The Organisation of Petroleum Exporting Countries (OPEC) has expressed worries over drop in Nigeria’s oil production level which is below the 2016 budgeted target which might spelt doom to the implementation of 2016 budget.
OPEC puts Nigeria production level at 1.95 million barrels per day in January as against the set target of 2.2 million.
Nigeria’s oil revenue dipped by $7.5 million per day with a drop of about 250,000 per day and this has amounted to $232.5 million lost in January.
This shortfall in production, OPEC report stated Nigeria oil production improved in 2016 as against 2015 level of 1.7 million barrels per day.
With the continued drop in oil price at $30 per barrel and the entrance of Iran into global oil market, OPEC in January oversupply with over 1.3 million barrels which could push the oil price further below Nigeria benchmark.
OPEC on Wednesday, February 10, in its oil market report states: “According to secondary sources, total OPEC crude oil production in January averaged 32.33 mb/d, an increase of 131 tb/d over the previous month.”
“Crude oil output increased mostly from Nigeria, Iraq, Saudi Arabia and Iran, while production showed a decrease of from Angola, Venezuela and Algeria.”
Nigeria contributed to the oversupply and OPEC confirmed that Nigeria production has increased steadily stating “The non-oil private sector in Nigeria had a modest improvement in business conditions in January. The PMI stood at 51.3 last month, signalling growth in production, new orders and job creation.”
Meanwhile, the minister of budget and national planning, Udo Udoma has begged the National Assembly not to tamper with 30% allocated to capital project in the 2016 budget.
He made this appealed when his ministry appeared before the joint houses of the National Assembly to defend the ministry’s 2016 budget proposals.
He counseled lawmakers to avoid repeating the mistakes of allocating mere 10% to capital projects.
Udoma said: “We are in a challenging time; we want to use the 2016 budget as solutions to our economic problems.
“We want to use it to solve our economic problems, especially the 30 per cent capital allocation component in the budget.
“We want to move from the past administration’s faulty traditional ways of managing our economy without development strides.
“we are working hard to expand fully the nation’s revenue base away from oil base.
“The government has set achievable targets to all revenues generating agencies; we must collect all revenues that are due and increase tax coverage areas.
“We have set up Treasury Single Account (TSA) that is blocking corruption loopholes and checking revenue leakages.”