Crude Oil Price Decline Threatens Nigeria’s 2025 Revenue Projections

Crude Oil Price Decline Threatens Nigeria’s 2025 Revenue Projections

Nigeria’s fiscal outlook for 2025 faces significant challenges following a sharp decline in the price of Bonny Light, the country’s premium crude grade, which fell by 5.09% to $59.62 per barrel. The drop is attributed to the escalating tariff dispute sparked by recent U.S. tariff hikes, as well as a planned output increase by the Organization of Petroleum Exporting Countries (OPEC) and its allies.

OPEC+ has announced an additional supply of 411,000 barrels per day beginning May 2025, further exerting downward pressure on global oil prices.

Analysts warn that the development could severely undermine Nigeria’s N54.99 trillion 2025 national budget, which was benchmarked on a crude price of $75 per barrel and a daily production target of 2.06 million barrels. However, current figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reveal actual production, including condensates, stood at just 1.67 million barrels per day in February 2025.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), emphasized the implications:
“This is a major economic concern, especially this early in the fiscal year. The potential sustained drop in oil prices presents a dual threat to government revenue and the foreign exchange market, which could further destabilize the naira and overall economic stability.”

On a more positive note, industry findings suggest that falling global oil prices may lead to a corresponding decrease in domestic pump prices for petroleum products. Major stakeholders in the downstream sector are reportedly preparing to announce reductions in the price of Premium Motor Spirit (PMS), commonly known as petrol.

Ehimen Joseph, Chairman of the Lagos State Chapter of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), remarked:
“In a deregulated market, this is expected. Should the global price dip persist, we’ll see corresponding adjustments throughout the supply chain.”

Another downstream operator, speaking anonymously, confirmed that one local refinery had already paused the issuance of petrol tickets in anticipation of a price review. “A price reduction is likely before Tuesday,” the source revealed, noting that existing ticket holders may receive discounted rates.

Depot prices across several suppliers have already reflected marginal decreases:

• Mainland and A.Y.M: N918 per litre (down from N920)

• Ever: N919 (down from N920)

• Prudent: N912 (down from N913)

• Eterna: N897 (down from N900)

• Soroman: N915 (down from N916)

In a related development, OPEC stated that eight member countries — Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman — convened virtually on April 3, 2025, to assess global oil market conditions and outlooks, reinforcing the possibility of continued price volatility in the months ahead.