Excess Crude Income Hits $65.4m Daily
Nigeria’s excess crude account is set to swell as the price of Bonny Light leaps towards $75 per barrel in the international market. The price of Bonny Light stood at $74 per barrel in the market yesterday, showing only $1.0 below the expected target.
The price of Brent and WTI also stood at $74.06 and $68.40 per barrel respectively in the international market while the price of OPEC basket of 14 crudes stood at $70.96 per barrel. OPEC stated that: ‘’The price of OPEC basket of 14 crudes stood at $70.96 a barrel on Thursday, compared with $69.39 the previous day, according to OPEC Secretariat calculations.
‘’The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).’’
The Nation generates $28.06 per barrel in excess of the $45 per barrel reference price of the 2018 budget. This amounts to an excess revenue of $64.5 million daily as the Nation had budgeted to produce 2.3 million barrels per day in the budget. President Muhammadu Buhari had stated in his budget address that: “The 2018 Budget Proposals are for a Budget of Consolidation. Our principal objective will be to reinforce and build on our recent accomplishments”.
Specifically, we will sustain the reflationary policies of our past two budgets. In this regard, the key parameters and assumptions for the 2018 Budget are as set out in the 2018-2020 Medium Term Expenditure Framework, MTEF and Fiscal Strategy Paper, FSP. These include: Benchmark oil price of US$45 per barrel; Oil production estimate of 2.3 million barrels per day, including condensates; exchange rate of N305/US$ for 2018; real GDP growth of 3.5 per cent; and inflation rate of 12.4 per cent”.
“The Federal Government’s estimated total revenue is N6.607 trillion in 2018, which is about 30 per cent more than the 2017 target. As we pursue our goal of revenue diversification, non-Oil revenues will become a larger share of total revenues. In 2018, we project Oil revenues of N2.442 Trillion, and non-Oil as well as other revenues of N4.165 Trillion.’’.
There are indications that the market will witness increased stability as the Organisation of Petroleum Exporting Countries, OPEC and non-members of OPEC continue to cut their output. In its statement sent to Vanguard, the organisation added that: ‘’The OPEC/Non-OPEC Joint Ministerial Monitoring Committee, JMMC, convened in Jeddah, the Kingdom of Saudi Arabia, for its eighth meeting, on 20 April 2018.’’
It stated that: ‘’Based on the Report of the Joint Technical Committee, JTC for the month of March 2018, following successive months of record-breaking performances, OPEC and participating non-OPEC countries have achieved a conformity level of 149 per cent with their voluntary production adjustments, the highest level so far.