Despite OPEC price falling to $35 per barrel, Ekweremadu insists on $40 benchmark

‎Ike Ekweremadu, deputy senate president, has asked the senate to review upward the crude oil benchmark for the 2016 budget.

Ekweremadu was making his argument hours after crude oil prices in the Organisation of Petroleum Exporting Countries (OPEC) basket fell to an all-year low of $35.30.

Leading the debate on the Medium Term Expenditure Framework (MTEF), the deputy senate president‎, argued that the $38 oil benchmark projected for the 2016 budget by the federal government was ” conservative”.

Therefore, he urged the senate to peg the oil benchmark for the 2016 budget at $40 per barrel.

“I have looked at the projection for the oil price. The benchmark of $38 per barrel. That appears to me to be conservative. From the projection of oil price for 2016, it is estimated‎ that it will hover between $40 and $45,” he said.

“I like to suggest that the senate consider an oil benchmark of $40. I’m sure that this will help cushion the problems we have in the states.”

However, Adamu Aliero, a senator from Kebbi state‎, argued against Ekweremadu’s proposal, saying it was unrealistic.

“It is unrealistic. I therefore recommend we take it to $35 per barrel,” he said.
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‎Aliero added that it had been projected that the global price of crude oil would fall further in 2016. The global price of crude oil fell from $38 to $35 on Wednesday.‎

President Muhammadu Buhari, in a letter to the national assembly on Tuesday, proposed N500bn for social welfare programme in the 2016 budget.‎
“The federal government will collaborate with state governments to‎ institute well-structured social welfare intervention programme such as- school feeding programme initiatives, conditional cash transfer to the most vulnerable, and post National Youth Service Corps (NYSC) grant,” the president said in a letter containing the Medium Term Expenditure Framework (MTEF) read on the floor of the upper legislative chamber.
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“N500 billion has been provisioned in the 2016 budget as social investments for these programmes.”

Buhari added that the interventions would start as a pilot scheme, and that the government would work towards securing the support donor agencies and development partners in order to minimise potential risks.‎

The senate is currently debating the framework.