Abuja, Nigeria – April 10, 2025
Nigeria’s 2025 federal revenue target is now at risk due to a significant drop in global crude oil prices. As of April 9, 2025, the price of Bonny Light, Nigeria’s premium oil grade, fell to $59.62 per barrel—a 5.09% decrease, well below the government’s benchmark of $75 per barrel set in the 2025 budget. This unexpected crash in oil prices is creating uncertainty for the country’s projected revenue.
In addition to falling oil prices, Nigeria is also facing challenges with its oil production. As of February 2025, the country’s output, including condensates, was approximately 1.67 million barrels per day (bpd), falling short of the 2.06 million bpd target set for 2025.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), expressed concern over the current situation, stating:
“This is a serious problem as we have just completed the first quarter of the year. If this situation persists, it poses significant risks to our revenue and exchange rate. The drop in oil prices will put pressure on our foreign exchange earnings, which could weaken the economy.”
This decline in oil revenue is also expected to have ripple effects on Nigeria’s domestic fuel prices. Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) predicts that continued drops in oil prices may lead to a reduction in fuel costs for consumers in the coming months.
To mitigate the impact of these financial setbacks, the federal government is exploring a range of solutions, including ramping up crude oil production, revising the 2025 budget, and increasing non-oil revenue through agencies like the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service. Alternative non-debt financing options are also under consideration to address the anticipated revenue shortfall.
The recent drop in oil prices has been linked to global factors such as escalating trade disputes, particularly between the U.S. and other major oil-producing countries. This has raised concerns about the potential for a global trade war and its impact on global oil demand.
As Nigeria navigates these economic challenges, analysts warn that the next few months will be crucial for securing financial stability. The government will need to explore all available avenues to meet its budget targets and ensure sustainable economic growth despite volatile global oil markets.
