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Senate Approves 1.88mbpd Crude Production, $57/b Oil Benchmark For 2022

By Juliet Ukanwosu

The Senate has approved the Benchmark oil price of $57 per barrel for the fiscal year 2022 and a daily crude oil production of 1.88million barrels.

The Senate which passed the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) on Wednesday approved N13.98trillion 2022 Budget.

Extractive360 reports that the passage of the 2022-2024 Medium Term Expenditure Framework followed the consideration and deliberation of a report by the Joint Committees on Finance, Local and Foreign Debts, Banking, Insurance and other Financial Institutions, as well as the Petroleum Resources (Upstream); Downstream Petroleum Sector and Gas.

The Joint Committee report was presented by Senator Solomon Olamilekan Adeola (APC, Lagos West), who chairs the Finance Committee.

The chamber during consideration of the report gave its nod to the Federal Government’s revenue projection of N8.36 trillion and proposed expenditure of N13.98 trillion.

Accordingly, it also approved the daily crude oil production of 2.23million barrel per day, and 2.22mbpd for 2023 and 2024.

Furthermore, the Senate in its recommendations adopted the Exchange Rate of N410.15/US$ by the Executive for 2022-2024; and gave its nod to the projected Gross Domestic Product (GDP) growth rate of 4.20%; as well as 13% inflation rate.

In addition, the chamber approved fiscal deficit of N5.62 trillion, new borrowings of N4.89 trillion – an amount which includes Foreign and Domestic borrowing – subject to the provision of details of the borrowing plan to the National Assembly.

The Senate also approved other parameters such as Statutory transfers totaling N613.4 billion; Debt Service estimate of N3.12 trillion; Sinking Fund to the tune of N292 billion; Pension, Gratuities and Retirees Benefits of N567 billion.

Out of the Aggregate Federal Government’s Expenditure of N13.98 trillion, the upper chamber approved the sum of N6.12 trillion for Total Recurrent (Non-debt); N3.47 trillion as Personnel Cost for Ministries, Departments and Agencies (MDAs); N3.26 trillion for Capital Expenditure (exclusive transfers); N350 billion Special Intervention (Recurrent); and N10 billion for Special Intervention (Capital).

The upper chamber in its report recommended that the Fiscal deficit estimate of N5.62 trillion also be sustained due to the Federal Government’s conservative approach to target setting and its determination to improve collection efficiency of major revenue generating agencies.

It further called on the Salaries and Wages Commission to review the salary structure of all Ministries, Departments and Agencies (MDAs), in other to come up with a new salary structure that will reflect the true financial position of the Agencies.

The chamber also demanded a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the Consolidated Revenue Fund (CRF) as at when due, in order to curtail frivolous deductions and diversion of funds by the MDAs.

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