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Nigeria revises down 2015 oil price benchmark to $65/b on global slump: report

Nigeria has revised down its oil price benchmark for revenue calculations in its 2015 budget to $65/barrel due to the global oil price slump, local media quoted Finance Minister Ngozi Okonjo-Iweala as saying Thursday.

"The new benchmark price of $65/b had been approved by President Goodluck Jonathan and a revised expenditure framework for the next three years was resubmitted on Wednesday to parliament for its approval," Thisday newspaper quoted Okonjo-Iweala as saying.

"I had said as recently as three, four days ago that we have a central scenario of a reduced budget benchmark of $73/b because we talked to a lot of analysts. We got ranges of $60/b to $85/b and so we took a mid-point and that was how we arrived at $65/b," the minister added.

Nigeria on November 17 revised down the initial $78/b oil price benchmark for its 2015 budget to $73/b citing falling global crude prices.

Oil accounts for about 80% of Nigerian government revenue and more than 85% of the country's foreign exchange earnings. A lower oil price assumption for 2015 would translate to lower revenue targets for Africa's top crude producer, which has general elections due early next year.

Global oil prices have fallen by more than 30% since mid-June, and the International Energy Agency in its latest monthly report in November said they could continue to fall into 2015.

In the revised Medium Term Expenditure Framework submitted by the finance ministry to parliament in November, Nigeria scaled down its budgetary estimates for 2015 to N4.661 trillion from an initial N4.817 trillion.

The government also halved the 2015 subsidy budget for imported gasoline by 50% as part of a general downward review of expenditure, a move local analysts said may trigger a hike in domestic fuel prices next year and spark a political crisis for the government.

Okonjo-Iweala was reported saying the executive arm of government would seek the understanding of lawmakers over the proposals.

"You recall that the other time when we had to revise, they were quite understanding and asked us to submit it... so we are hoping to send the budget to the National Assembly pretty soon," she was quoted as saying.

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