The Nigerian Economic Society (NES) has called on the Federal Government to review its oil price benchmark of $75 per barrel in the proposed 2025 budget to $70/barrel.
Tribune Online reports that the Federal Executive Council (FEC) recently approved a proposed 2025 2025 expenditure budget of N47.18 trillion, ahead of presentation for consideration by the National Assembly.
But NES, in an analysis of the federal government projections for 2025 in a statement on Monday, signed by its President, Professor Adeola Adenikinju, said such a budget benchmark appears conservative on their surface value.
The statement explained that “some underlying macroeconomic dynamics require their revisiting for more balancing with associated global and domestic macroeconomic risks.”
Continuing, NES noted that “Oil Price of $75/barrel appears to be conservative at current price trends, but it fails to account for a potential fall in oil price that many accompany the dousing of geopolitical tension under President Trump’s administration, as well as impact of ongoing rapid energy transition initiatives.
“It is recommended that the 2025 oil price benchmark should be revised down to about $70 per barrel to facilitate easier adjustment to any major oil price shock. Oil production at 2.06mbpd is potentially sustainable through intensification of the war on oil theft and pipeline vandalism.”
The statement further cautioned that adopting expansionary fiscal stance in the face of recent economic policies could affect Nigeria’s prevailing high inflation and rising costs of domestic production.
“The strategic vision of the budget is built around expected sustenance of current oil price trends benchmarked $74/barrel, and promising progress in revenue collection and expenditure management of non-oil revenue sources in the 2024 budget.
“We wish to note that adopting an expansionary fiscal stance in the midst of oil subsidy removal and exchange rate deregulation policies may further undermine the CBN’s monetary tightening policies to bring down the prevailing high inflation and rising costs of domestic production,” the statement added.
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