2024 Budget: Stakeholders commend Tinubu on oil price benchmark

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Some oil and gas industry stakeholders have commended President Bola Tinubu for pegging the crude oil price at $77.96 and the naira-dollar exchange at N750/$1.

They gave the commendations in separate interviews on Thursday in Lagos.

On November 29, Mr Tinubu presented the 2024 ‘Budget of Renewed Hope’, pegged the oil price at $77.96 and the naira at N750/$1.

Olukayode Akinrolabu, research fellow at the Science and Technology Educational Research Group (STERG), Faculty of Education, Lagos State University, Ojo, said the supplementary budget of N27.5 trillion was a step in the right direction.

Mr Akinrolabu said the attendant projection for an increase in GDP, employment, and macroeconomic appreciation were all fascinating indices for appraising and judging Mr Tinubu’s policy on oil production level and international market price.

According to the research fellow, these new rates are slightly higher than the previous $75 per barrel and 1.69 million barrels per day for 2023.

“The increase or appreciation rate is approximately 5.25 per cent. The slight raise projection might not be far from the ongoing crusade against oil theft and the exploit of appreciable success in that drive,” he said.

Mr Akinrolabu, however, believed that intensifying the ongoing crusade against oil theft would further culminate in appreciable gains in oil production and price.

Mr Akinrolabu said the supplementary budget should have in its content component fortifying capabilities to strengthen the fiscal policy.

Henry Adigun, an oil and gas expert, said the $77.96 crude oil price benchmark was reasonable, noting that “I am not sure about its projected outputs, that might be unrealistic and unattainable.”

“And the exchange rate, I am not very optimistic about that. The inflow to make that happen only exists within a loan and should not be a basis for setting a target for the exchange rate,” added Mr Adigun.

According to Mr Adigun, the benchmark is realistic, looking at the oil price trends. He added that there is a formula for its determination. 

“You use three years’ average of the preceding year to determine that. So, that is okay. On the output, I am not certain how that will be achieved,” he explained.

Also, Olumide Ogunmade, the former chairman of the South-West zone of the Independent Petroleum Marketers Association of Nigeria (IPMAN), commended Mr Tinubu on the maiden budget presentation.

Mr Ogunmade said that the continuous Ukraine-Russia war and the Middle East tensions make the $77.96 benchmark figure reliable. 

He added that given the restiveness in the Niger Delta, the figure could be achieved and even increased to two million barrels per day before the end of 2024.

The marketer said the dollar exchange rate of N750 would not be difficult to achieve given the reforms presently embarked upon by the Central Bank of Nigeria (CBN).

“It is as a benchmark given the tension around the middle east cum the Ukraine-Russia, which is not likely to abate throughout the 2024 year,” stated Mr Ogunmade.