Energy

Budget: Crude oil prices soar above 2018 benchmark by $22

With the crude oil price crossing $69 per barrel yesterday, the federal government has recorded $22 per barrel extra above its 2018 budget benchmark.

President Muhammadu Buhari presented $45/barrel as crude price benchmark in his appropriation bill but senate jerked it up to $47/barrel.

At the international market, the crude oil prices hit new multi-year highs on Wednesday as OPEC-led production cuts and healthy demand helped to balance the market.

U.S. West Texas Intermediate (WTI) crude futures were at $63.34 a barrel, up 38 cents, at 1440 GMT. Earlier prices rose to $63.67, the highest since Dec. 9, 2014.

Brent crude futures were at $69.02 a barrel, 20 cents above their last close. Brent earlier hit $69.37, the highest since May 2015.

Although the budget has not yet been approved by the national assembly, the extra amount is usually transferred to the excess crude account for the three tiers of government.

As of December 14, 2017, the Excess Crude Account had a balance of $2.317 billion. The account has always been a subject of controversy and between the tiers of government. In the past one of the major operations of the accounts was to fund the subsidies of the petrol.

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