Senate passes MTEF, retains $57 per barrel as oil benchmark

The senate on Wednesday passed the medium term expenditure framework (MTEF), retaining the oil benchmark for the 2022 budget at $57 per barrel.

The upper legislative chamber also put the daily crude oil production at 1.88 million barrels per day and the exchange rate of N410 to a dollar.

The aforementioned assumptions, which the 2022 budget will be predicated on, were proposed by the federal executive council (FEC).

The upper legislative chamber did not make any adjustments to the assumptions of FEC chaired by President Muhammadu Buhari.

Before the senators passed the document, Solomon Olamilekan, chairman of the finance committee, while presenting a report, said there should be a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the federation account.

The Lagos west senator said this would curtail “frivolous” deductions and diversion of funds by miniseries, departments and agencies (MDA).

“That the daily crude oil production of 1.88mbpd, 2.23mbpd, and 2.22mbpd for 2022, 2023 and 2024 respectively, be approved, in view of average 1.93mbpd over the past three years and the fact that a very conservative oil output benchmark has been adopted for the medium term in order to ensure greater budget realism,” he said.

“That the benchmark oil price of $57 per barrel should be approved because of the clear evidence of wide consultations with key stakeholders. and the age long fiscal strategy of addressing the oil price shocks by the adoption of a higher than forecast oil price benchmark for fiscal projections over the medium term.

“That the exchange rate of N410.15 to a dollar proposed by the executive for 2022-2024 be approved.”

The senate also approved the projected gross domestic product (GDP) growth rate of 4.20 percent and projected inflation rate of 13 percent.

At the international market, Brent oil price climbed by 1.4 percent to $75.44 a barrel while U.S. West Texas Intermediate (WTI) crude futures rose 1.6 percent to $71.65 a barrel over tight supply as demand improves.