Minister of State for Petroleum Resources, Ibe Kachikwu, says the 2017 budget implementation will be affected by growing uncertainties in the global oil market.
Kachikwu made the statement at a news conference on Wednesday in Abuja.
The minister disclosed that the Ministry of Finance and the Federal Executive Council were working on measures to cushion the impacts of the shortfall from oil production on the budget.
Kachikwu explained that while the oil production benchmark in the budget was 2.2 million barrels per day (mbpd), the country was producing about 1.7mbpd.
”In terms of the budget impact, definitely, I mean, it is predicated on the number of 2.2 million barrels per day and a price index of 42.50 dollars.
”There is no gainsaying the fact that budget will be impacted but we are working hard with the Federal Executive Council to see how we can forecast or predict that sort of impact and see how we can recover,” he said.
On production cut, Kachikwu said Nigeria would in time join in the production cut initiated by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members led by the Russian Federation to stabilise the market.
He further said Nigeria, though committed to the deal, would have to get to a predictive level of comfort to voluntarily join in the production cut.
”We’ll still have below the benchmark set for us by OPEC and I think that over the next one or two months, hopefully, we can get to that point when we can say the recovery has been tested, is systemic, and predictable,” he added.