Oil slide: LCCI, others urge Senate to review oil benchmark in 2016 budget …agitate for oil at $25 per barrel


Stories by Oluwagbenga Bankole

Following the continuous drop in global crude oil prices which has continued to bite harder on the oil industry, Lagos Chamber of Commerce and Industry (LCCI) and stakeholders in the Nigerian oil industry have urged the Senate to change the Nigeria oil benchmark in 2016 budget from $38 to $25 dollar per barrel.

The Federal Government pegged the benchmark oil price for the 2016 budget at $38 per barrel with an estimated daily output of 2.2, but global oil prices have dropped from $40 per barrel to less than $30 per barrel between the time President Muhammadu Buhari presented the budget to the Senate and now.

Speaking exclusively with Nigeria NewsDirect, the Director General of LCCI Mr. Muda Yusuf said that the $38 per barrel is obviously no longer realistic because if you are setting a benchmark what should normally happen is that the benchmark should be lower than the current price.LCCI

He said that the current crude oil benchmark in the budget needs to be reviewed because the price is higher almost like $10 to the current price.

“What has happened is that at the time the budget was being prepared, the $38 per barrel was still looking okay, but the $38 has been overtaken by events by the time the President was submitting the budget to the Senate,” he noted.

Yusuf who was optimistic that the Senate will adjust the price, said the price has to be conservative, adding that $25 per barrel is okay.

The Managing Director of Zeefacto Oil, Mr. Jeff Mill said that the Senate need to review the price because it is not realistic.

According to him, the $38 per barrel benchmark does not portray today’s price in the market, saying that it is unfortunate that the price is going lower.

While speaking with our correspondent, the Managing Director of Superpoint Limited Mr. Charles Ngoka believed that the $35 per barrel benchmark is no longer realistic.

Ngoka charged the Senate to change if to $25 per barrel considering the continuous drop of the oil in global market.


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