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Senate approves N3.6trn petrol subsidy, N8.4trn borrowing plan

By Muideen Olaniyi & Abdullateef Salau  The Senate on Wednesday rejected the recommendation of its committee to slash the oil subsidy fund in 2023 from…

By Muideen Olaniyi & Abdullateef Salau 

The Senate on Wednesday rejected the recommendation of its committee to slash the oil subsidy fund in 2023 from N3.6 trillion to N1.7trn and upheld a N8.4trn borrowing plan just as President Muhammadu Buhari will present N19.76trn 2023 Appropriations bill to the joint session of the National Assembly on Friday. 

President Muhammadu Buhari had proposed N3.6trn as subsidy for Petroleum Motor Spirit (PMS) for January to June next year in the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). 

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But the Senate Joint Committees on Finance and National Planning and Economic Affairs, which worked on the fiscal document, recommended that the cost of petroleum subsidy be capped at N1.7trn in 2023.

The Senate in its recommendations approved an increase in the oil benchmark to $73 per barrel and a daily oil production of 1.83 million barrels per day.

It also okayed Exchange Rate of N437.57/US$1 and the projected Gross Domestic Product (GDP) growth rate of 3.75%; as well as 17.16% inflation rate.

The Red Chamber gave its nod to fiscal deficit of N11.3trn, projected revenue of N9.352trn and new borrowings of N8.437 trillion (including foreign and domestic borrowing), subject to the provision of details of the borrowing plan to the National Assembly.

Other parameters approved by the Senate are Statutory transfers totaling N722.11 billion; Debt Service estimate of N6.31trn; Sinking Fund to the tune of N247.7bn; Pension, Gratuities and Retirees Benefits of N827.8bn.

The Senate President Ahmad Lawan in his remarks, said based on observations and findings made by the committee, Nigeria is in a war situation as far as crude oil theft is concerned and under revenue remittance by many of the MDAs.

Meanwhile the Federal Executive Council (FEC) has approved a budget proposal for the 2023 fiscal year due to be presented to the National Assembly on Friday.

The Special Adviser to the President on Media and Publicity, Femi Adesina, announced this Wednesday after the federal cabinet meeting presided over by President Muhammadu Buhari at the Council Chambers of the State House, Abuja.

He said the draft document prepared by the Ministry of Finance, Budget and National Planning was presented to the president at the meeting and “extensively discussed” by the cabinet.

The presidential spokesman, however, declined to give details of the budget proposals discussed at the “one-item meeting”.