2017 Budget: Expert Lauds Senate’s $44.5 Benchmark For Crude

A financial expert, yesterday, described the oil price benchmark adjustment by the Senate in the 2017 budget from $42.5 per barrel to $44.5 per barrel as realistic.
Head of Banking and Finance Department, Nasarawa State University, Keffi, Dr Uche Uwaleke, stated this in an interview with newsmen in Lagos.
Uwaleke said that the adjustment in the oil price benchmark made by the Senate in respect of the 2017 budget as contained in the 2017-2019 Medium Term Expenditure framework was realistic in view of expected rise in oil price.
“I think the adjustment in the oil price benchmark from $42.5 per barrel to $44.5 made by the Senate in respect of the 2017 budget as contained in the 2017-2019 Medium Term Expenditure framework is realistic.
“This is in view of the fact that oil price forecast by reputable international energy agencies such as the United States Energy Information Administration is above $50 per barrel on the average for 2017 on the back of the Organisation of Petroleum Exporting Countries (OPEC) agreement to effect output cuts this year,” Uwaleke said.
He added that the oil benchmark market adjustment if properly harnessed, would reduce the budget deficit of over N2trillion.
“At an exchange rate of N305 to the Dollar used for the 2017 budget proposal, the oil price benchmark adjustment has the effect of reducing the budget deficit of over N2trillion.
“It can also extend the size of borrowing requirement to finance the deficit,” he stated.
Uwaleke also called on the National Assembly to immediately commence consideration of the 2017 budget proposal, with a view to ensuring its early passage.
“Now that the MTEF has been approved, I expect the National Assembly to commence immediately the 2017 budget proposal consideration with a view to its early passage,” he said.
It would be recalled that the Senate had on January 18, approved the 2017-2019 MTEF and Fiscal Strategy Paper (FSP), 2017 wherein it pegged the projected price of crude at $44.5 per barrel.
This was against the $42.5 proposed by President Muhammadu Buhari in the budget.
The Senate also approved (MTEF) and Fiscal Strategy Paper (FSP) and set oil benchmark for 2017 budget at $44.5 per barrel.