Dipeolu gives strident defense on why the federal Government settled for $60 oil benchmark in 2019 Federal Budget.
His words: “ I know the oil price fell in December 2018 to below $60, but the 2019 budget hadn’t started yet? But in that same year, it was at $80 per barrel, so, we are looking at the average.
“Secondly, oil prices are inherently volatile. A lot of people, and they may even be wrong, are projecting $65-$70 per barrel. At the time the budget was drawn up, who would have taught oil price would drop to $60 per barrel? Nobody. Don’t forget that the budget was drawn up when crude oil price was about $80 per barrel and it was that leeway that we gave ourselves to still be above $60 per barrel.
“I check the oil price everyday this year, it has not fallen below $60 per barrel. I think for us the challenge more should be for us to be meeting our production. And what do I mean? Possible OPEC quota more than anything else. That is because with Egina coming on stream, that is another 200,000 barrels potential, taking us to about 2.3 million barrels. So, I am not worried about the crude oil benchmark in the budget, because it doesn’t look over ambitious.
“We were already at 2.1 barrels last year, including condensate. And if you remove condensate, we are doing about 1.76 million barrels per day, and that is part of our OPEC quota.
So, I am not too worried about the oil benchmark. Ultimately, a budget is an estimate. So, at the end of the day, the parameters you used were the best figures available to you as at the time you were prepraring the budget, as conservative as possible. But the satisfaction for me would be the day we are able to say, oil revenues account for only minimal per cent of Nigeria’s revenue. The day we begin to improve tax administration.
So, we need to ramp up our revenue and then we can begin to de-emphasise our dependence on oil, Dipeolu said.