Senate raises crude oil benchmark to $28 per barrel from $25

The senate has raised the price of crude oil from $25 as proposed by the executive to $28 per barrel.

The budget benchmark was approved after Solomon Olamilekan, chairman senate committee on finance, presented a report on the revised medium term expenditure framework (MTEF) and fiscal strategy paper (FSP).

The MTEF and FSP which the 2020 budget was predicated on was amended after a drop in crude oil prices owing to the COVID-19 pandemic.

The upper legislative chamber also fixed oil production at 1.8 million barrels per day.

“That due to current realities and downturn in the global economy the N360 /US $1 as proposed in the MTEF amendment by sustained with continuous effort by the Central Bank of Nigeria to stabilise the exchange rate ensures to no further devaluation of naira against the dollars and also call on the executive for strong diversification of the economy,” Olamilekan said while representing recommendations of his committee.

“That the sum of N500 billion intervention fund drawn from various special accounts,and with the utilisation of the fund clearly stated, and projects already added to the proposed revised 2020 budget sent to the national assembly be approved by the senate.”

The senate urged the Nigeria National Petroleum Corporation (NNPC) to minimise the production of oil per barrel.

“That the NNPC works on the various cost components, with a view to minimizing the production cost per barrel, and should take action on the petroleum industry bill,” he said.

“That the non-oil revenue which include the capital gains tax, stamp duty and company income tax be sustained as contained in the proposed MTEF/FSP amendment with serious supervision with a view of blocking revenue leakages within the system.”

The 2020 budget was initially passed on a benchmark of $57 per barrel and later adjusted to $25 by the federal executive council.