11 January 2018

Nigeria: Budget - Crude Oil Prices Above 2018 Benchmark By $22/B

With the crude oil price crossing $69 per barrel yesterday, the federal government has recorded $22 per barrel extra above its 2018 budget benchmark.

President Muhammadu Buhari presented $45/barrel as crude price benchmark in his appropriation bill but senate jerked it up to $47/barrel.

At the international market, the crude oil prices hit new multi-year highs on Wednesday as OPEC-led production cuts and healthy demand helped to balance the market.

U.S. West Texas Intermediate (WTI) crude futures were at $63.34 a barrel, up 38 cents, at 1440 GMT. Earlier prices rose to $63.67, the highest since Dec. 9, 2014.

Brent crude futures were at $69.02 a barrel, 20 cents above their last close. Brent earlier hit $69.37, the highest since May 2015.

Although the budget has not yet been approved by the national assembly, the extra amount is usually transfered to the excess crude account for the three tiers of government.

As of December 14, 2017, the Excess Crude Account had a balance of $2.317 billion. The account has always been a subject of controversy and between the tiers of government. In the past one of the major operations of the accounts was to fund the subsidies of the petrol.

Meanwhile the Nigerian Stock Exchange (NSE) has posted its biggest gain of the year yesterday.

The market capitalisation appreciated by N517 billion or 3.06 per cent to close at N14.880 trillion as against N14.363 trillion following Dangote Cement gain.

Also, the All-Share Index which crossed over 40,000 mark on Tuesday, grew further appreciating by 1,453.14 points or 3.06 per cent to hit 41,816.11 as against 40,362.97 on Tuesday.

Dangote Cement led the gainers' table, growing by N9.50 to close at N247 per share.

Nigerian Breweries followed with a gain of N6 to close at N146, while Conoil gained N3.48 to close at N37.51 per share.

International Breweries appreciated by N3.01 to close at N60, while Beta Glass added N2.56 to close at N53.87 per share.

On the other hand, Guinness topped the losers' chart, shedding N1.80 to close at N100.20 per share.

UAC Property trailed with a loss of 3k to close at N3, while Fidelity Bank was down by 2k to close at N2.92 per share.

This was in contrast with 770.89 million shares worth N7.89 billion transacted in 7,395 deals on Wednesday.

Transcorp drove the activity chart trading 184.73 million shares valued at N365.27 million.

Diamond Bank came second with 136.61 shares worth N314.53 million, while

Access Bank traded 121.96 million shares valued at N1.44 billion.

Fidelity Bank exchanged 86.03 million shares worth N259.96 million, while FBN Holdings traded 72.47 million shares valued at N770.42 million.

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