Senate approves $57 oil benchmark for 2022 budget

Edwin Akwueh, Abuja


Nigerian Senate on Wednesday approved the 2022-2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) while pegging the Benchmark oil price at 57 Dollars per barrel.

This followed the presentation and consideration of the report of the Senate joint Committee on Finance; National Planning; Foreign and Local Debts; Banking Insurance and other Financial Institutions; Petroleum Resources (Upstream);

Chairman of the Joint Committee, Senator Solomon Olamilekan while presenting the report, confirmed that the report contains 18-point recommendations.

He recalled that the Senate had on Tuesday, July 13, considered the request of President Muhammadu Buhari on the MTEF/FSP, which provides the basic structure for the estimates and assumptions that underlie the annual budgets.

Senator Olamilekan confirmed that the committee approved the Benchmark oil price of $57 per barrel because of the clear evidence of wide consultations with key stakeholders. “And also because of the age-long fiscal strategy of addressing the oil price shocks by the adoption of a higher than forecast oil price benchmark for fiscal projections over the medium term; 

Other recommendations included that the daily crude oil production of 1.88 million barrels per day, 2.23 1.88 million barrels per day and 2.22 1.88 million barrels per day for 2022, 2023 and 2024 respectively, be approved.

“This is in view of average 1.93  million barrels per day over the past three years and the fact that a very conservative oil output benchmark has been adopted for the medium term in order to ensure greater budget realism.

“That the Exchange Rate of =N=410.15 Dollars proposed by the Executive for the 2022-2024 be approved; “That the projected Inflation rate of 13.00 per cent be also approved.

“That the projected New Borrowings of =N=4.89 trillion (including Foreign and Domestic Borrowing) be approved, subject to the provision of details of the  borrowing plan to the National Assembly.

“That the Salaries and Wages Commission should review the salary structure of all the MDAs, in order to come up with a new salary structure for the MDAs that will reflect the true financial position of the Agencies.

“That the proposed budget of the Government-Owned Enterprises (GOEs) should be reviewed upward to show the reflection of their capabilities to generate more revenue as a result of the findings of the Joint Committee.”

Senator Olamilekan also noted that the committee also recommended the urgent implementation of the Petroleum Industry Act (PIA) recently assented to by the President in order to curtail the problems of smuggling and round-tripping of petroleum products imported into the country.

President of the Senate, Ahmad Lawan urged his colleagues to live up to expectation in the area of oversight.”

Senator Lawan also urged the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and other major revenue-generating agencies to explore other strategies that could help the government to generate more revenues.



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