Senate Increases Oil Benchmark To $73, Approves MTEF/FSP

Lawmakers To NNPC: End Petrol Scarcity Now

The Senate has approved the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) in advance of debating the budget proposal for 2023.

The documents were approved by the upper legislative chamber on Wednesday, after the finance committee’s chairman, Solomon Olamilekan, presented a report on the MTEF/FSP.

The MTEF/FSP are parameters that any country’s budget is based on.

On Friday, President Muhammadu Buhari will present the N19.76 trillion 2023 budget to the National Assembly in a joint session.

During his presentation to the Senate, Olamilekan suggested that “the oil price of $73 per barrel of crude oil be approved as a result of the continuous increase in the oil price in the global oil market and other peculiar situations such as Russia’s continuous invasion of Ukraine, as this will result in savings of N155 billion.”

“That the cost of petroleum subsidy be capped at N3.6 trillion accordingly,” he said.

“Significant reduction in both waivers and tax exemptions of corporate organisations to cushion the effect of budget deficit.

“Aggregate federal government expenditure of N19.76 trillion; made up of total recurrent (non-debt) of N8.53 trillion; personnel costs (MDAs) of N827.8 billion; of capital expenditure (exclusive of transfers) N3.96 trillion; special intervention (recurrent) amounting to N350 billion; and special intervention (capital) of N7 billion.

“That the relevant oversight committees of the national assembly are at liberty to remove recycled projects in their budget proposal during the committees’ budget defence.”

Given the report, the Senate approved $73 as the oil benchmark, a $3 increase over what the executive branch proposed.

The executive proposed setting the oil benchmark at $70.

The Senate also kept the projected crude production of 1.69 million barrels per day (bpd) for the 2023 budget.

It also kept the exchange rate at N437.57, as proposed by the executive.

Furthermore, the upper legislative chamber kept the GDP growth rate at 3.75 percent and the projected inflation rate at 17.16 percent.

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