Tuesday, 2 October 2012

MTEF: House recommends $82/barrel oil benchmark

The Joint House Committee on Finance, Legislative Budget and Research, National Planning and Economic Development as well as Loans, Aids and Debt, which is saddled with the responsibility of scrutinizing the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper has recommended an increase in the crude oil benchmark for the 2013 budget from $75 to $82 per barrel.
It has also slashed the budget deficit for next year from N1.3 trillion to N791.26 billion and is proposing that internal borrowing be reduced from N727.19 billion to N381.25 billion, representing a 52 per cent cut.
The hike of the oil benchmark is expected to increase the federally collectible revenue in 2013 from N7.3 trillion to N7.9 trillion, and will also increase the Federal Government's share of revenue from N3.561 trillion to N4.137 trillion.
In a report presented to the House, the committee observed that the gloomy picture painted by government on the volatility in the global oil market and fears that crude oil prices may crash within the period under review was not realistic. The report addresses modifications to the MTEF and Fiscal Strategy Paper based on the contributions of members of the House at their meeting. It is also premised on submissions by revenue generating and accounting agencies of government.

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