The ministry raised the alarm earlier in May that government revenues, mostly from oil sales, were not enough to fund this year’s expansionary spending plans and could force the OPEC member to use all of its windfall oil savings.

Remi Babalola, minister of state for finance, told reporters it would propose revisions to the budget’s assumptions for the oil price, crude production and naira exchange rate.

The 2010 budget, signed into law in April, assumes a global oil price of $67 a barrel, crude oil production of 2.35 million barrels per day and an exchange rate of 150 naira to the US dollar.

“If you put the exchange rate at 150 and the current market rate is 146, what that means is that you are making a loss,” Babalola said.

“That is why we are saying it should be at actual market rate or below it.”

Positive step
Analysts welcomed Nigeria’s efforts to protect its savings and confront its fiscal deficit, which could grow to more than five percent of GDP under this year’s 4.6 trillion naira ($31bn) budget.

“This is a positive step, signalling that President Goodluck Jonathan is taking greater initiative and … his administration is taking seriously Nigeria’s growing deficit problem,” said Rolake Akinola, Africa analyst at Eurasia Group.

Babalola also said the finance ministry would seek to lower the budget’s 2.35 million barrels per day (bpd) oil production estimate.

“It will not be at a level that is above current production. I won’t give a figure now,” he said.

Insecurity in the Niger Delta has prevented Africa’s biggest energy producer from pumping more than two million bpd for a sustained period of time.

Babalola confirmed talks to lower the benchmark oil price in the budget to $55 from $67 a barrel.

A senior lawmaker told reporters that members of the House of Representatives were considering the oil price revision.