As the global price of crude oil
continues to fall in the international market, the final benchmark on which the
2015 budget will be predicated will now be decided by the National Assembly,
THISDAY learnt at the weekend. Making this disclosure to THISDAY on the
telephone, Senate Committee Chairman on Finance, Senator Ahmed Makarfi, laid to
rest assumptions in some quarters that the federal government might be left
with no option than to further review downward the proposed $65 oil benchmark
it submitted last December. According to Makarfi, since the budget had
eventually been submitted to the National Assembly by the executive, it is now
the responsibility of the federal legislature to decide whether it will approve
the oil benchmark as submitted by the government or fix a new one. The federal
government had proposed $78 oil benchmark in the Medium Term Expenditure
Framework (MTEF) and Fiscal Strategy Policy (FSP) it first submitted to the
National Assembly in September last year. But following the dwindling oil price
in the international market, the National Assembly returned the document to the
executive, describing the proposed benchmark as unrealistic and therefore
advised the federal government to propose a fresh one bearing in mind the
falling oil price. Acting on the advice, the executive reduced the benchmark
from $78 to $73 as contained in the second MTEF it re-submitted to the National
Assembly in November. But this reduction notwithstanding, the federal
government had to further review downward the benchmark from $73 to $65 as
contained in another MTEF it again submitted to National Assembly on December
2. However, after the latest review, oil price slumped further below the $65
newly proposed benchmark. But the optimistic federal government said it would
not review the benchmark further downward with the hope that oil price will
hover between $65 and $70 in 2015. But the situation has further worsened since
then, resulting in the fall of oil price to as low as $53, prompting questions
on whether the government will again withdraw the MTEF along with the 2015
budget it laid before the National Assembly on December 17, 2014. But Makarfi
put the record straight at the weekend, explaining that since the budget had
already been handed to the National Assembly, the question of withdrawing it
for further adjustment will not arise. Instead, he said it is now the business
of the National Assembly to decide on whether to approve the benchmark as
submitted by the federal government or reduce it in observance of the
persistent fall of oil price in the global market.
ThisDay (online)
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