The Senate has increased the crude oil benchmark to $28 per barrel as against the $25 per barrel proposed by the federal government in its revised 2020 budget proposal.
The budget was approved by the upper chamber of the parliament after Mr Solomon Olamilekan, Chairman of the Senate committee on finance, presented a report on the revised medium term expenditure framework (MTEF) and fiscal strategy paper (FSP) at the plenary session in Abuja on Tuesday.
The MTEF and FSP, which the 2020 budget was based upon, was amended in March after crude oil prices crashed due to events surrounding the COVID-19 pandemic.
The ninth senate under the leadership of Mr Ahmed Lawan also fixed oil production at 1.8 million barrels per day.
“That due to current realities and downturn in the global economy the N360/$1 as proposed in the MTEF amendment by sustained with continuous effort by the Central Bank of Nigeria (CBN) to stabilise the exchange rate ensures to no further devaluation of Naira against the dollars and also call on the executive for strong diversification of the economy,” Mr Olamilekan said while presenting the recommendations of his committee.
“That the sum of N500 billion intervention fund drawn from various special accounts, and with the utilisation of the fund clearly stated, and projects already added to the proposed revised 2020 budget sent to the national assembly be approved by the Senate,” he added.
The Senate then urged the Nigeria National Petroleum Corporation (NNPC) to minimise cost of the production of oil per barrel, one of the highest in the world.
“We recommend that the NNPC work on the various cost components, with a view to minimizing the production cost per barrel, and should take action on the Petroleum Industry Bill (PIB),” the red chamber side of the National Assembly said.
“Also, that the non-oil revenue which include the capital gains tax, stamp duty and company income tax be sustained as contained in the proposed MTEF/FSP amendment with serious supervision with a view of blocking revenue leakages within the system,” it further said.
The 2020 budget was initially passed on a benchmark of $57 per barrel in December 2019, but due to plunge in prices of the commodity, which accounts for a large chunk of the country’s revenue, it was first adjusted to $30 per barrel in March 2020 and later $25 per barrel by the Federal Executive Council (FEC) in May 2020.
