President Muhammadu Buhari on Tuesday asked the Senate for approval to make adjustments to the 2022 fiscal framework.
The president asked for an increase in the amount of fuel subsidy to N4 trillion naira, from N442.72 billion, and the oil benchmark by US$11 per barrel, from US$62 per barrel to US$73 per barrel.
Buhari’s request was made through a letter he wrote to the Senate President, Ahmad Lawan. He explained that an adjustment to the 2022 fiscal framework had become imperative in view of new developments in both the global and domestic economies.
He said the developments were occasioned by spikes in the market price of crude oil, which were a fallout of the Russian-Ukraine war.
“As you are aware, there have been new developments both in the global economy as well as in the domestic economy which have necessitated the revision of the 2022 Fiscal Framework on which the 2022 Budget was based.
“These developments include spikes in the market price of crude oil, aggravated by the Russian-Ukraine war, significantly lower oil production volume due principally to production shut-ins as a result of massive theft of crude oil between the production platforms and the terminals.
“The decision to suspend the removal of Petroleum Motor Spirit subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues”, he said.
President Buhari also asked for a reduction in the projected oil production volume by 283,000 barrels per day, from 1.883 million barrels per day to 1.600 million barrels per day.
Buhari underscored the need to cut the provision for Federally-funded upstream projects being implemented by N200 billion, from N352.80 billion to N152.80 billion.
He asked for an increase in the projection for Federal Government Independent Revenue by N400 billion; and an additional provision of N182.45 billion to cater to the needs of the Nigerian Police Force.
He added that “based on the above adjustments, the Federation Account (Main Pool) revenue for the three tiers of government is projected to decline by N2.418 trillion, while FGN’s share from the Account (net of transfer to the Federal Capital Territory and other statutory deductions) is projected to reduce by N1.173 trillion.”
