President Muhammadu Buhari has requested the approval of N4
trillion as payments for petrol subsidy payments in 2022.
The president said this in a letter addressed to the house
of representatives, titled “Submission of the Revised 2022 Fiscal Framework”.
Femi Gbajamila, speaker of the house of representatives,
read the letter during a plenary on Thursday.
In February, President Buhari had requested the provision of
N2.557 trillion for petrol subsidy payments in 2022 — even as petrol subsidy
payments gulped N1.43 trillion in 2021.
In the letter dated April 5, Buhari said the incremental
provision by N442.72 billion from N3.557 trillion to N4 trillion was necessary
in the face of current economic developments, including the increased market
price of crude oil aggravated by 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,”
he said.
“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.”
According to Buhari, the decision to suspend the removal of
petrol subsidy at a time when high crude oil prices have elevated the subsidy
cost has significantly eroded government revenues.
“Following these developments, it has become necessary to
adjust the fiscal framework and accordingly, amend the 2022 Appropriation Act
to ensure its successful Implementation,” Buhari said.
He said the adjustments to the 2022 fiscal framework include
an increase in the projected oil price benchmark, from $62 per barrel to $73
per barrel, up by US$11 per barrel.
“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,” the letter reads.
“An increase in the
Estimated provision for PMS subsidy for 2022 by from N442.72 billion from
N3.557 trillion to N4.00 trillion.
“A cut in the provision for federally-funded upstream
projects being implemented by N152.80 billion from N200 billion to N352.80
billion.
Based on the above adjustments, the president said the
federation account (Main Pool) revenue for the three tiers of government is
projected to decline by N2.418 trillion, while FG’s share from the account (net
of transfer to the federal capital territory (FCT) and other statutory
deductions) is projected to reduce by N1.173 trillion.
He, however, noted that the amount available to fund the
FG’s budget is projected to decline by N772.91 billion due to the increase in
the projection for independent revenue (operating surplus remittance) by N400
billion.
“Given the urgency of
the request for revision of the 2022 Fiscal Framework and 2022 Budget
amendments, I seek the cooperation of the National Assembly for expeditious
legislative action on this request,” Buhari said.
“Please accept. Right Hon. Speaker, the assurances of my
highest consideration.”
The federal government had proposed an 18-month extension
for the implementation of the petroleum industry law to cater for subsidy
shortfall.
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