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The value of Nigeria’s flagship Bonny Light crude plummeted an additional 20 percent to $67 per barrel from its January 2025 level of $84.02, a steep descent reported on Wednesday, March 5, 2025, that has cast a lengthening shadow over the Federal Government’s aspirations to meet its 2025 budgetary revenue projections
Nigeria’s fiscal framework for 2025 hinges on an oil price projection of $75 per barrel, an anticipated production capacity of 2.06 million barrels per day, and a revenue ambition of N36.35 trillion—more than half of which is predicated on petroleum earnings—a blueprint now imperiled by market volatility.
The recent descent of Bonny Light crude to $67 per barrel, reported on March 5, 2025, signals a potential 10.7 percent shortfall in the Federal Government’s oil-derived income, a deficit compounded by current output languishing at 1.7 million barrels per day, well shy of the budgeted threshold—an ominous misalignment threatening fiscal stability.
Data published on Tuesday, March 4, by the U.S. Energy Information Administration pinpointed escalating stockpiles—reaching 3.6 million barrels by the close of February 2025—as a primary driver of the market’s downturn, a surplus that has exerted downward pressure on global prices.
The agency further identified the Organisation of Petroleum Exporting Countries (OPEC+) resolution to phase out production restraints beginning in April 2025 as an additional catalyst, a policy shift poised to amplify supply and further depress valuations.
In remarks on Tuesday, Dr. Muda Yusuf, Chief Executive of the Centre for the Promotion of Private Enterprise (CPPE), underscored the profound ramifications of this trajectory for Nigeria’s 2025 fiscal plan and its broader economic landscape, framing it as a pivotal challenge.
He cautioned that with oil prices dipping below $70 per barrel—against a budgeted $75—and projections suggesting a sustained or even deeper decline, particularly should U.S. President Donald Trump broker a resolution to the Ukraine-Russia conflict, the nation’s budgetary assumptions face significant jeopardy, casting a long shadow over economic resilience.
Read also: Europe Spent Money On Russian Oil Than Aiding Ukraine – Trump
“It has implications for the budget from a revenue point of view. It also has implications from a foreign exchange point of view. These are the two major implications that it has as far as our economic management is concerned.
“If we still stick to our expenditure profile, then it means that we’ll be looking at a much higher fiscal deficit than we have planned but that will not be advisable because deficits has a way of affecting macroeconomic stability.
“This often have very strong systemic impact on us pay a heavy price for unstable macroeconomic environment. I think as we progress, we need to adjust our spending again, depending on what the revenue outlook. It is very important that we take all of this into account so that we don’t resort to an unnecessarily bloated deficit at the end of the day.
He explained that the positive aspect of this situation was its potential to reduce energy prices, which he noted would benefit businesses. He added that, from a business perspective, especially concerning energy costs, this development was seen as advantageous.
