2015 Budget: N145.2bn earmarked for oil subsidy, says Okonjo-Iweala

Finance Minister and Co-ordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, has revealed that N145.2 billion had been set aside for payment of subsidy on petroleum products in the 2015 Budget.
Dr. Okonjo-Iweala said this on Tuesday in Abuja while addressing newsmen on the changes made in the budget recently passed by the National Assembly.
She said that N100 billion was set aside for subsidy on Premium Motor Spirit (PMS) and N45.2 billion for kerosene.
“I want to clarify some of the information in the media that the National Assembly passed the budget without the subsidy. This is not true. I also want to share with you that we have sent in a budget with a benchmark price of $52 per barrel, the National Assembly passed a benchmark oil price of $53 per barrel. That is one dollar higher than the budget proposal.
“This generated an extra revenue of N54 billion for the Federal Government; they retained the production volume of 2.2782 million barrels per day and exchange rate of N190 to a dollar,’’ she said.
This, she said, was because the interbank rate was at N197, adding that the Central Bank of Nigeria (CBN) had advised that the exchange rate should be used.
She said the gross federally collectible revenue for the federation increased by N169.845 billion, from N9.61trillion to N9.78 trillion.
She said this was due to increase in the benchmark price by a dollar.
“The Federal Government budget revenue went to N3.452 trillion from a position of N3.358 trillion; so, when we sent in the budget, Federal Government revenue was N3.358 trillion; they have returned it to N3.452 trillion.
“On the expenditure side, the aggregate expenditure passed was higher than what we went in with; the Federal Government went in with a proposal aggregate expenditure of N4.425 trillion and the national assembly passed N4.49 trillion.”
According to her, it is N67.43 billion higher than the proposed expenditure.
The minister said that the debt service was unchanged at N943.62 billion, adding that the statutory transfers were increased.
She said that NDDC transfer was increased from N45.75 billion to N46.72 billion; UBE was increased from N67.3 billion to N68.3 billion; National Assembly increased from N115 billion to N120 billion; Human Rights Commission, N1.2 billion to 1.516 billion.
She said that pension was slightly reduced from N231.4 billion to N231.06 billion, adding that other categories were removed and some moved to other sections of the budget.
On the expenditure, she said that aggregate capital expenditure, including transfers and SURE-P, was increased to N722.2 billion from N663.67 billion.
“So capital expenditure was slightly increased, there was a provision of N20.78 billion for SURE-P that we have gone in within this budget and it was retained. The fiscal deficit was decreased from N1.067 trillion to N1.041 trillion but the deficit from the GDP decreased from 1.119 per cent to 1.09 per cent,’’ the minister said.
She said it was tough but a responsible budget, adding that the proposal was not much different from what was sent to the National Assembly.
On cash flow management, she said that 50 per cent cut in revenue generation had affected the cash flow in the country, adding that government had been able to manage the situation month by month.
“It has been very tight but we have been very upward about it, in spite of the cash flow crunch,’’ she said.
She further noted that capital budget had not been released, adding that N473 billion was borrowed out of N882 billion as borrowing in the budget, to meet up with recurrent expenditure, including salaries and overheads
“Traditionally the first part of the year witnesses low revenue because tax receipts comes in from the middle of the year. This has compounded the challenges caused by the steep drop in revenues due to the oil price fall.’’