Nigeria who has been struggling with dwindling revenue due to the collapse in oil prices, is planning to revise its 2020 budget oil benchmark downwards for the second time. This was made known by the Finance Minister, Zainab Ahmed during a web conference on Tuesday about the impact of low oil prices on the country.
“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel” she said.
The planned $20 per barrel oil benchmark reversal was also announced in a tweet by Tolu Ogunlesi the Special Assistant to President Muhammadu Buhari of Nigeria on Digital & New Media . In addition, he said the reversal is subject to the approval of National Assembly.
Planned oil price benchmark for Nigeria’s 2020 Federal Budget: $20.
Original benchmark: $57
Oil Price (Brent): $29 today
— tolu ogunlesi (@toluogunlesi) May 5, 2020
Nigeria, an oil dependent economy, had in March reviewed its 2020 oil price benchmark which saw a $27 reduction per barrel from $57 per barrel to $30 per barrel. Government’s revenue has been heavily hit by the decline in oil prices as Nigeria’s Banner oil Bonny light continues to trade below the $30 per barrel benchmark.
In the same web conference the Finance Minister also said that Nigeria is in talks to differ debt service obligations to “2021 and beyond”.
According to her “it is not debt forgiveness, it’s just rescheduling of our obligations”. However, she did not provide details of the lenders with whom talks were held.