgetary and address numerous other fiscal concerns. It also represents about 90 per cent of Nigeria’s source of foreign earnings.

Lockdown Effect

Despite the supply cut by the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+), lockdowns in most cities of the world have led to a drop in demand for crude oil.

RelatedNews

Zamfara’s no-fly-zone will improve North-west security – Ganduje

COVID-19: How cancelled sports events is affecting Nigerian athletes

“Send a dollar, get five naira free”: CBN launches forex promo

War Crimes: Witness shows scar as Massaquoi trial hears of killing, rape

READ ALSO: Coronavirus: IMF pledges ‘swift attention’ to Nigeria’s loan request

As factories, industries and machines grind to a halt in several countries, airlines have also had to shut down operations.

“The market is simply responding to the forces of demand and supply precipitated by the COVID-19 pandemic,” Bloomberg quoted the Nigerian National Petroleum Corporation to have said in a statement.

“We are working assiduously to guarantee a steady market for our crude in the short and long term.”

Dangote adbanner 728x90_2 (1)

Traders also report that 10 million barrels of crude made available for sale in April are still unsold with another 60 million expected to hit the market in May.

The vast majority of unsold supplies are Nigerian, traders said, and the glut is made worse because of the drop in demand from traditional European buyers.

Reports say it is not just West African oil markets that are struggling in the Atlantic Basin. Principally due to so much European demand halted by the virus, grades in the North Sea and the Mediterranean are also affected.

There are concerns that the development may pose more challenges to Nigerian fiscal policymakers, as the nation struggles to address economic uncertainties. This is because the prevailing prices are well below the nation’s fiscal breakeven, assessed by Fitch Ratings at about $133 a barrel.

Nigerian Economy

Last December, the Nigerian Senate passed the 2020 budget into law, approving N10.59 trillion as aggregate expenditure. A breakdown of the budget figures showed that N560.4 billion was budgeted for statutory transfers, N4.84 trillion for recurrent expenditure, N2.46 trillion for capital expenditure and N2.72 trillion for debt servicing.

The fiscal deficit of the budget was put at N2.28 trillion while the deficit to Gross Domestic Product (GDP) ratio was 1.52 per cent.

ADVERTISEMENT

The two major key assumptions upon which the 2020 budget was premised are a crude oil production of 2.18 mbpd and oil price benchmark of $57.

The crash in prices, however, forced the government to make significant changes to its budgetary projection.

Last month, the government adjusted its 2020 budget amid measures to contain the effect of the outbreak of coronavirus on the nation’s economy.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said the government will implement a 50 per cent cut in revenue from privatization proceeds. The government also announced a cut in crude oil benchmark price, down to $30.

Earlier in the month, the government went further to cut down the 2020 budget by over N320 billion and proposed a new budget of N10.27 trillion. This was against the N10.59 trillion passed by the national assembly.

The new budget proposal has been sent to the National Assembly for consideration and passage, reports said.

The new budget proposal reduced the oil benchmark from $57 per barrel to $30 per barrel while the oil production volume was reduced from 2.18 million barrels to 1.70 million barrels.

The revenue projection for the 2020 budget was also reduced by N3.3 trillion (about 39 per cent) from the initially approved amount of N8.41 trillion to N5.08 trillion.

The exchange rate was, also, increased from N305 to N360 to a dollar, based on the devaluation exercise by the Central Bank of Nigeria.

  • WhatsApp
  • Tweet
  • Email
  • Print
  • Telegram
  • More
  • Share on Tumblr
  • Pocket

Support PREMIUM TIMES' journalism of integrity and credibility

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.

Donate


TEXT AD: To advertise here . Call Willie +2347088095401...



JOIN THE CONVERSATION

  • Disqus (2)
premiumtimes



PT Mag Campaign AD

Previous Post

Coronavirus: Anger over disregard for social distancing at Abba Kyari’s burial

Next Post

Kyari: Obasanjo, Jonathan, Atiku, Lawan, others mourn

Oladeinde Olawoyin

Oladeinde Olawoyin

Oladeinde Olawoyin reports Business & Economy, Development and Lagos Metro at PREMIUM TIMES. A First Class graduate of Mass Communication from the University of Ilorin, Ilorin, he was nominated in the journalism category of The Future Awards Africa in 2017. Aside maintaining a column titled ‘SATURDAY SATIRE’, he also writes art and culture pieces on weekends. Twitter: @Ola_deinde

More News

Convicted fraudster, Henry Asuquo

Court convicts fraudster who disguised as soldier to dupe victims

March 6, 2021
Nigeria Stock Exchange trading floor

NSE Weekly: Stock market slips by N245bn as fixed-income yields lure investors away

March 6, 2021
Athletes used to illustrate the story.

COVID-19: How cancelled sports events is affecting Nigerian athletes

March 6, 2021
Naira and Dollars

“Send a dollar, get five naira free”: CBN launches forex promo

March 6, 2021
President Muhammadu Buhari receives the AstraZeneca COVID-19 vaccine. [PHOTO: Presidency]

Buhari urges Nigerians to get COVID-19 vaccination after receiving jab

March 6, 2021
ACompleted phase 1 housing units at Earthpoint and Modern Shelter estate

SPECIAL REPORT: Years after paying millions to developers, Abuja residents stranded without homes

March 6, 2021
Next Post
Abba Kyari laid to rest

Kyari: Obasanjo, Jonathan, Atiku, Lawan, others mourn

R-L: Lagos State Governor, Mr. Babajide Sanwo-Olu; Commissioner for Health, Prof Akin Abayomi; Secretary to the State Government, Mrs. Folasade Jaji and Permanent Secretary, Ministry of Health, Dr. Olusegun Ogboye, during a press briefing on the first case of Coronavirus in the State at Lagos House, Marina, on Friday, February 28, 2020.

Coronavirus: Lagos records three more deaths

Discussion about this post

Search

#EndSARS: Latest Updates




Polaris Bank


JAIZ Ad


Access Bank Ad


NITDA Ad





Glo Ad

Subscribe to News via Email

Enter your email address and receive notifications of news by email.

Join 1,629,691 other subscribers.

Advertisement






netherland biz school Advert



Zenith Advert

ADVERTISEMENT

Our Digital Network

  • PT Hausa
  • Election Centre
  • Human Trafficking Investigation
  • Centre for Investigative Journalism
  • National Conference
  • Press Attack Tracker
  • PT Academy
  • Dubawa
  • LeaksNG
  • Campus Reporter

Resources

  • Oil & Gas Facts
  • List of Universities in Nigeria
  • LIST: Federal Unity Colleges in Nigeria
  • NYSC Orientation Camps in Nigeria
  • Nigeria’s Federal/States’ Budgets since 2005
  • Malabu Scandal Thread
  • World Cup 2018
  • Panama Papers Game
  • Our Digital Network
  • About Us
  • Resources
  • Projects
  • Data & Infographics
  • DONATE

All content is Copyrighted © 2020 The Premium Times, Nigeria

No Result
View All Result
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Panama Papers
    • Paradise Papers
    • Parliament Watch
    • AGAHRIN
  • Opinion
  • PT Hausa
  • The Membership Club
  • Dubawa
    • Dubawa NG
  • About Us
  • Advert Rates
  • Careers
  • Contact Us
  • Digital Store
  • DONATE

All content is Copyrighted © 2020 The Premium Times, Nigeria

Our website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.