By Adewale Sanyaolu
Nigeria is to rake in an estimated $4,416,500,000 into the Excess Crude Account (ECA) by the end of 2017, if crude oil prices continue to rally in its favour , Daily Sun analysis has revealed.
But, this revenue target can only be achieved on the assumptions that hostilities in the Niger Delta are halted, to allow government attain the 2.2 million barrels of oil production per day projected in 2017 budget, with oil prices maintaining a steady price of $50 or more per barrel.
OPEC had at its 171st meeting held at its headquarters in Vienna on November 30, 2016, reached a land mark deal that will effectively cut production by about 1.8 million barrels per day, or about 4.5 percent of current production, to 32.5 million barrels per day, in a bid to firm up oil prices
The November agreement followed earlier meetings held in September in Algeria where each member country reached a consensus on the need to cut production to boost prices. But since the beginning of 2017, oil prices have been trending above $50, hitting its highest level in 18-month on the first trading day of 2017, at $58.37 per barrel
President Muhammadu Buhari, had in his 2017 Budget of ‘Recovery and Growth’ presented to the joint session of the National Assembly on December 14,2016, pegged benchmark crude oil price at $42.5 per barrel; and oil production estimate at 2.2 million barrels per day.
However, the Senate, while approving the Medium Term Expenditure Framework (MTEP) and Fiscal Strategy Paper (FSP) recently, raised the oil price benchmark for 2017 to $44.5 per barrel despite retaining the N305 to a dollar exchange rate proposed by the executive.
Meanwhile, in line with Daily Sun analysis, if Brent Crude stabilises at $50 per barrel, for the rest of 2017, Nigeria would be making an extra $5.5 on a barrel of crude oil above the budget benchmark. Brent crude is currently trading at $55.52 per barrel and so if $5.5 is multiplied by the 2.2 million daily production, that would amount to $12,100,000 savings daily. And if the $12,100,00 figure is further multiplied by 365 days, it will translate to $4,416, 500,000 in one year.
Recall that the Minister of Finance, Mrs Kemi Adeosun, had told the National Economic Council (NEC) last year that the Excess Crude Account rose to $3.93 billion as at July 20, 2016 from $2.259 billion in May 2016.