How falling oil prices may have an adverse affect on the treasury

One thing that has been missed in all the talk of plunging oil prices is the effect on government revenues.

The drop in the price of Brent crude could result in nearly £6b being depleted from the exchequers revenues over the next year

As the FT reports

Although the loss of tax receipts will be offset by the beneficial effects to the economy of the falling oil price, the plunge from its peak of more than $145 per barrel in July has called into question the outlook for North Sea production. North Sea oil is an important source of government revenues, employment and export earnings.

Yesterday Brent crude fell to its lowest level for 22 months closing the day at $52 a barrel