LAGOS -- Concerns over global recession leading to falling oil prices has forced Nigeria's federal government to adjust the crude oil price benchmark for the 2009 budget to 45 U.S. dollars per barrel, down from the 62.5 U.S. dollars per barrel earlier proposed by the parliament.
Confirming the adjustment of the budget benchmark Friday after the extraordinary Federal Executive Council (FEC) meeting held to consider and fine-tune the 2009 budget, a source close to the presidency said the amended crude oil benchmark was one of the key decisions taken on the budget.
He told local media that the government arrived at 45 dollars per barrel benchmark by looking at the worst and best case scenarios at which crude oil would sell next year, "and agreed on the new 45-dollar-benchmark in order to give us enough cushion against the erratic oil market."
"We estimate oil prices will oscillate between 52 and 73 U.S. dollars per barrel in 2009, so by arriving at a 45 U.S. dollars benchmark predicated on a production figure of 2.3 million barrels daily, this should give us sufficient latitude to save anything above our target," he was quoted as saying by Lagos-based This Day newspaper on Saturday.
The presidency official added most of the funds allocated to capital projects in the 2009 budget would go towards priority projects in the agriculture, power, road transportation and defense sectors, "in line with the seven point agenda of the Yar'Adua administration."
Earlier Friday, Minister of Information and Communication John Odey and his counterpart in the Ministry of Finance, Shamsudeen Usman at the end of the FEC meeting confirmed that the council agreed to drastically cut the 2009 budget, though the new figure was not disclosed.
However, it is obvious that it would be lower than 1.7 trillion naira (about 14.6 billion U.S. dollars) budgeted in 2008. Odey and Usman said the council meeting presided over by President Umaru Yar'Adua considered the 2009 budget and that details would be forwarded to the National Assembly for approval in the next few days.
Usman said the budget had clearly been reviewed downwards and "there has been a number of serious measures taken to reduce expenditure and improve efficiency of expenditure."
Nigerian federal government had commenced the review of the proposed 2009 budget on Tuesday, and that the oil benchmark on which the proposed budget was predicated would have to be reduced from 62.5 dollars per barrel, following the fall in oil prices.
Drastic falling of crude oil prices has cast shadow over Nigerian government's budget in 2009 due to the country's over-dependence on the oil revenue.
According to local media reports, some 95 percent of Nigeria's exports revenue is from oil crude sales, while about 85 percent of Nigerian federal government's annual gain relies on business in oil and gas sector.
Confirming the adjustment of the budget benchmark Friday after the extraordinary Federal Executive Council (FEC) meeting held to consider and fine-tune the 2009 budget, a source close to the presidency said the amended crude oil benchmark was one of the key decisions taken on the budget.
He told local media that the government arrived at 45 dollars per barrel benchmark by looking at the worst and best case scenarios at which crude oil would sell next year, "and agreed on the new 45-dollar-benchmark in order to give us enough cushion against the erratic oil market."
"We estimate oil prices will oscillate between 52 and 73 U.S. dollars per barrel in 2009, so by arriving at a 45 U.S. dollars benchmark predicated on a production figure of 2.3 million barrels daily, this should give us sufficient latitude to save anything above our target," he was quoted as saying by Lagos-based This Day newspaper on Saturday.
The presidency official added most of the funds allocated to capital projects in the 2009 budget would go towards priority projects in the agriculture, power, road transportation and defense sectors, "in line with the seven point agenda of the Yar'Adua administration."
Earlier Friday, Minister of Information and Communication John Odey and his counterpart in the Ministry of Finance, Shamsudeen Usman at the end of the FEC meeting confirmed that the council agreed to drastically cut the 2009 budget, though the new figure was not disclosed.
However, it is obvious that it would be lower than 1.7 trillion naira (about 14.6 billion U.S. dollars) budgeted in 2008. Odey and Usman said the council meeting presided over by President Umaru Yar'Adua considered the 2009 budget and that details would be forwarded to the National Assembly for approval in the next few days.
Usman said the budget had clearly been reviewed downwards and "there has been a number of serious measures taken to reduce expenditure and improve efficiency of expenditure."
Nigerian federal government had commenced the review of the proposed 2009 budget on Tuesday, and that the oil benchmark on which the proposed budget was predicated would have to be reduced from 62.5 dollars per barrel, following the fall in oil prices.
Drastic falling of crude oil prices has cast shadow over Nigerian government's budget in 2009 due to the country's over-dependence on the oil revenue.
According to local media reports, some 95 percent of Nigeria's exports revenue is from oil crude sales, while about 85 percent of Nigerian federal government's annual gain relies on business in oil and gas sector.
