Budget 2020: Senate increases oil price benchmark to $28

The Senate on Tuesday increased the 25 dollars per barrel oil price benchmark proposed by the executive in the revised Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) forwarded to it for approval.

Budget 2020: Senate increases oil price benchmark to $28The upper chamber made the increase on the oil price benchmark to 28 Dollars.

The resolution was sequel to the consideration and adoption of report of its Committee on Finance mandated to work on the revised MTEF/FSP documents by the executive during plenary.

The Chairman of the Committee, Sen. Solomon Olamilekan, presented the report.

Olamilekan in his submission said the increase effected on the oil price benchmark was as a result of the recent upward trend of the crude oil market which stood at 38 Dollars per barrel with a very strong expectation that the price would rise to as high as 40 to 45 Dollars per barrel.

The senate also reduced from 1.9 million barrel per day to 1.8 million barrel per day oil production proposed by the executive in the MTEF/FSP documents.

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This is as it declared monies kept in the Natural Resources Development Accounts as waste.

However, other critical parameters including the exchange rate of N360 to a US dollar, 14.43 inflation growth rate and 4.42 Gross Domestic Product (GDP) growth rate were retained.

Other assumptions cum proposals retained include N5.09 trillion Federal Government’s revenue, N10 .51 trillion proposed expenditure, N4.95 trillion fiscal deficit, N4.17 trillion new borrowings (including Foreign and domestic Borrowings).

The Senate also retained the critical components of the proposal as presented by the executive with adoption of N10.51 trillion as total expenditure, N4.93 trillion as total recurrent, N2.83 trillion for personnel cost and N2.23 trillion for capital expenditure.

In his remarks, President of the Senate, Ahmad Lawan urged the Senate Committee on Privatisation to liaise with the Bureau of Public Enterprise (BPE) in ensuring that the projected N260 billion from proceeds of privatised agencies was realised and accordingly used to fund the budget.

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He frowned at some of the special accounts being kept by the executive, particularly the Natural Resources Development Accounts.

According to him, such accounts at this time of scarcity of funds to finance the budget are not all that necessary.

“Keeping monies in Natural Resources Development Accounts is more of waste than serving critical purposes,” he said.

He thereafter adjourned sitting of the Senate to Tuesday, June 9, for consideration and possible passage of the revised N10.509 trillion 2020 budget.