Budget: Reps suggest $40-$45 oil benchmark

14 January 2015, Abuja – Some members of the House of Representatives on Tuesday suggested that the crude oil benchmark price for the 2015 budget should be between $40 and $45.

However, they were hesitant to elaborate on the issue as they reasoned that this was a difficult time to make realistic projections on the price of crude.

House-of-Reps-sessionThe members spoke as the House rescheduled the debate on the budget for Wednesday (today).

President Goodluck Jonathan had proposed $65 per barrel as the oil benchmark for the N4.3tn budget proposals he sent to the National Assembly on December 17, 2014.

The $65 was a drop from the $78 the Federal Government initially proposed for the budget in the first Medium Term Expenditure Framework it submitted to the National Assembly for 2015-2017.

Between the date of the submission of the proposals and now, global oil prices have further crashed to around $46, heightening tension in the country because of its almost total dependence on crude oil export for government revenue.

As a result of the slump in oil prices, attention has been shifted to the National Assembly, especially on the possible benchmark the lawmakers will base the budget on.

Members of the House, who spoke with our correspondent ahead of today’s (Wednesday) debate, suggested $40 to $45 as the benchmark.

A number of the lawmakers chose to speak off the record on the grounds that the issue was a really difficult one to comment on authoritatively right now.

But, Mr. Eddie Mbadiwe, a member from Imo State, said he would go for $40.

Mbadiwe said he did not see the oil price settling at $45 or $46, adding that it could “go down further.”

“We are nearing the end of winter, meaning that the demand for fuel for heating will fall more. For me, $40 will be ideal; the price will possibly drop down from $46 and may stop somewhere before $40,” he added.

Several lawmakers also suggested $40, saying that they were likely to go with a similar proposal made by some senators.

On his part, a member from Rivers State, Mr. Adrew Uchendu, proposed $45.

When reminded that the price of oil was already in the neighbourhood of $45, Uchendu said $45 would stop the government from misusing any excess that would have accrued from $40.

He said, “I would have said $40, but I won’t do so. My reason is simple. Government will play around with any excess from $40. So, I go for $45; in that way, there will be little to play around with.

“Past experiences have taught us a lot of lessons.”

A member from Plateau State, Mr. Bitrus Kaze, said there was no guarantee that either $40 or $45 was realistic.

“Nothing is certain for now. You can pass any figure but it is not a guarantee that the price will not fall further. We can also not deny the fact that oil will climb back to over $100 in another few weeks from today. So, for me, whether you say $40, $45, $65 or $70, there is no guarantee that it will be so,” he added.

Efforts by our correspondent to get the views of the Chairman, House Committee on Appropriation, Mr. John Enoh, and his counterpart in Finance, Mr. Abdulmumin Jibrin, failed on Tuesday.

The two members made brief appearances in the chamber but hurriedly left before the close of sitting.

Repeated calls to their mobile telephone lines were not answered, neither were text messages replied.

The House had initially tabled the budget proposal for debate on Tuesday (yesterday), but suddenly rescheduled it for today.

When the Speaker, Mr. Aminu Tambuwal, called on the Majority Leader, Mulikat Akande-Adeola, to open the debate, she made excuses that enough copies had not been circulated to members yet.

As a result, Tambuwal rescheduled the debate for today (Wednesday) to allow all the members to get their copies of the budget.


– The Punch


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