Senate approves Buhari’s revised 2022 fiscal framework, increases oil benchmark to $73 from $62

The Senate, on Thursday, approved President Muhammadu Buhari’s request for adjustments to the 2022 fiscal framework. 

The approval followed the consideration of a report by the Senate Committee on Finance. 

The report was laid by the Chairman of the Committee, Senator Olamilekan Adeola.

Buhari had requested the upper chamber to approve an increase in the oil benchmark by $11 per barrel, from $62 per barrel to $73.

The President also sought a reduction in the projected oil production volume by 283,000 barrels per day, from 1.883 million barrels per day to 1.600 million barrels per day.

He also asked the chamber to approve an increase in the estimated provision for PMS subsidy for 2022 by N3.557 trillion, from N442.72 billion to N4trillion.

President Buhari, underscored the need for a cut in the provision for Federally funded upstream projects being implemented by N200 billion, from N352.80 billion to N152.80 billion.

He proposed an increase in the projection for Federal Government Independent Revenue by N400 billion; and an additional provision of N182.45 billion to cater for the needs of the Nigerian Police Force.

Accordingly, the chamber approved $73 per barrel as proposed by President Buhari.

It also approved Oil Production Volume of 1.600 million per day; Petroleum Motor Spirit (PMS) subsidy of N4trillion and a cut in the provision for Federally funded upstream projects being implemented by N200 billion from N352.80.

While approving an increase in the Federal Government Independent Revenue of N400 billion, the chamber gave its nod for an additional provision of N182.4 billion to cater for the needs of the Nigeria Police Force.

It approved debt service provision of N76.13 billion, and net reductions in Statutory Transfers by N66.07 billion. 

A breakdown of the net reductions are as follows: NDDC, by N13.46 billion from N102.78 billion to N89.32 billion; NEDC, by N6.30 billion from N48.08 billion to N41.78 billion; and UBEC, by N23.16 billion from N112.29 billion to N89.13 billion. 

Others are Basic Health Care Fund, by N11.58 billion from N56.14 billion to N44.56 billion; and NASENI, by N11.58 billion from N56.14 billion to N44.56 billion.

The chamber also approved the fiscal deficit of N7.35 trillion.

Adeola, in his presentation, said that the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99% of Gross Domestic Product (GDP). 

He disclosed that the incremental deficit will be financed by new borrowings from the domestic market.

The awmakers, who took turns to make contributions during consideration of the report on the review blamed the country’s economic downturn on crude oil theft. 

Senator Olubunmi Adetunmbi (Ekiti North), said the Federal Government and security agencies owe it as a duty to stop the stealing of our common wealth. 

He lamented that at a time when most countries of the world are reaping bountiful harvest due to the increase in crude oil prices occasioned by the Russia-Ukrainian crisis, Nigeria is left out owing to its inability to meet its OPEC quota. 

The Senate Leader, Yahaya Abdullahi, who spoke along the same lines as Adetunmbi, said the country should be in a state of mourning over what is currently happening to it.

He attributed the failure of security agencies to protect oil assets as a major reason for the decline of the economy.

He expressed worry over the increasing cases of oil theft inspite of huge resources allocated to the military, police and other security agencies. 

Other such as Senators Gabriel Suswam (Benue North East), Betty Apiafi (Rivers West), called on the chamber not to hastily approve the President’s request to adjust the 2022 fiscal framework until certain questions are answered. 

While Suswam raised concerns on the widening gap in budget deficit and the federal government’s decision to resort to funding from the Capital Market, Apiafi, on the other hand, demanded answers from the NNPC and relevant agencies on solutions in place to curb crude oil theft. 

The Senate President, Ahmad Lawan, in his concluding remarks, called on the Federal Government to take “radical” steps towards stopping the theft of crude oil by economic saboteurs.

He also called for a stop to the importation of refined petroleum products into the country, so as to cut down on expenditures incurred in the process, as well as to maximize profits from crude oil sales.