Energy

National Assembly Increases Oil Price Benchmark To $51

The National Assembly on Wednesday passed the Appropriation Bill into law.The estimated expenditure proposed by the President Muhammadu Buhari six months ago was also raised to N9,120,334,988,225, an increase of N508 billion.
Senate Appropriation Committee Chairman Danjuma Goje explained that the increase of N508b (6 per cent) was done in collaboration with the Executive.

He said it would be funded with the increased revenue expected from the alteration of the oil price benchmark which was raised from $45 per barrel to $51.

He further explained that the oil production level and exchange rate were left the way the Executive proposed.

The Appropriation Bill contained the estimates of revenue and expenditure totaling N8,612,236,953,214 made up of; Statutory Transfers N456,458,654,074;Debt Service N2,233,835,365, 699; Recurrent (Non-Debt) N3,494,277,820,219 and Contribution to Development Fund for Capital Expenditure N2,427,665,113,222.

Highlights of the budget as passed by the Senate included Aggregate expenditure N 9,120,334,988,225; Statutory Transfers N530,427,363,624; Debt Service 2,203,835,365,699; Recurrent Expenditure 3,512,677,902,077; Capital Expenditure 2,873,400,351,825 VI. Fiscal Deficit 1,954,464,993,775; Deficit to GDP 1.73%.

Goje added: “After close consultation with the Executive, the increase in oil price benchmark was applied in the following critical sectors of the economy: I. Reduction of deficit N50.88b; ii.Security N46.72b; iii. Health N57.15b; iv. Power, Works and Housing N106.50b, V. Education: particularly for the infrastructure for the 12 newly established Universities and meal subsidy in Unity schools N15.70b; Vl. Judiciary N10.00b; Vll. NDDC N44.20b.

On revenue projection, Goje said that in processing the 2018 Appropriation Bill, the Committee premised expenditure on the following key revenue assumptions: a) Oil Price benchmark – USD 51) Crude Oil Production -2.3 mbp/d; and c) Exchange Rate N305/USD

He said that the 2018 proposals had projected on oil price benchmark at USD 45. Crude oil production at 2.3mbpd and based on an exchange rate of N305 to 1 USD.

Senate President Bukola Saraki said, “A lot has been said on the area of how we would have passed the budget earlier.

“There is still room for improvement in the area of cooperation and collaboration between the Executive and the Legislature.

“As you all know, at least 50% of capital expenditure of ministries, some have not done their defence up to February. This is an area we must work on as the two arms of government.

“Let me also comment on some of the wrong impressions on the increase in the aggregate expenditure. This has been brought about by the frosty working relationship between the Executive and the National Assembly.

“This was not properly explained and reported since yesterday. Both the Executive and the Legislature have seen areas where there is need for intervention.

“We have heard the chairman on Works telling us that there is need for making sure there is equitable distribution of road projects which is taking a very significant amount

At he House of Representatives, the House, sitting in Committee of Supply headed by Speaker Yakubu Dogara, passed the budget with13-clauses accompanying the bill.

The House suspended its rules to immediately take the third reading of the bill and set up a conference committee headed by the Chairman House Committee on Banking and Currency Jones Onyeriere, to harmonize with the Senate.

Chairman, House Committee on Appropriation Mustapha Dawaki while presenting his report before the House said the budgettd amount was raised due to certain interventions occasioned by the increase in oil price benchmark as follows :

In a bid to stop the payments of unappropriated subsidies and other payments not approved by the National Assembly, the lawmakers inserted the clause ” The minister of Finance shall ensure that only funds appropriated under this act are released to the appropriate

Dogara said there was no request for subsidies and that it can only come through supplementary budget and that the House cannot give approval for what was not requested “we’re not Father Christmas here, ” he added.

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