By Editor
The Senate and the House of Representatives have approved N4 trillion to fund the fuel subsidy in 2022. This indicates an increase of N3.557 trillion – from the N442.72 billion earlier budgeted for.
The lawmakers increased oil benchmark from $62 per barrel to $73 per barrel. And approved that oil production volume increased by 283,000 barrels per day – from 1.883 million barrels per day to 1.600 million barrels per day.
The approvals were made in response to President Muhammadu Buhari’s request to the lawmakers to make adjustments to the 2022 fiscal framework.
In a letter to the Senate on Tuesday, the president explained that an adjustment to the 2022 fiscal framework became imperative in view of new developments in both the global and domestic economies.
The developments, he said, were occasioned by spikes in the market price of crude oil, which were a fallout of the Russia-Ukraine war.
“The decision to suspend the removal of Petroleum Motor Spirit (PMS) subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues”, he said.
Consideration/ recommendations
Prior to the approval of the president’s request, the Senate considered a report by the Senate Committee on Finance.
The Chairman of the Committee, Solomon Olamilekan, noted that the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99 per cent of Gross Domestic Product (GDP).
He added that “incremental deficit will be financed by new borrowings from the domestic market.”
He therefore recommended that the president’s request be approved.
Lawmakers ‘oppose’ recommendations
Lawmakers took turns to make contributions to the debate on the report.
While some blamed the country’s economic downturn on crude oil theft, a few others asked that the Senate delay the approval until certain critical questions are answered.
Olubunmi Adetunmbi (APC, Ekiti North), said the federal government and security agencies owe it a duty to stop the stealing of our common wealth.
At a time when many countries are reaping bountiful harvest due to the increase in crude oil prices occasioned by the Russia-Ukraine crisis, Nigeria is left out owing to its inability to meet its OPEC quota, he complained.
In agreement, the Senate Leader, Yahaya Abdullahi, 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 and worried about the increasing cases of oil theft despite huge resources allocated to the military, police and other security agencies.
But Betty Apiafi (PDP, Rivers West), asked the Senate not to approve the president’s request because “it spells doom for the Nigerian economy.”
While she acknowledged the fact that the maritime sector has been battling with oil theft, she wondered what the federal government has done to reduce or stop it.
She blamed the government for spending on “useless consumption” and “funding corruption” while doing very little to address oil theft.
Ms Apiafi also queried the executive for planning to slash the budget of “critical sectors” like the NDDC, UBEC, basic healthcare among others.
On his part, Gabriel Suswam (PDP, Benue) raised concerns on the widening gap in budget deficit and the federal government’s decision to resort to funding from the Capital Market.
Approval
Buhari’s request was approved after the deliberation.
The lawmakers approved a cut in the provision for federally-funded upstream projects being implemented by N200 billion from N352.80.
They approved an increase in the Federal Government Independent Revenue of N400 billion and an additional provision of N182.4 billion to cater for the needs of the Nigeria Police Force.
Also approved were 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 Senate also approved the fiscal deficit of N7.35 trillion.
In his remark, the Senate President, Ahmad Lawan, asked the executive 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 maximise profits from crude oil sales.
He said oil theft is not something to play politics with and there is a need for answers and radical decisions.
Ad hoc committee on oil theft
Mr Ahmad thereafter constituted a 13-member ad hoc committee to investigate oil theft in Nigeria and its impact on petroleum production and oil revenues.
Albert Bassey was named Chairman of the Committee.
The members are Yusuf Yusuf, Solomon Olamilekan, Kabiru Gaya, Adamu Aliero, Thompson Sekibo and Gabriel Suswam.
Others are Kashim Shettima, Sabi Abdullahi, Ali Ndume, Stella Oduah, Sani Musa and Ibrahim Gobir.
The panel was given one month to conclude work on investigations and report back to the chamber in plenary.
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