Concerns over Nigeria’s 2025 budget implementation have heightened following a significant slump in global crude oil prices, which fell to $59 per barrel over the weekend—down from a recent peak of over $70 per barrel.
This marks the lowest oil price recorded so far this year and represents a sharp 15.7 per cent drop from the year’s highest level.
Nigeria’s 2025 budget is benchmarked at $75 per barrel with an oil production target of more than two million barrels per day, including condensates. However, in its April 2025 Monthly Oil Report, the Nigerian Upstream Petroleum Regulatory Commission revealed that oil output, including condensates, fell marginally to 1.6 million bpd in March from 1.7 million bpd in February. This figure is over 300,000 bpd below the projected budget benchmark, further complicating fiscal projections.
The recent plunge in oil prices follows the announcement of sweeping tariffs by United States President Donald Trump last Wednesday. The new measures are expected to raise the effective U.S. tariff rate to its highest level in more than a century, triggering disruptions in global trade and investor sentiment.
In addition to the tariff impacts, global oil prices are under pressure due to an uptick in production and exports from several oil-producing nations.
This comes as the Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, begin phasing out voluntary output cuts and prepare to ramp up production by 411,000 bpd starting in May.
Speaking with Vanguard in a telephone interview, the National President of the Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, stressed the volatility of the oil market and its implications for Nigeria’s economy.
He stated, “The oil market has become very volatile in recent times, due to factors beyond Nigeria. The nation needs to start looking beyond crude oil to generate adequate foreign exchange.”
Echoing similar concerns, the Chief Executive Officer of Petroleum Price NG, Olatide Jeremiah, warned of the budgetary risks associated with falling oil prices.
“We have a major drop in crude oil prices, which is capable of affecting the execution of the nation’s 2025 budget,” he said.
The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, offered a nuanced perspective on the situation. He noted the short-term benefits for consumers but highlighted the broader economic challenges.
“As consumers, we are happy that the price is coming down, but as a nation, it’s not good for our economy because our revenue inflow is also impacted.
“Most importantly, what is even destabilising the market is inconsistencies in the way President Trump also sends his policies. He moves today. Tomorrow, he reverses. So, it’s been challenging to predict the next level.
“Recently, as we all know, the global oil market, not only oil market, but the global economy has been a bit volatile, in the sense of the new American government’s policy of tariffs, not only targeted at China but the whole countries across the world.
“Investors and traders in not only the oil and gas industry but in general economies of the world are moving left and right to the extent that some are doing day trading.
“That means you do your trading today. You close by the end of today because you never know what tomorrow’s policy will drive the market into.
“So, the crude oil and petrol products market continues to have a downward trajectory because of these inconsistencies and policies of the government of United States, and the key aspect of it is the aspiration of the American President to ensure that the crude oil pricing, or the crude oil price come down to maybe below $50 a barrel, that’s why he encourages more exploration in his country,” he said.
Ahmed reiterated his concern about the long-term consequences for Nigeria’s economy. “We are happy as consumers of the derivatives of product pricing that the price is coming down, but when you look at it globally as a nation, it’s not good for our economy because our revenue inflow is also impacted.
“If the crude oil price, like what happened some Fridays ago, where it dropped in one day from about $73 a barrel to $60, you can see that in terms of our crude oil production, our revenue is impacted severely.
“This volatility will continue because as recently as yesterday, when President Trump again exempted some sectors from tariff, particularly to China, like in terms of vehicular tariffing, you saw the market again started to go up.”
