President Muhammadu Buhari has written a letter to the House of Representatives seeking the approval of N4 trillion as payments for petrol subsidy payments in 2022.
The Speaker of the House of Representatives, Femi Gbajabiamila, read the letter titled “Submission of the Revised 2022 Fiscal Framework”, during a plenary on Thursday.
In the letter dated April 5, 2022, 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.”
