The Nigerian economy is experiencing a difficult time with another record fall in the price of oil in the international market.
Brent oil prices tumbled Wednesday underneath $35 for the first time in 11 years, plagued by abundant oversupply and amid the ongoing row between key producers Iran and Saudi Arabia.
The AFP reported that at about 10:30 GMT, European benchmark Brent North Sea crude oil for February delivery sank to $34.83 per barrel, the lowest level since July 1, 2004.
This comes amid calls for the Federal Government to reduce the crude oil benchmark price of $38 per barrel contained in the 2016 to 2018 Medium Term Expenditure Framework and Fiscal Strategy Paper sent to the National Assembly for next year’s budget.
On December 14, the Lagos Chamber of Commerce called for a reduction in the benchmark, warning that the draft budget benchmark for crude oil looks very fragile given the continued and projected boost of supply side of oil in the international market and its potential impact on price.
Two weeks later, the Trade Union Congress also called for a reduction of the benchmark price.
The Chairman, TUC Rivers State, Mr. Chika Onuegbu, who conveyed the union’s “serious concerns about the budget proposal,” said the budget was “laudable and ambitious, but seems unachievable.”
The call by the TUC followed the projection by the International Monetary Fund that the price of crude oil could fall to as low as $20 per barrel this year.