The price of Bonny Light, Nigeria’s premium oil grade, fell by 5.09% to $59.62 per barrel on Wednesday, as the ripple effects of the ongoing U.S.-China tariff war and the recent decision by the Organization of Petroleum Exporting Countries (OPEC) and its allies to raise oil production hit global oil prices.
This drop comes as a blow to Nigeria’s economy, particularly concerning the 2025 budget, which was based on an oil price of $75 per barrel and an output of 2.06 million barrels per day (bpd). Experts predict the decline in oil prices and the projected increase in output will pose a significant challenge to the nation’s financial projections.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that Nigeria’s oil output, including condensates, stood at 1.67 million bpd in February 2025, well below the 2.06 million bpd target set for the year. With the country now facing a price and output setback, concerns are mounting about the potential negative impact on revenue, foreign exchange, and economic stability.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), highlighted the serious challenges posed by the current situation. He warned that if the decline in oil prices persists, it could lead to a risk to Nigeria’s revenue and put additional pressure on the exchange rate. “We have just completed the first quarter of the year. We have three more quarters to go, and if the situation doesn’t improve, it will be a huge problem for the economy,” Yusuf explained in an interview with Vanguard.
Despite these concerns, the drop in global crude oil prices could have a silver lining for domestic consumers. The price of petroleum products, particularly Premium Motor Spirit (PMS) or petrol, may fall in the local market as a result of the lower crude oil prices.
An anonymous source within the industry revealed that a petrol price review is expected before Tuesday, with significant discounts likely to be offered to those who paid for petrol under the current price regime. These adjustments are seen as a direct reflection of the drop in crude oil prices after OPEC+ decided to increase oil output by 411,000 barrels per day starting in May 2025.
The price adjustments at Nigerian depots have already begun, with major oil companies reducing depot prices. Prices at Mainland, A.Y.M., and Ever depots have dropped by 2 Naira per litre, while Prudent, Eterna, and Soroman have seen similar reductions.
In response to the global oil market outlook, OPEC has reported that key members such as Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman held a virtual meeting on April 3, 2025, to review the market conditions and determine future actions to stabilize the global oil market.
As the year progresses, the Nigerian government will need to closely monitor these developments and adjust its economic strategies to navigate the challenges posed by the global energy landscape.
