Senators dare Jonathan, approve $76.5 oil benchmark for 2014 budget

The Senate on Wednesday adopted the report of its committee on the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the implementation of the 2014 budget, which fixed the oil benchmark at $76.5 per barrel for the 2014 budget.
President Goodluck Jonathan had, however, projected $74 per barrel for the 2014 fiscal year.
The 2013 budget is being implemented based on $79 per barrel after an initial disagreement between the legislative and executive arms of government on the appropriate figure.
The senators on Wednesday were initially divided on the adoption of the committee’s report after it was presented by the Chairman of the Joint Committee on Finance and Appropriation, Senator Ahmed Markafi.
Senators Adegbenga Kaka, Ali Ndume and Olubunmi Adetunbi demanded the rejection of the MTEF from the Presidency or the suspension of debate on the report to enable members to have enough time to study the document.
The senators argued that there was inadequate explanation on the need to increase the oil benchmark contrary to Jonathan’s recommendation.
They also complained about unsatisfactory implementation of the 2013 budget and an alleged overspending on recurrent expenditure to the detriment of the capital projects.
But Senators Nenadi Usman, Ike Ekweremadu, Ita Enang, Abdul Ningi, Ganiyu Solomon, Isa Galaudu and Ali Ndume expressed the need to discuss and approve the document.
The President of the Senate, David Mark, also cautioned his colleagues on the implication of discarding the report, which would imply the rejection of the METF document.
The Makarfi report also recommended a drastic reduction in the cost of governance and improved revenue collection with a view to attaining a recurrent/capital expenditure ratio of 60/40.
The committee condemned the continuous rollover of unspent balances of the Subsidy Reinvestment and Empowerment Programme allocation from 2012 to 2013 and now to 2014.
It wondered why the current MTEF/FSP did not give sufficient explanation as to why the SURE-P allocation could not be exhausted within a budget circle and no explanation was offered for increasing the running cost of the SURE-P management from N1bn in 2013 to N l .20bn in 2014.
The committee noted that its earlier recommendation on the need to attach details of projects to be executed under the Sure-P budget for scrutiny and approval of the National Assembly had been ignored by the executive.
It noted that details of projects to be executed under SURE-P should accompany the budget estimates.
The committee noticed with dismay, the provision of N971.138bn for petroleum product subsidy for the 2014 fiscal year, which was the same amount paid in 2013, while projections for 2015 and 2016 were slightly increased without any explanation.
The report added, “There is need here for further scrutiny to ensure accountability, prudence and transparency. Above all, a definite period must be worked out at which the nation will stop the importation of refined petroleum products into the country.
“The nation’s refineries must be made to work at full capacity, and new ones brought on stream to energise the policy.
“We could not get explanation from any of the agencies if the subsidy payment projection include subsidy on kerosene. Hence, the Senate Committee on Downstream Petroleum should strive to get details of subsidy payments for effective oversight functions.
“The Joint Committee observed that the effective benchmark proposed by the executive is about $80pb and not $74pb because of distribution from Excess Crude Account totalling N666.9bn already built into the Revenue and Expenditure Framework.”

- The Citizen

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