Posted by From Kola Ologbondiyan in Abuja on
Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday identified a shortfall of three hundred thousand barrels per day in the country's projected supply to the world market as well as the subsidy of pump price of petroleum products to the tune of N112bn in the fiscal year as two major reasons why the Federal Government could not mplement the 2005 Budget.
...excess crude revenue now $9bn
Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday identified a shortfall of three hundred thousand barrels per day in the country's projected supply to the world market as well as the subsidy of pump price of petroleum products to the tune of N112bn in the fiscal year as two major reasons why the Federal Government could not mplement the 2005 Budget.
Okonjo-Iweala, told newsmen after the closure of the inauguration of the Senate Committee on Finance, that excess crude revenue has hit $9bn.
The Senate had last week mandated its committees on Appropriation; Finance; National Planning; and, Petroleum Resources (Upstream) to investigate the revenue profile of the 2005 Budget vis-à-vis implementation.
But Okonjo-Iweala expla-ined that, "our initial projection was for the production of 2.7 million barrel of crude a day. According to what the Nigeria National Petroleum Corporation (NNPC) told us, due to the closure of some oil wells which is also due to community unrest, it has come down to 2.4 million barrels a day. I want people to know that.
"And that is why the excess crude amount is not as much as one would expect. I don't think this is popularly known. As at now, the total including what was put aside last year, everything, we have about $9bn at the moment. What I wanted to say was that the production has come down from the projected 2.7m barrels a day to 2.4m.
"The other thing that is important is that there is a substantial subsidy of the population that is on-going by the NNPC. As of now, about N112bn has gone into this subsidy that has not been remitted into the federation account because they are using it to subsidise petroleum for everybody.
"So because of those two, the revenue that we are getting into federation account and therefore into our coffers are not as much as they should be.
Therefore, we have to tailor our expenditure accordingly. The N112bn not remitted is being used by NNPC to subsidise petroleum at the pump.
"These are the two things about the 2005 revenue. We are only able to keep going because of the high oil prices," Okonjo-Iweala said.
On the excess crude earnings, she said "we should not get carried away and we should remember that we had this kind of boom in the 70's and we started doing projects left, right and centre and the oil price crashed. Let's be moderate.
"In terms of sharing, I have not heard and nobody has put any pressure on us. The Federal Government is trying to use it in the way we have said.
Obviously, some of it will be used to settle debts some for fuel supply which the President has said will go to power stations jointly done by the states and federal governments. As you know, there are seven supply stations that will use gas in the Delta and some of the money is going towards that.
"The President has met with the governors and all those things have been discussed in terms of how much has come into the coffers from excess crude, NNPC told us that closure of some wells has affected products and also revenue," she stated.
Meanwhile, the Federal Government on Monday, had put its projected revenue for the 2006 budget at N1.462 trillion. Government's projection is based on a $33 per barrel oil price benchmark.