In its first administrative steps, the new government of the federation has declared the removal of the country’s controversial subsidy on fuel. Welfare advocates have defended it, but it has also come under heavy fire for its macroeconomic and budgetary lapses. For instance, subsidy costs, which totalled over N10 trillion between 2006 and 2019, consumed N4.39 trillion ($9.7 billion) in 2022 alone and nearly N3.36 trillion ($7.5 billion) in the first half of 2023, have been a contributing factor in budget deficits in recent years.
June 25, 2023
Nigeria Economic Update (Issue 21)
In the crude oil market, OPECs weekly basket price increased 1.07 percent from $29.02 per barrel in February 19 to $29.33 per barrel in February 26. A combination of factors were responsible for the slight price increase. First, a decrease in the number of active oil rigs in the US2 (the lowest since 2009) may have marginally eased the glut in the crude oil market. The ongoing efforts by OPEC and other major oil producers such as Russia to freeze oil production have also played a significant role in stemming the downward trend in oil prices. With the current market conditions, the price of crude oil is expected to maintain a fairly stable and modest upward trajectory in the near term.