Budget 2014: Reps approve $79 crude oil benchmark

The House of Representatives yesterday approved the benchmark price of crude oil at $79 per barrel.

At a closed-door session, 79 lawmakers supported adopting $79 per barrel as the oil benchmark while 62 others stuck with the executive’s proposal of $74 per barrel.

However, the Senate and House Joint Committees on Finance and Appropriation had pegged the oil benchmark at $76.5 per barrel.

As such, the decision by the House to backtrack on the agreement reached with the Senate irked some members who elected to stay away from yesterday’s session when the 2014 – 2016 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) was being  considered for adoption.

According to a report of the House Committees on Finance, Appropriation and two others which worked on the MTEF and FSP, N160 to $1 was adopted as the exchange rate for the next three years.

The report projected the successive volume of crude oil production between 2014 and 2016 at 2.3million barrels per day (mbpd) 2.5 mbpd, and 2.5 mbpd respectively while putting the corporate tax and Value Added Tax (VAT) at 30 percent and 5 percent respectively.

“The government should strengthen and consolidate its fiscal strategy to narrow the gap between projected and actual revenue for the period 2014 – 2016 by curtailing oil theft and diversifying the economy to increase tax bases so as to increase tax revenue,” the report said. - Thisday.