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$79 for Oil Benchmark Approved By National Assembly

By on December 19, 2012

In its outlook for the 2013 budget year, the National Assembly has adopted the benchmark of $79 as the oil benchmark for the period 2013-2015 Medium Term Expenditure Framework (MTEF) and fiscal strategy paper.

The House of Representatives also gave its nod for the production of crude oil to be retained at 2.526 million barrels per day for the year 2013, 2.611 million barrels per day for 2014 and 2.648 million barrels per day for 2015.

The approval of the benchmark came after several weeks of disagreement between the two chambers of the House after the Finance Minister, Dr Ngozi Iweala had also visited the National Assembly to explain the benchmarking issue.

With this approval, the government will be saddled with the responsibility of ensuring any variation in the volatile international oil market is managed judiciously, through the excess crude account.

Harmonized report for the new benchmark for the oil was endorsed on behalf of the Senate by Senators Ahmed Makarfi, Barnabas Gemade, Andy Uba, Clever Ikisikpo, Olubunmi Adetunbi and Abdulkadir Jajere.

For the House of Representatives the report was also endorsed by Honn Abdulmuin Jubrin (Chairman, Finance Committee), Mr John Enoh (Chairman, Appropriation Committee), Hon Bamidele Opeyem, Hon Badamasiu Al-Rahman, Hon Hassan El-Badawy, and Hon Uzo Azubuike.

On the issue of the Budget implementation the National Assembly joint committee stated that “The habit of poor budget implementation and return of unspent funds will continue in the medium term, this indefensible fiscal habit is at variance with the hallmarks of best practices and should not be encouraged, government must ensure full implementation of the budget.”

It was agreed that the over $4 increase above the $75 proposed by the Executive will used to also finance major infrastructure projects, reduce the budget deficit and also cut down on the domestic borrowing level of the Nation.

The Joint National Assembly committee also cautioned the government against unnecessary borrowing and also endorsed the Corporate Tax of 30% and the Value added Tax of 5% be adopted for the 2013-2015 period.