Nigeria's 2026 Budget at Risk with Oil Below $80

A report indicates that if crude oil prices fall below $80 per barrel, Nigeria's 2026 budget will be at risk, with projected petrol prices oscillating between N750 and N850 per litre, depending on the exchange rate. The report, released in Q3 2026, emphasizes the fragility of Nigeria's economy, particularly in the downstream and upstream sectors, and warns of potential fiscal stress.

It notes that while domestic refining, led by Dangote Refinery, could improve capacity, the lack of price freedom may lead to supply bottlenecks. The report also highlights that dollar-denominated costs within the domestic chain could mirror import parity prices, affecting demand and margins.

Additionally, it mentions that financing constraints and rising costs could impact Nigerian independent producers, with projected lending rates hovering between 12-15% per annum. The report concludes that while oil prices below $80 present a stress test, they are not catastrophic, suggesting that macroeconomic management is crucial for navigating these challenges.