The Business NG - August 20, 2025

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Falling Oil Prices Threaten Nigeria’s 2025 Fiscal Stability

Global crude prices tumbled again on Tuesday, with Brent down 1.01% to $65.93 per barrel and West Texas Intermediate slipping 1.23% to $62.64. Renewed diplomatic engagement between the U.S., Russia, and Ukraine has sparked hopes of easing sanctions on Russian oil, potentially flooding the market with supply and keeping prices under sustained pressure.

For Nigeria, the timing is precarious. The 2025 budget is premised on $75 per barrel and 1.78 million barrels per day, yet actual production remains closer to 1.5 million bpd. The resulting revenue gap risks enlarging the fiscal deficit, weakening the naira, and increasing the government’s borrowing needs.

While China’s appetite for discounted Russian crude and India’s tariff pressures may offer some global market reprieve, the immediate outlook for Nigeria’s oil-dependent finances remains fragile. Policymakers must urgently diversify revenue streams and strengthen fiscal buffers to avoid economic instability. Without decisive action, declining oil prices could undermine growth, inflation control, and the broader recovery agenda.