December 17, 2017

Dropping oil prices to cost Nigeria US$25bn within the next one year

Nigeria is bound to lose an approximate amount of US$ 25bn in the coming one year if they fail to recover from slumping oil prices.

With the oil per barrel price standing at US$ 68.53 currently against June’s US$ 101.64, the loss of revenue would be US$ 33.11 per barrel. This translates at US$ 2.01 a month and US$ 24.17 billion a year, meaning the country is at the verge of losing US$ 24.17 billion in the coming one year. The country is producing two million barrels a day or 730 million barrels a year.

Finance Minister, Dr. Ngozi Okonjo-Iweala has said the country has embarked on printing money or imprudent borrowing to deal with dropping oil prices. “This is not the first time this country has gone through lower oil prices and it will not be the last,” she said at a press conference in Abuja.

“We should avoid the kind of fear that will paralyze us or make us do the wrong things, she added.”

Nigeria has already reduced oil prices to US$65 per barrel last week – the second time they are doing so in a month and an initiative that could affect the country’s revenues. Nigeria announced on October this year that it would need US$100m to meet 2020 oil production targets.

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