Oil crash: Nigeria may lose $8.63bn in six months

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Nigeria’s economy may slide into another recession as the sudden crash in crude oil prices is set to wipe $8.63bn from the expected earnings accruable to the country in six months.

Already, the nation has lost over $335.7m after the crude oil price plunged last week, hovering between $30 to $36 per barrel.

This is based on the 2020 budget benchmark of $57 per barrel.

Nigeria could lose about $8.63bn to the crude price crash as Goldman Sachs in a report predicted that oil price would stay near $30 per barrel in the next six months, amid Saudi Arabia-Russia price war.

Goldman Sachs Group Inc is a renowned investment management firm and its crude oil price prediction was released on March 11, 2020.

Should the price of crude stay around $30 per barrel range, another economic recession in Nigeria may set in, economic experts and Nigeria’s major oil sector unions have stated.

The crude oil sales make about 90 per cent of foreign exchange earnings in Nigeria.

The country’s 2020 budget passed in December last year was calculated on crude production of 2.18 million barrels a day at a price of $57 per barrel.

But the benchmark Brent crude futures traded at $35.44 per barrel on Sunday morning. It had dropped by 20 per cent at slightly above $36 a barrel it traded last week Monday.

The commodity has traded at an average price of about $35 per barrel since the recent price crash.

At 2.18 million barrels per day and a cost of $57 per barrel, as captured in the 2020 budget, Nigeria earned about $124.26m daily.

 

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