Oil Benchmark: House, Okonjo-Iweala heading for collision

The row over the oil benchmark for the 2013 budget has continued with the House of Representatives calling on the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to either obey the law or resign. According to the House, the minister’s insistence on the $75 per barrel oil benchmark breached the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper passed by the House on October 9. The House had approved $80 as the oil benchmark for revenue projections in the 2013 budget under the MTEF.

The Chairman, House Committee on Finance, Dr. Abdulmunini Jibrin, said the MTEF was already a law that must be complied with just as the 2013 Appropriation Bill will pass through second reading today during plenary in the House.

However, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said the adoption of $75 as the oil benchmark for the 2013 Budget was to curb inflation. Okonjo-Iweala said a higher oil benchmark would not only lead to higher inflation but also a decline in the value of the naira and also lead to lower savings and reduced investment.