Nigeria may be in for harder times than previously envisaged as the International Monetary Fund has predicted that crude oil prices may slump to as low as $20 per barrel in 2016.

In the ‘IMF Executive Board Concludes 2015 Article IV Consultation with Iran’ report, the body highlighted that the price of crude oil could drop by between $5 and $15 in 2016, cableng.com reports.

As of Thursday, the price of crude oil in the international market averaged $37. On December 17, the price fell to $36 per barrel.

The Federal Government 2016 budget had based the 2016 budget on a benchmark oil price of $38 per barrel. If the IMF prediction comes true, the country will be in serious trouble as there won’t be any buffer for the budget.

Crude oil revenue accounts for about 90 per cent of Nigeria’s foreign exchange earnings. Nigeria is projected to produce 2.2 million barrels of crude oil per day in 2016. If it sells at $38 per barrel, it will generate around $83.6m daily or $30.51bn in the entire year. At $20 as predicted by the IMF, Nigeria will generate $44m daily or $16.06bn next year. This will mean that the country will get at least 47.4 per cent less revenue from oil than what is projected, adding more pressure to the nation’s need to go borrowing in 2016.

According to President Muhammadu Buhari, oil related revenues are expected to contribute N820bn to the economy, while the budget deficit, which is projected at N2.22tn, will be funded by foreign and domestic loans.

If the N820bn expected from oil revenues is cut by 47.4 per cent as a result of the IMF projected decline in oil prices, the nation’s budget deficit will climb by N388.68bn to N2.59tn.

http://www.punchng.com/oil-could-fall-to-20-in-2016-imf/

Of course let it fall to 0.0ⁿ0/$ so we can have peace
Meanwhile I want to wish Happy Christmas to the man who appropriated a large portion of the budget for further exploration of oil in the chad basin.
GIVE IT UP FOR!!!!!!!!!!

Nigerian citizens should just sit up. No more light at the end of the tunnel. I 'm not against this administration but it lacks measures to curb the surfacing hard time

roughdiamond:
Nigerian citizens should just sit up. No more light at the end of the tunnel. I 'm not against this administration but it lacks measures to curb the surfacing hard time

true talk bro

Buhari should have pegged the benchmark at $20 and keep any extra for 2017 Capital Projects

Because if this prediction becomes real, we might end up in an economic crisis.

Borrowing money to finance Capital Projects in a nation like Nigeria whose citizens are corrupt minded might cause Buhari a stroke if these saboteurs divert the money.

Buhari should study his subordinates in 2016 before borrowing.

A wise leader should be patient enough to know the Judas in his ranks.

If oil drops to $20 next year, there would be dire consequences on the economy.
---
(1) Oil revenue will drop from N820bn to under N300bn, since cost of oil production is above $15/bbl.
(2) Tax Revenue will drop by a significant amount - since Petroleum Profit Tax (PPT) and Company Income Tax (CIT) of oil companies contribute a lot to Tax Revenue.
(3) Foreign Reserves will drop under $20bn.
(4) Naira will collapse to around N300/$ officially.
(5) Budget deficit will either increase or govt won't be able to implement it's budget.
(6) Many states will not be able to pay salaries or do any capital projects.
(7) Unemployment will increase, GDP will shrink and Nigeria will officially be in a recession.
(8.) Rating Agencies (like Moodys) will downgrade the country to Junk status.This will increase the yield (interest) on our debts.
(9) The Stock Market will crash as investors run away from the country's financial assets
(10) Pension Funds who invest in the capital market will have their assets drop in value, thereby putting the funds of pensioners at risk.
etc
---
Unfortunately, a lot of people will put the blame squarely on PMB's table - with very little consideration to the fact that, over the last few years, our lazy and corrupt leaders choose to make us a Mono-Economy, refused to save for a time like this and refused to invest in infrastructure - even with record high oil prices.
---
No matter how bad things get, I am 100% positive that PMB is the right man to steer the country through this trying period. With all the DasukiGate and DiezianiGate revelations, GEJ & PDP would simply have been nothing but a complete disaster with such low oil prices.

It better fall to 1 dollar..this is good for Africans BC it seems their lazy silly brains can't see any other thing than oil as a means of income.in particular Nigerian politicians can now at least rest or better still back out from politics so the real called ones can stand out

fuckerholic:
It better fall to 1 dollar..this is good for Africans BC it seems their lazy silly brains can't see any other thing than oil as a means of income.in particular Nigerian politicians can now at least rest or better still back out from politics so the real called ones can stand out

Some kind of a huge blessing in disguise. We all knew it was a question of time before Nigeria paid for its decades of visionless, incapable, wasteful and lazy leadership. This is just the beginning.

Bevista:
If oil drops to $20 next year, there would be dire consequences in the economy.
---
(1) Oil revenue will drop from N820bn to under N500bn
(2) Tax Revenue will drop by a significant amount - since PPT and CIT of oil companies contribute a lot to Tax
(3) Foreign Reserves will drop under $25bn
(4) Naira will collapse to around N300/$
(5) Budget deficit will either increase or govt won't be able to implement it's budget.
(6) Many states will not be able to pay salaries or do any capital projects.
(7) GDP will shrink and Nigeria will officially be in a recession.
etc
---
Unfortunately, a lot of people will put the blame squarely on PMB's table - with very little consideration to the fact that we made ourselves a Mono-Economy and also refused to save for a time like this.

These are very grim and gloomy times for us all. We've refused to think ahead and save for days like these. The foolishness and myopia of our lazy leaders will be very bare before them.

Fanatic catalyst.

So Much For A Dollar-happy Economy. Its Simple; When You Fail To Plan, You Planning To Fail. The Decisions Of Yesteryears Biting Us In The Face. We Must Sink And Swim Together. One Thing I'm Sure Of Is That OPEC Will Not Fold Its Hands And Watch Things Go So Dip.











No Lie Only Truth!

TimeManager:
So Much For A Dollar-happy Economy. Its Simple; When You Fail To Plan, You Planning To Fail. The Decisions Of Yesteryears Biting Us In The Face. We Must Sink And Swim Together. One Thing I'm Sure Of Is That OPEC Will Not Fold Its Hands And Watch Things Go So Dip.

No Lie Only Truth!

@ the bolded. Unfortunately, there is very little OPEC can do right now and I'll explain:
---
(1) OPEC controls only around 30% of global oil supplies
(2) If they try to cut production, in a bid to drive up oil prices, they will simply loose market share while other non-OPEC countries would still benefit from the price increase, albeit now with increased market share. This is something major OPEC countries like Saudi Arabia, Kuwait, etc are not prepared to do. Saudi Arabia has Foreign Reserves of over $750bn, so they are not desperate and can comfortably survive oil price below $20.
(3) There is already a supply glut in the market, and any action from OPEC will have little impact - IRAN supplies is coming on stream, US Shale oil is coming more on stream, US Congress has approved for US to start oil export which will simply add to the glut in the export market.
(4) Cost of alternative energy (like solar & electric cars) is coming down, so there is a strong chance that demand for solar and electric energy will increase in the coming years at the expense of traditional fossil energy.
---
The best we can pray for is a little temporary respite in oil price to around $45 next year in the hope that our leaders will finally understand the gravity of the situation and use the funds to diversify the economy.

@Bevista, OPEC Would Not Be Defensive, It Would Rather Be Cautious Yet Aggressive In Its Approach. OPEC Would Not Cut Production, Far From It. Opec Would Encourage More Production. Shale Oil Cannot Compete In The Long Run Because Its 'Shale'. Opec Would Maintain Its Market Share. Alternative Eneargy Is Neither A Threat To Oil. How Many Nations Would Forego A Moneyspinning Oil For Alternative Energy. OPEC Is S Till The Largest Supplier Of Oil. A Big Factor That Counts.















The Truth!

@Bevista, OPEC Would Not Be Defensive, It Would Rather Be Cautious Yet Aggressive In Its Approach. OPEC Would Not Cut Production, Far From It. Opec Would Encourage More Production. Shale Oil Cannot Compete In The Long Run Because Its 'Shale'. Opec Would Maintain Its Market Share. Alternative Eneargy Is Neither A Threat To Oil. How Many Nations Would Forego A Moneyspinning Oil For Alternative Energy. OPEC Is Still The Largest Supplier Of Oil. A Big Factor That Counts.















The Truth!

TimeManager:
OPEC Would Not Be Defensive, It Would Rather Be Cautious Yet Aggressive In Its Approach. OPEC Would Not Cut Production, Far From It. Opec Would Encourage More Production. Shale Oil Cannot Compete In The Long Run Because Its 'Shale'. Opec Would Maintain Its Market Share. Alternative Eneargy Is Neither A Threat To Oil. How Many Nations Would Forego A Moneyspinning Oil For Alternative Energy. OPEC Is S Till The Largest Supplier Of Oil. A Big Factor That Counts.

OPEC Would Not Cut Production, Far From It. Opec Would Encourage More Production.
And what would be the implication of OPEC increasing supply in an already over-supplied market? The price will just go further south.
---
Shale Oil Cannot Compete In The Long Run Because Its 'Shale'.
That is exactly what has been said over the last few years. They said Shale cannot survive with oil price under $70, but yet they are still here at under $40. You need to realize that the West is technology driven, and so they are aggressively looking for new technology to bring down the cost of shale oil production.
---
How Many Nations Would Forego A Moneyspinning Oil For Alternative Energy.
You need to realize that oil exporting countries have a completely different interest from oil importing countries. Lower oil prices or alternative energy is bad news for oil exporting countries but VERY GOOD NEWS for oil importing countries. Do you have an idea of what will happen to oil importing countries if oil collapsed to $20? Gasoline prices at the pump will come down, cost of powering factories will come down, companies will report higher earnings, their GDP will shoot up, unemployment will come down, inflation will come down. So you see, very few countries have interest in high oil price.
---
Alternative Eneargy Is Neither A Threat To Oil.
When Smart Phones surfaced, NOKIA thought they were not a threat until they were cannibalized. When Digital Cameras came out, some traditional photographic film companies thought it was not a threat but today we know better. Nothing stays the same forever bro - the game is ADAPT or DIE!

#NoMoreFoolsParadise

@Bevista, Your Economic Theory Of Oil supply Is Well noted. However, Oil Going down South Is Not The Biggest Of Worries For OPEC Members, They Are More Concern About The Market Share. The Likes Of Saudi, UAE, Kuwait..., Could Afford $20 As Their Reserves Are Bouyant, Nigeria Is Otherwise In A Panic Mode Because Of Its Depleted Reserves. Hence Nigeria Situation Cannot Be A Measure To Cut Production, The Overall Interest Of OPEC Is At Stake And Will Do Everything To Fend Off Any Threat.

This Is An Era Of Oil War.













No Lie Only Truth!

Niger Delta militants will not like this.
Now that oil is almost equal to the price of water.

Comparing this projection with the projection how budget was based on, looks like with are in for a long 2016. May God grant our present leaders the wisdom to make the choices.

Ok

I wish i studied agriculture

Blame it on Badluck Jonathan
Only if Badluck had saved for rainny days
To put things in perspective, apart from the fact that the 400,000bpd amounts to US$60 billion stolen in just four years, the 400,000bpd is the equivalent of the daily crude oil production of Equatorial Guinea,” the party said.

It also said the government has not been able to account for huge sums of money, including the $20 billion missing oil funds and the funds that should have accrued to the Excess Crude Account (ECA).

“At the crude oil benchmark of $77.5 for the 2014 budget, Nigeria made $33 per every barrel of oil, which amounts to about $24 billion in a year. However, there is less than $6 billion in the ECA. What happened to the remainder?

“Also, over N1 trillion was budgeted for defence in 2014. What has the Jonathan administration done with the funds, with soldiers deployed to battle the terrorist group, Boko Haram, complaining of inadequate or ineffective equipment that are inferior to what is being used by the terrorists? What has happened to the huge funds since soldiers are being made to pay for their kits? Why has the huge allocation translated to more territories seized by the insurgents? These are some of the questions!
The party also reminded Nigerians that Ifeanyi Uba, who is the face of the so-called Transformation Ambassadors of Nigeria (TAN) that has spent over N25 billion campaigning for the president, is one of those accused of kerosene subsidy fraud.

“But instead of prosecuting him diligently, the Asset Management Corporation of Nigeria (AMCON) has settled the matter out of court and returned all his seized assets to him. How else can a government encourage corruption and impunity?” it queried.

k

Hmmmmm, no cause for alarm. Booohari is in control.

Talk is cheap!...Shey President Buhari promised to stabilize world oil price abi he no win? I jst blame illiterates that believed him and wasted dia votes and don't tell me there was no better option cos Prof Remi sonaiya of kowa was dia. ... Naija needs to revive agriculture or find another means of survival asap!

I see it reaching s7

A welcome development.
Sai Baba

Abiagirl777:
Of course let it fall to 0.0ⁿ0/$ so we can have peace
Meanwhile I want to wish Happy Christmas to the man who appropriated a large portion of the budget for further exploration of oil in the chad basin.
GIVE IT UP FOR!!!!!!!!!!

is that the pic of your dad on Christmas day

I pray it falls to $1 so that our politicians will turn to armed robbers if they don't see oil money to steal.

Where are those changi feofle?

I kind of like this news



Weda Naira or barrel of crude, something must be equals to 1 dollar