FG Says it Has Budget Plans for Oil price as Low as $45

Finance Ministry isn’t wedded to an oil benchmark price of $65 per barrel estimated in this year’s budget and has plans on how it will respond if crude drops lower.
The government has a “scenario-based approach with accompanying adjustment measures, given the uncertainty as to where the oil price would eventually settle,” Paul Nwabuikwu, spokesman for the ministry, said in an e-mail on Thursday. “The scenarios developed go as low as $45 per barrel.”
Crude prices have plunged by more than half since June, cutting revenue in Africa’s biggest oil producer and forcing the government to tighten its budget. The currency has slumped 17 percent against the dollar in the past six months, the most of more than 30 African nations tracked by Bloomberg.
The government will introduce additional measures to protect capital expenditure in the budget if oil prices remain below $65 a barrel, Nwabuikwu said, without giving details.
“The focus is on critical infrastructure projects which drive growth in order to maximize impact,” he said, adding that the government has no plan to fire workers.
Finance Minister Ngozi Okonjo-Iweala on December 4 proposed capital spending of N634 billion ($3.3 billion) this year, or 15 percent of total expenditure of N4.36 trillion. Recurrent spending, which includes salaries, makes up about 60 percent of the budget.
Nigeria, Africa’s biggest economy and most populous nation, is scheduled to hold a presidential election on February 14.

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