Global benchmark Brent crude on Thursday extended its losses, dropping to $39 per barrel thereby threatening the Federal Government ability to save earnings from crude oil sales next year.
The Federal Executive Council had earlier this week proposed $38 per barrel as the oil benchmark price for the 2016 budget, down from $53 this year.
The Excess Crude Account, into which the country saves the difference between the market price of oil and the budget benchmark to provide a cushion when oil prices fall or extra cash is needed for spending on infrastructure, has been depleted in recent times as oil revenues plunged.
The account, which stood at about $4.11bn in October 2014, dropped to $2.45bn in December that year, down from about $3.11bn in November. The balance in the ECA was put at $2.1bn in July this year.
Senators on Wednesday disagreed among themselves on the $38 per barrel proposed by the Federal Executive Council as the oil benchmark price for the 2016 budget, which was contained in the Medium Term Expenditure Framework and Fiscal Strategy Paper forwarded to the upper chamber by President Muhammadu Buhari.