Senate hints at $38 Crude Oil benchmark cut

As at Thursday, January 7, 2015, the price of Crude Oil per barrel has dropped a bit below $33 which leaves a deficit of $5 per barrel from the $38 in the budget estimates.

The Chairman, Senate Committee on Media and Public Affairs, Senator Saabi Abdullahi, addressing journalists at his office has 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.

He is further quoted as saying, “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.”

The current regime of the National Assembly has in the past expressed its concerns concerning the effort to resuscitate the economy among other key national issues. It can be said that it has taken up the check and balance responsibility very seriously by making sure it is fully involved in decisions made by the executive.

Concerning the effort to diversify the economy, the chairman also commented, “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.”

The Central Bank of Nigeria (CBN) under present Governor, Godwin Emefiele has embarked on a mission to maintain a healthy foreign exchange system. This is seen as a way of consolidating the government’s effort to make the economy conducive for trade.

Abdullahi commended CBN in a statement saying, “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”.

Senator Bukola Saraki, the senate president may have a different view concerning this. He feels the apex bank should simmer down on the foreign exchange policy as small scale businesses are likely to bear the brunt.

He advised 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.