Oil Price Plunges To $72 Per Barrel

For the first time in over a year, oil price fell on Wednesday to $72 a barrel.

Brent crude, the global oil benchmark, fell over 5 percent to $72.39 a barrel — first time since December 2021.

The US West Texas Intermediate also fell over 5 percent to $67.06 a barrel.

Reuters reported that the price of the commodity dropped as worries about Credit Suisse shook global markets and countered expectations of a recovery in Chinese oil demand.

The current price of the commodity is now below the $75 benchmark in Nigeria’s 2023 budget.

In 2020, when a similar situation occurred, Zainab Ahmed, minister of finance, said the FG would lower the $57 benchmark of the country.

“What the impact will be on that is that there will be reduced revenue to the budget and it will mean cutting the size of the budget. The quantum of the cut is what we are supposed to assess as a committee,” she had said.

If Ahmed’s words are to be considered, it means the federal government may consider revising the country’s benchmark to fit the global oil price — if the downward trend is not reversed.

Bolade Agboola, oil and gas sector analyst at Meristem Securities Limited, explained that the advantage of the global oil price remaining above Nigeria’s benchmark is that the federal government will earn more revenue to finance its budget.