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FG sets 2024 crude oil benchmark at $73.96, exchange rate at N700/$

FG sets 2024 crude oil benchmark at $73.96, exchange rate at N700/$
October 17
07:21 2023

The federal executive council (FEC) has projected that Brent crude oil price will depreciate and the naira will recover significantly against the dollar in 2024.

Atiku Bagudu, minister of budget and planning, spoke about the federal government’s outlook for the exchange rate and crude oil price after the council’s meeting on Monday.

According to Bagudu, FEC established a reference price of $73.96 per barrel for crude oil and an exchange rate of N700/$ as key assumptions for budgetary planning.

“Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability by particularly the deregulation of petroleum prices, which we maintained that subsidies are gone and indeed the regulation of the foreign exchange market,” he said.

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Tinubu had declared an end to subsidy on premium motor spirit (PMS) in May. The decision jerked up petrol prices, as the government transitioned from subsidised pricing to a cost-reflective system.

The federal government also commenced a reform of the foreign exchange market in June, with the consolidation of multiple exchange rates in the official market to unify the rate with the parallel market

The projected crude oil price by FG is below the $94.91 projection of the US Energy Information Administration (EIA) and the $100 a barrel forecast by Goldman Sachs for next year.

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Brent crude oil price was above $90 as of Monday.

The government also projected that the naira will strengthen against the dollar to N700/$, a far cry from the official market’s closing rate of N778.80/$ on Monday — the parallel market’s rate is above N1,000/$.

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