Oil benchmark – Senate, House meeting ennds in deadlock

joint sitting of the national assembly06 December 2013, Lagos – Hope of an early resolution of the differences between the two chambers of the National Assembly on the appropriate oil benchmark to be adopted in projecting the federation revenue for the 2014 budget has been dashed as the first meeting of the conference committee of both the Senate and House of Representatives raised to harmonise their positions on the matter ended in a stalemate.

At the meeting, which outcome would have determined how soon President Goodluck Jonathan would present the 2014 budget, THISDAY learnt that the two chambers refused to shift positions on their recommendations on what the oil benchmark should be. While the House had adopted $79 per barrel when it approved the 2014-2016 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Policy (FSP) last month, the Senate on its part, recommended $76.50.

However, the president in the MTEF and FSP submitted to the National Assembly in September had put the oil benchmark for the 2014 budget at $74 per barrel.

But the joint National Assembly Committee on Appropriation and Finance later had an understanding with the executive to raise the benchmark to $76.5 per barrel, an agreement that the House reneged on by fixing the oil benchmark at $79 per barrel. The meeting of the joint committee to harmonise their positions on the oil benchmark, which THISDAY learnt was held on Monday, came just as the Organisation of Petroleum Exporting Countries (OPEC), yesterday in Vienna, Austria, decided to leave oil production unchanged at 30 million barrels per day (bpd) for next year.

Briefing THISDAY on the outcome of the meeting yesterday, a senator who would not want to be named because he was not authorised to speak on the matter, said the six-man committee from the Senate tried to persuade the five-man group raised by the House to back down on its insistence on the $79 oil benchmark, to no avail. According to him, each of the committees stuck to its position and thus resulting in the meeting ending without breaking the deadlock on the oil benchmark.

Failure of both chambers of the National Assembly to agree on a uniform oil benchmark for 2014 budget had forced Jonathan to postpone indefinitely, its presentation that was earlier scheduled for November 12. While the nation was waiting for the presentation of the budget to the joint session of the National Assembly on November 12, Jonathan had written two separate letters to the Senate and House where he announced the postponement of the budget presentation, citing lack of uniform oil benchmark as well as the need to leave the lawmakers with more time to resolve the differences. Since the deferment of the budget presentation, the National Assembly has been making efforts to resolve the differences between the two chambers of the legislature. The Senate set up its own harmonisation committee on November 20, with the hope of resolving the impasse that week while the House did not constitute its committee until November 28, thus prolonging the stalemate. The Senate had upon the constitution of its harmonisation committee, expressed optimism that the president would present the budget last week with the hope that the House would toe its path by simultaneously constituting its own committee the previous week. But the hope was truncated as the House did not do so until last week. Senate spokesman, Senator Enyinnaya Abaribe, confirmed to THISDAY that the meeting was held on Monday. His comment was also echoed by Chairman, Senate Committee on Rules and Business, Senator Ita Enang, who told THISDAY via a telephone conversation that the meeting was called by the conference committee chairman, Senator Ahmed Makarfi, following the constitution of the harmonisation committee of the House last week. The Senate committee is headed by Chairman, Senate Committee on Finance, Senator Ahmed Markafi. Other members of the committee are Abaribe (Abia South), Enang (Akwa Ibom North-east), Senator Smart Adeyemi (Kogi West), Senator Bello Tukur (Adamawa Central) and Senator Ayo Akinyelure (Ondo Central).

On the other hand, the House harmonisation committee is headed by its Committee Chairman on Finance, Hon. Abdulmumini Jibrin (PDP, Kano). Other members of the committee are Hon. Adeyinka Ajayi (APC, Osun); Hon. Ibrahim Gusau (APC, Zamfara); Hon. Abdurahman Teraff (APC, Borno) and Hon. Forte Dike (PDP, Anambra). Meanwhile, OPEC yesterday at its 164th meeting in Vienna, Austria, decided to leave oil production unchanged next year. The 12-member group expressed satisfaction with the current oil prices and resolved to renew its current oil output cap of 30 million barrels per day (bpd) for the first six months of 2014. “The conference reviewed the oil market outlook, as presented by the secretary general, in particular supply/demand projections for 2014. The conference also considered the global economic outlook, again noting: the high sovereign debt in the Euro zone; high unemployment in the advanced economies, especially the Euro zone; and slow growth, coupled with inflation risk, in the emerging economies”, the organisation said in a statement yesterday.

The group observed that the biggest challenge facing global oil markets in 2014 was the global economic uncertainty, with the fragility of the Euro zone remaining a cause for concern. It was also noted that although world oil demand is forecast to increase in 2014, this would be more than offset by the projected increase in non-OPEC supply. “Nevertheless, in the interest of maintaining market equilibrium, the conference decided to maintain the current production level of 30.0 million barrels a day. In taking this decision, member countries re-confirmed their readiness to swiftly respond to developments which could have an adverse impact on the maintenance of an orderly and balanced oil market,” the group added.

The conference also elected Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, as alternate president for one year, with effect from January 1, 2014. Libya’s Minister of Oil and Gas, Dr. Abdel Bari Ali Al-Arousi, was elected president for the same period. Also, the term of OPEC Secretary General Abdalla el-Badri was extended by one year.
*Chika Amanze Nwachukwu and Omololu Ogunmade, Thisday

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