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Nigeria cuts benchmark oil price to $45 in '09 budget

LAGOS - Nigeria has cut the proposed benchmark oil price in its draft 2009 budget to $45 per barrel from $62.5 as a result of the decline in world crude prices, a senior finance ministry official told Reuters on Monday.

‘Forty-five dollars is what we are working with right now, but it has to go to the National Assembly (for approval),’ the official said, declining to be named.

The 2009 budget in Africa's most populous nation had been expected to go before parliament earlier this month, but a sharp drop in oil prices over the past three months has played havoc with the key assumptions on which the spending plans are based.

Next year's budget had been based on projected oil production of 2.3 million barrels per day (bpd) at a benchmark price of $62.5, compared with $59 in the 2008 budget.

But fears of global recession have depressed oil demand in the United States and other industrial nations, driving world prices down by more than 50 percent from their peak above $147 a barrel just three months ago.

US crude for November delivery was trading at $73.80 on Monday.

Nigeria saves any oil revenue above the benchmark oil price into an excess crude account, a pillar of IMF-backed reforms meant to guard against price volatility on world markets and help it to save money.