Nigeria’s 2024 Budget appears to be underfunding threat due to sustained declines in oil prices alongside stagnation in crude oil output levels.
The price of Bonny Light, Nigeria’s premium grade, dropped to $76.54 per barrel yesterday, down from the May 2024 average price of over $80 per barrel. This indicates a shortfall of 1.8 percent compared to the 2024 budget reference price of $77.97 per barrel.
Nigeria’s oil production experienced heightened concerns yesterday for the first time in 2024, as both price and output faltered. This is notable as the nation’s 2024 budget was set on a benchmark of $77.97 per barrel and 1.70 million bpd, including condensate.
Condensate is a type of light crude oil that is found in natural gas fields. It is a valuable byproduct of natural gas production and is often extracted along with natural gas. Condensate is similar to regular crude oil but has a lower density and is typically lighter in color. It is commonly used to produce gasoline and other petroleum products.
This occurred just weeks after the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported the nation’s oil output at 1.4 million barrels per day, including condensate.
The Monthly Market Report (MOMR) by the Organisation of Petroleum Exporting Countries (OPEC) in May also indicated Nigeria’s oil output, excluding condensate, at 1.28 million bpd in April 2024.