Nigeria’s budget makers have nursed fears that the plummeting oil prices might weaken ridges for the Nigerian 2009 financial plan, which would soon be sent to the National Assembly for deliberation.
Oil price per barrel has plunged significantly since the crisis on Wall Street and it has further dropped to a new record low.
In 2002, oil prices rocketed from a $20 per barrel to a record $147 per barrel in 2008 but the barrel price for Nigeria’s Bonny light, and the London Brent crude, has since dropped to $86.78 only a few days ago.
The prices of oil have been falling steeply since the US monetary system was thrown into an upheaval by a disturbing number of non-performing credit loans.
Nigeria at present produces about two million barrels of oil per day while 700,000 barrels per day, at least are lost as a result of the crisis in the Niger Delta region.
The budget makers have fixed the price for oil at $56 per barrel as they plan for the 2009 financial plan with fears that the dropping oil prices would eat deep into the excess crude account which the Federal Government often uses to reduce the effect of massive oil loss to the militants in the Niger Delta region.
The rise of the US dollar to a 13-month high has added to the sliding pressure on oil prices. Investors consider oil and other commodities as safe haven when the US dollar plunges. The US Congress last week passed a bailout package of $700 billion in a desperate bid to buy the non-performing loans to enable banks to move credits to the cash-starved economies, but that is yet to win the confidence of global investors who foster fears of a looming global depression.