N’Assembly Likely To Reduce $38 Oil Benchmark


The National Assembly is likely to reduce the crude oil benchmark price of $38 per barrel proposed by the executive for the 2016 budget, the Chairman, Senate Committee on Media and Public Affairs, Senator Saabi Abdullahi, has said.

The price of oil in the international market as of Thursday was slightly below $33 per barrel, leaving a deficit of $5 per barrel from the $38 in the budget estimates.

Abdullahi told journalists in his office that both chambers of the National Assembly were being realistic in coming up with the decision to cut the benchmark price going by the alarming rate at which oil price was falling daily in the international market.

He said, “We are going to be as realistic as possible by reviewing it in line with realities on the ground as regards the proposed parameters like the oil price benchmark, with a barrel of crude oil in the international market today far lower than the projected benchmark figure of $38 per barrel.

“So, what I want to assure you is that when we resume from recess, the budget will be a top priority and we are going to give it expeditious attention.

“The issues of oil benchmark and exchange rate are issues that are dynamic and I’m sure that by the time we come to deal with that, we will look at what the realities are, and in tandem with the executive, I am sure we will come up with what we believe is realistic.”

He added that in considering the budget, the National Assembly would pay attention to the critical issue of revenue diversification.

Abdullahi stated, “If you look at the budget, you will see that we are giving more emphasis to non-oil revenue and by the time we block the leakages and ensure value for money, we should be able to do those things that will add value to the economy.

“Remember, the IMF boss was advising the financial sector to look at borrowing to the real sectors, agriculture, SMEs and all the likes, these are the areas of growth and I want to assure Nigerians that if we get it right in these particular sectors, our economy will be able to stay afloat.”

He commended the Central Bank of Nigeria for what he described as an effective management of the foreign exchange system.

The senator said, “If you look at the forex market, today it will gain, tomorrow it will drop; so, these are dynamics that we are not sure how it will play out, but with the management of the forex, I want to believe that the CBN is doing a very great job.

“We should encourage them and give them the necessary support so that at the end of day, we will continue to do those things that are in the interest of Nigerians.”

However, the Senate President, Bukola Saraki, urged the CBN to relax its strict foreign exchange policy as it was doing more harm than good to the economy.

Saraki, in a statement on Thursday by his Special Adviser, Media and Publicity, Yusuph Olaniyonu, said small businesses, in particular, were being made to suffer unnecessarily as a result of the CBN’s strict forex policy.

He called on the central bank to introduce a more flexible foreign exchange regime and reduce the present restrictions on the autonomous market, which were not allowing business owners to bring in foreign exchange or utilise what they had in their accounts.

The Senate president noted that he had canvassed a similar view at a private meeting with CBN Governor, Mr. Godwin Emefiele.

He was said to have implored the CBN chief to consider the effects of the present forex regime on small businesses, many of which he noted were dying.

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