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Controversy over oil price benchmark is unnecessary – Sanusi Lamido

By on October 22, 2012

Governor of Central Bank, Mallam Lamido Sanusi, has decried the controversy over the oil price benchmark for the 2013 budget.

Sanusi, who spoke to our correspondent in Jos, Plateau State, after delivering the second annual lecture on the 87th birthday of former Head of State, Gen Yakubu Gowon, at the National Institute for Policy and Strateic Studies, Kuru, near Jos, said having more money to spend was not the solution to the country’s woes, but how to improve the quality of capital expenditure.

While government had pegged the oil price for the 2013 budget at $75 per barrel, members of the National Assembly wanted the government to jerk it up to $80 per barrel

The CBN governor said the pegging of the oil price at $75 per barrel was to make the budget more realistic, especially with the fluctuations experienced by the Nigerian National Petroleum Corporation.

He said, “The revenue assumptions of the budget involve two variables and they are fundemental issues. It assumes price and assumes quantity. This budget already assumes 2.53 million barrels a day for 365 days in 2013. In my view, given the historical performance of NNPC, that output projections are already over optmistic. NNPC will never achieve that target. Historically, it had failed to bring up enough money for 2.3 million barrels per day or 2.2 mbd.

“The underestimation does not just come from price, it comes from output. Now output is actually when you have more control. If you are going to have a budget that says NNPC is going to produce 2.35 mbd, do we have any process to determine that NNPC actually produces that quantity daily? Do we know how much NNPC produces? And do we know that everything that is produced in this country translates into revenue that gets back to government and which government hardly gets?

Sanusi said the reason why government did not get all the derivable revenue was because of the leakages in the production process, through illegal piping of petroleum products and illegal refining

He said, “We know for a fact that there are illegal refineries, illegal pipelines; we know where these refinries are, we know who own them. I mean, does anybody ever believe that security services in Nigeria do not know where the illegal refineries are located in the Niger Delta or who own them? Those are the leakages.



Source: PUNCH

One Comment

  1. PenJudge St Mike

    October 23, 2012 at 6:18 am

    Gen. Gowon should be m’rking his 78th birthd’y, not 87 yet. However S’nusi h’s been consistent with this theory of le’king economy. Couldn’t someone t’ke up the ch’llenge n burst his theory. With tremendous le’k’ges coming from oil sector ;lone is enough to find out wh’t is wrong with our security system. We must listen to him on this n tell our NASS to join in the fight with S’nusi to block those mentioned le’k’ges in the economy before they could insist on $80 bentchm’rk. Let us think.