- Sets up ad hoc committee on oil theft
THE Senate has approved N4 trillion to fund petrol subsidy and debt service provision of N76.13 billion, with net reductions in Statutory funds reducing budget allocations for basic health provision and Universal Basic Education.
The N4 trillion approval for petrol subsidy signposts an increase of N3.557 trillion as the initial allocation was N442.72 billion.
The lawmakers raised the oil benchmark used for the 2022 budget from $62 per barrel to $73 per barrel just as it also approved that oil production volume increased by 283,000 barrels per day, swelling from 1.883 million barrels per day to 1.600 million barrels per day.
The approvals followed President Muhammadu Buhari’s request to the National Assembly to make adjustments to the 2022 fiscal framework in a letter he forwarded to the Senate on Tuesday in which he explained that an adjustment to the 2022 fiscal framework became necessary following new developments in global and domestic economies.
The president said the development were due to spikes in the market price of crude oil, resulting from, among other things, the Russia-Ukraine war.
Although a major oil producer, Nigeria lacks capacity for local refining of petroleum, a situation which President Buhari had promised to remedy in his change agenda while campaigning to be elected in 2015.
Buhari, in his request for approval to the raised petrol subsidy said the “decision to suspend the removal of Petroleum Motor Spirit (PMS) subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues”, he said.
Before the approval of the president’s request, the Senate considered a report by the Senate Committee on Finance. The Chairman of the Committee, Senator Solomon Olamilekan, noted that the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99 per cent of Gross Domestic Product (GDP). He stated that the “incremental deficit will be financed by new borrowings from the domestic market.” He therefore recommended that the president’s request be approved.
However, in their contributions to the debate on the report, some lawmakers blamed the country’s economic downturn on crude oil theft; while others asked that the Senate delay the approval until some pertinent questions were asked and answered.
Senator Olubunmi Adetunmbi (APC, Ekiti North), said the federal government and security agencies owe it a duty to stop oil theft, adding that at a time when many countries are reaping bountiful harvest due to the increase in crude oil prices as a result of the Russia-Ukraine crisis, Nigeria is denied that benefit because of its inability to meet its OPEC quota.
The Senate Leader, Senator Yahaya Abdullahi, said the country should be in a state of mourning over what is currently happening to it. He blamed the failure of security agencies to protect oil assets as a major reason for the decline of the economy and worried about the increasing cases of oil theft despite huge resources allocated to the military, police and other security agencies.
For Senator Betty Apiafi (PDP, Rivers West), the Senate should not approve the president’s request because “it spells doom for the Nigerian economy.” While she acknowledged the fact that the maritime sector has been battling with oil theft, she wondered what the federal government has done to reduce or stop it.
She blamed the government for spending on “useless consumption” and “funding corruption” while doing very little to address oil theft. Senator Apiafi also queried the executive for planning to slash the budget of “critical sectors” like the NDDC, UBEC, basic healthcare among others.
On his part, Gabriel Suswam (PDP, Benue) raised concerns on the widening gap in budget deficit and the federal government’s decision to resort to funding from the Capital Market.
Despite the opposition, the president’s request was approved as the lawmakers approved the reduction in the provision for federally-funded upstream projects being implemented by N200 billion from N352.80.
The lawmakers approved an increase in the Federal Government Independent Revenue of N400 billion and an additional provision of N182.4 billion to cater for the needs of the Nigeria Police Force. Also approved were debt service provision of N76.13 billion, and net reductions in Statutory Transfers by N66.07 billion.
Among other the net reductions include the following: NDDC by N13.46 billion – from N102.78 billion to N89.32 billion; NEDC by N6.30 billion from N48.08 billion to N41.78 billion; UBEC, by N23.16 billion from N112.29 billion to N89.13 billion; Basic Health Care Fund by N11.58 billion from N56.14 billion to N44.56 billion; and NASENI by N11.58 billion from N56.14 billion to N44.56 billion.
The Senate President, Senator Ahmad Lawan, advised the executive to take radical steps towards ending oil theft and called for a stop to the importation of refined petroleum products into the country in order to reduce expenditures incurred in the process and maximise profits from crude oil sales.
He said oil theft is not something to play politics with and there is a need for answers and radical decisions.
The Senate President thereafter constituted a 13-member ad hoc committee to investigate oil theft in Nigeria and its impact on petroleum production and oil revenues. He named Senator Albert Bassey as chairperson of the committee, while members include Senators Yusuf Yusuf, Solomon Olamilekan, Kabiru Gaya, Adamu Aliero, Thompson Sekibo and Gabriel Suswam. Others are Senators Kashim Shettima, Sabi Abdullahi, Ali Ndume, Stella Oduah, Sani Musa and Ibrahim Gobir.
The panel has one month to conclude its investigation and report back to the chamber in plenary.
