Abuja - The federal government has slashed the oil price assumed in its
2015 budget by 11 percent to $65 a barrel from $73, in light of lower
world oil prices, a Finance Ministry spokeswoman said on Thursday.
It was the second time in a month the benchmark has been cut, after initially being lowered from $78 a barrel.
Other
oil exporting countries including Russia and Mexico have said they
expect oil prices to be lower next year than assumed in their budgets,
which may be revised.
The spokeswoman gave no further details but
said Finance Minister Ngozi Okonjo-Iweala was working on a statement.
No time was given for when the statement would be issued.
Nigeria
depends on oil for around 75-80 percent of government revenues and its
finances have been hammered by a steep drop in oil prices since June.
Its
oil money is distributed between three tiers of government -- local,
state and federal, with the federal portion being used to fund finance
ministry budgets, along with tax receipts. The budget assumes a
benchmark price that is usually conservative, so money over and above
that is deposited into an oil savings account to cushion against shocks.
The minister has often wrestled with parliament to keep the benchmark
low and accumulate more savings, but the Excess Crude Account (ECA) is
all too easily raided for spending. It has declined by billions of
dollars to around $4 billion over the past two years even while oil
prices were at record highs.
The allure of Africa's biggest
economy to foreign investors has been growing, especially for buyers of
its attractively priced debt, but they worry about its tendency to
squander its oil windfall in bloated government spending and patronage.
Nigeria's
central bank devalued the naira by 8 percent and raised interest rates
sharply last week, as it sought to stem losses to its foreign reserves
from defending the currency against weaker oil prices..
The naira has consistently tested the lower end of the new band.
Okonjo-Iweala
has said Nigeria still has funds to pay salaries and keep debt
obligations but with crude likely to fall, the government would increase
taxes on luxury items and ban non-essential government travel to cut
expenditure.
Source: News24
No comments:
Post a Comment