ABUJA— Indication emerged last
night that the House of
Representatives would not change its
position on the $79 per barrel as the
oil benchmark for the 2014 budget.
Findings by Vanguard revealed that
the Presidency was upset with the
resolve by a majority of the
lawmakers to ensure that the $75 oil
benchmark being proposed by the
Federal Government did not see the
light of the day.
It was learnt that in a bid to
checkmate the stiff opposition to the
$75 per barrel being tabled by the
government, some lawmakers loyal
to the Presidency had been trying to
lobby their colleagues to support their
position.
The lobby, however, appears to have
failed to sway the majority, Vanguard
was told last night.
A member of the National Assembly
leadership confirmed, yesterday, that
the lawmakers were not ready to go
below the $79 per barrel benchmark.
The lawmaker said that it would be
wrong for the people that were elected
by Nigerians to accept something
that was inimical to their progress
and well being because it was being
proposed by the President.
The source said: “The plot to recruit
sympathisers of the Presidency to
talk to us concerning the oil
benchmark has failed woefully
because the protagonists of $75 per
barrel cannot justify what they will do
with the excess funds arising from
rising oil price which at all times is
above $100 per barrel.
On $100,000 bribe
“It was when they failed to impress
their logic of stagnation on us that
they went to town with the allegation
that the Presidency bribed us with $
100,000 each.
“But they have forgotten that we are
not children who can easily be
hoodwinked.
“Now, if the Presidency claims it gave
us the money they are talking about,
how come that we insist that the oil
benchmark must remain at $79 per
barrel?
“Let me assure all Nigerians that even
if the Presidency gives us the money
today, we won’t soft-pedal on the $
79 benchmark,” the official added.
When contacted, the spokesman for
the House, Mr. Zakari Mohammed,
said those peddling the rumour of $
100,000 bribe were agents of
blackmail, out to cause disaffection
among the members and derail them
from serving Nigerians.
Mohammed pointed out that no
amount of blackmail and intimidation
would sway the lawmakers from
doing what is right and in the interest
of the people that elected them.
http://www.vanguardngr.com/2013/12/reps-jonathan-accept-79-benchmark-forget-2014-budget-2/

These Reps are senseless. $79 benchmark, when there are predictions out there which include oil prices of $50 per barrel lets hope they have plans of causing yawa in the middle east to cause the price to remain high. mumus

wao fir on the mountain

wao fire on the mountain

I support the Reps on this matter, last year GEJ and his clueless team proposed $75 benchmark, then wanted to borrow to finance our budget, if not for the HOR that increased it to $79 benchmark and reduced the deficit in the budget Nigeria would have been in more debt. The annoying thing is that the excess crude will still be pilfered away and when Ameachi & his likes raise alarm, team NOI will start black mailing him.
This is December 8th and no budget is yet to be presented, instead the cow has jetted of to SA 6days before the burial is he the Chief Mourner?
Cluelessness!!!

.

To understand what they will do with all the excess, check how the looted and shared the last savings. Is today a rainy day?

ndu_chucks: These Reps are senseless. $79 benchmark, when there are predictions out there which include oil prices of $50 per barrel lets hope they have plans of causing yawa in the middle east to cause the price to remain high. mumus

How are they senseless?

At $79 this year, we sold at $110 avearge throughout this year and the differential sum cannot be accounted for. We even have to touched our ECA to meet our obligation.

ndu_chucks: These Reps are senseless. $79 benchmark, when there are predictions out there which include oil prices of $50 per barrel lets hope they have plans of causing yawa in the middle east to cause the price to remain high. mumus

There is a legislative mechanism and process called Amendment bill, and even without an amendment bill, there are inherent clauses in the money bills such as virement and impoundment that can be triggered in an event of a free fall drop in the price of crude oil to anything below the benchmark.

The Executive and Senate both agreed to a benchmark of $76.5, so if we should go by your argument, they are also 'Senseless'.

hardywaltz: I support the Reps on this matter, last year GEJ and his clueless team proposed $75 benchmark, then wanted to borrow to finance our budget, if not for the HOR that increased it to $79 benchmark and reduced the deficit in the budget Nigeria would have been in more debt. The annoying thing is that the excess crude will still be pilfered away and when Ameachi & his likes raise alarm, team NOI will start black mailing him.
This is December 8th and no budget is yet to be presented, instead the cow has jetted of to SA 6days before the burial is he the Chief Mourner?
Cluelessness!!!

Thanks for you comment. GEJ is Kindergarten President . Dec 9 no Budget yet.

kel4soft:

How are they senseless?

At $79 this year, we sold at $110 avearge throughout this year and the differential sum cannot be accounted for. We even have to touched our ECA to meet our obligation.

I tot the excess is paid into the ECA u mentioned about and borrowing from there to meet our obligation isn't a crime cause that is part of what the account was created for ab initio! So what exactly is ur point! I'm confused.

Sometimes I wonder if our so called reps and senators really understand what their duties are! If the government proposes $75/barrel so be it- all they need to do is to pass a law that states that the federal government can not take money from the ECA without been appropriated for by the national assembly just the way they also appropriate for all monies going out from the federation account or better still they shld scrap the ECA account and. Compel all excess crude oil revenue be paid directly into the federation account so that every dine can be appropriated for!

This to my opinion is called common sense! If the federal government like let them make an estimation of $100pb, that's their cup of tea- snc all excess funds generated will be paid directly into the federation account or they pass a bill making all spending from the ECA to be appropriated for by the national assembly and with such bills passed into law, the fg wouldn't v access to funds not appropriated for to play around with.

Let them just do the needful and spare me all this trash they raise up all the time when they have the powers to do the right thing without making all these noise!

byrron:


I tot the excess is paid into the ECA u mentioned about and borrowing from there to meet our obligation isn't a crime cause that is part of what the account was created for ab initio! So what exactly is ur point! I'm confused.

No! The excess touched was not this year's EC Money. It was Pre-GEJ. From $9bn to $4bn.

take dat: There is a legislative mechanism and process called Amendment bill, and even without an amendment bill, there are inherent clauses in the money bills such as virement and impoundment that can be triggered in an event of a free fall drop in the price of crude oil to anything below the benchmark.

The Executive and Senate both agreed to a benchmark of $76.5, so if we should go by your argument, they are also 'Senseless'.

What in God's Holy name are you talking about

kel4soft:

No! The excess touched was not this year's EC Money. It was Pre-GEJ. From $9bn to $4bn.

Always learn to keep yr mouth SHUT when you do not know what you are talking about, K??

byrron: Sometimes I wonder if our so called reps and senators really understand what their duties are! If the government proposes $75/barrel so be it- all they need to do is to pass a law that states that the federal government can not take money from the ECA without been appropriated for by the national assembly just the way they also appropriate for all monies going out from the federation account or better still they shld scrap the ECA account and. Compel all excess crude oil revenue be paid directly into the federation account so that every dine can be appropriated for!

This to my opinion is called common sense! If the federal government like let them make an estimation of $100pb, that's their cup of tea- snc all excess funds generated will be paid directly into the federation account or they pass a bill making all spending from the ECA to be appropriated for by the national assembly and with such bills passed into law, the fg wouldn't v access to funds not appropriated for to play around with.

Let them just do the needful and spare me all this trash they raise up all the time when they have the powers to do the right thing without making all these noise!

The ECA is the Federation Account, guy; it is only a component of it..... Na wa for sm of una sha

taharqa: Always learn to keep yr mouth SHUT when you do not know what you are talking about, K??

Finance spokesman, please what's there you don't understand?

hardywaltz: I support the Reps on this matter, last year GEJ and his clueless team proposed $75 benchmark, then wanted to borrow to finance our budget, if not for the HOR that increased it to $79 benchmark and reduced the deficit in the budget Nigeria would have been in more debt. The annoying thing is that the excess crude will still be pilfered away and when Ameachi & his likes raise alarm, team NOI will start black mailing him.
This is December 8th and no budget is yet to be presented, instead the cow has jetted of to SA 6days before the burial is he the Chief Mourner?
Cluelessness!!!

Oh Lawd!!! This should be about d most Ridiculous comment I hv read here for sm time now. Amazing! Do you hv a clue how astonishingly CONTRADICTORY the @emboldened is?? Do you hv any idea at all?...*smh*

taharqa: What in God's Holy name are you talking about

No be Budget Office you dey work again ? @Ndu, predicted a scenario where the price of crude oil would be below the benchmark say,$50.


If the price oil crude oil falls below the benchmark used in passing an appropriation bill into law, an 'Amendment Bill' can be used to adjust to the reality of the time.

Virement is an administrative transfer of funds from one part of the budget to another. If the price of crude oil falls to below the benchmark, we will not have the funds to run the whole budget so virement allows the executive to prioritize and move funds from one part of the budget to another. In the event of an unprecedented fall in oil price, a certain percentage can be moved from the capital vote to the recurrent when unable to pay personnel costs(salaries, and related employment benefits) because of fall in the projected revenue.

Impoundment of appropriation funds, the decision of the President not to spend money appropriated by the NA.

I think the members of HOR are selfish and greedy all they care about is money,money and money for the 2015 general election.why put the benchmark @ $79 pb .wen d exco is trying to cut dwn on public expenditure and wen the price of oil cld fall @ any time.this is dec and a whole nation budget is nt in the Nat Ass.the most pathetic case is that most of d legislator and d exco will still be thr post 2015 irrespective of whatever anybdy do now.d voters in 9ja are helpless.God will surely deliver us one day.

^those in the NA will also argue that the executive wants a lower benchmark so as to have more money in the ECA which would be depleted to fund their political ambitions in 2015.

In 2012 even with a $79 benchmark, we still sold 'Sovereign bonds' worth of N544billion to fund the 2013 budget deficit. If we have to reduce the oil benchmark for 2014 budget to $76.5, we will need to float more sovereign debt instruments which may lead to the escalation of the rising debt profile of the country.

We are already faced with the menace of oil theft, which means lower production of crude oil and less oil to sell. When we sell less oil, we won't be able to meet our revenue projection and will have to resort to more borrowings to finance the budget. It makes more economic sense to have a higher benchmark as we are yet to effectively deal with the menace of oil theft than putting more money in the 'contentious and often-mismanaged ECA.


With a benchmark of $79 for 2012, we all witnessed how states complained of difficulty in paying their bills on a regular basis and impoundment of their monies by the FG simply because of revenue shortfalls in the Federation Account. Won't the states face more difficulties if we reduce the benchmark to $76.5?

The HOR also have their points.

take dat: No be Budget Office you dey work again ? @Ndu, predicted a scenario where the price of crude oil would be below the benchmark say,$50.


If the price oil crude oil falls below the benchmark used in passing an appropriation bill into law, an 'Amendment Bill' can be used to adjust to the reality of the time.

Virement is an administrative transfer of funds from one part of the budget to another. If the price of crude oil falls to below the benchmark, we will not have the funds to run the whole budget so virement allows the executive to prioritize and move funds from one part of the budget to another. In the event of an unprecedented fall in oil price, a certain percentage can be moved from the capital vote to the recurrent when unable to pay personnel costs(salaries, and related employment benefits) because of fall in the projected revenue.

Impoundment of appropriation funds, the decision of the President not to spend money appropriated by the NA.

Both Virements and Impoundments are not appropiate instruments in this instance cos they are merely used to MANAGE the budget process (ie move monies around various budget Heads Or Withhold d Expenditure of certain budgetary Heads/Items); they do not have any effects on d amount of monies available as Expendible Funds for the budget, and this is the Crux of d issue here. Ie how much wud be available as Projected Revenue in order to run d Budget, and the Consequences of such shortfall in d Projected Revenue relative to what would actuali accrue to d Federation Account for SHARING bw d National and subNational Govts. And moreova, what has Virement and Presidential Impoundment in d Federal level got to do with d budgets of d subNational Govts and how much is/isn't available for SHARING during FAAC? Do you honestly believe d States and LGAs wud accept any of those measures (that does affect their budgets anyways) OR just demand the monies be shared out of d ECA to augment d shortfalls like they have been doing this year?? So I still don't get why you saw d need to insert those two in d discourse. Maybe there is smtin am still not getting.....As for Amendments, yes that is ordinarily an appropiate instrument in handling shortfalls in budgets. But Amendment by nature is Political and requires lots of Compromise. And d budget year in question (2014) wud be a year of unbelievably heightened Politics- Poltics of Confrontation unfortunately, and not of Compromise. So how do you expect d National Assembly, esp this particular Assembly of Clowns who hv refused to stand above sillly pettiness and sat on extremely critical bills like d PIB for no explicable reasons, to possibly be sane/coolheaded enough to agree to Amendments if smtin as drastic as a significant fall in d Oil price happens in d International market next year??

take dat: ^those in the NA will also argue that the executive wants a lower benchmark so as to have more money in the ECA which would be depleted to fund their political ambitions in 2015.

In 2012 even with a $79 benchmark, we still sold 'Sovereign bonds' worth of N544billion to fund the 2013 budget deficit. If we have to reduce the oil benchmark for 2014 budget to $76.5, we will need to float more sovereign debt instruments which may lead to the escalation of the rising debt profile of the country.

We are already faced with the menace of oil theft, which means lower production of crude oil and less oil to sell. When we sell less oil, we won't be able to meet our revenue projection and will have to resort to more borrowings to finance the budget. It makes more economic sense to have a higher benchmark as we are yet to effectively deal with the menace of oil theft.


With a benchmark of $79 for 2012, we all witnessed how states complained of difficulty in paying their bills on a regular basis and impoundment of their monies by the FG simply because of revenue shortfalls in the Federation Account. Won't the states face more difficulties if we reduce the benchmark to $76.5?

The HOR also have their points.

Oh lawd!! You are so CONTRADICTING yrself here, guy... You said Sovereign Bonds to fund Deficits, BUDGETARY Deficits ie d Deficit projected in d budget based on d approved Oil benchmark. That you increased d benchmark might not mean that d Deficit (hence d bonds you wud raise wud decrease) ESPECIALI if the Projected Revenue falls significantly (which is d Crux of d mata here). In fact, if that happens you may then have to raise more bonds to fund d budget cos d Deficit (Expenditure- Projected Revenue) wud increase..... I wud later on reali comment on d Economics, esp relative to likely happenings in d Global market next year (eg Changing Oil market architecture, effects of imminent US Treasury Easing, etc) of this issue later

^ Bro, its difficult at times to read and understand your posts!

I see you still don't get my point. We are talking of a possible drop in price of crude oil to $50 after passing a budget premised on $76 or $79 into law. Those instruments will come in handy when managing the budget. If such a scenario should occur, we will struggle to meet up with the FAAC, and possibly not have a dime in the ECA.

Since a drop in oil price below the benchmark will affect the states, they will also use legislative mechanisms of an Amendment bill to adjust their budget and/or virement as an instrument in managing their budgets.

I think you should blame the FG more, oil theft is the major reason why we've been experiencing huge shortfalls. Even if the PIB is passed into law today, as long as oil theft still persists and oil price drops, we don enter am be that.

taharqa: Oh lawd!! You are so CONTRADICTING yrself here, guy... You said Sovereign Bonds to fund Deficits, BUDGETARY Deficits ie d Deficit projected in d budget based on d approved Oil benchmark. That you increased d benchmark might not mean that d Deficit (hence d bonds you wud raise wud decrease) ESPECIALI if the Projected Revenue falls significantly (which is d Crux of d mata here). In fact, if that happens you may then have to raise more bonds to fund d budget cos d Deficit (Expenditure- Projected Revenue) wud increase..... I wud later on reali comment on d Economics, esp relative to likely happenings in d Global market next year (eg Changing Oil market architecture, effects of imminent US Treasury Easing, etc) of this issue later

Where is the contradiction in there? I only used the 2012 sovereign bond sold to fund the 2013 deficit as an example and that does not mean we won't be selling bonds to fund the 2014 budget deficit.

If you deliberately lower your benchmark and therefore your revenue, you set yourself up for a budget deficit and you will have to go to the market to borrow for the purpose of financing the budget. Floating more sovereign debt instruments 'may' escalate our rising debt profile. We will be passing the burden to the future generation.

ndu_chucks: These Reps are senseless. $79 benchmark, when there are predictions out there which include oil prices of $50 per barrel lets hope they have plans of causing yawa in the middle east to cause the price to remain high. mumus

Please don't be daft. We had a fund to cushion the effect of any possible fall in oil price below the benchmark. That's the ECA, and today it's a shell. Tackle those that have failed to put make hay while the sun shines.

taharqa: The ECA is the Federation Account, guy; it is only a component of it..... Na wa for sm of una sha

This is what happens when u think u knw so much! ECA is different from d federation account were budgets are drawn from ok! The federation account is were all appropriated funds from the national house of assemble is spent from by the FG! Sometimes silence is golden! It takes a great deal of humility to keep off from issues u dnt knw much about!

There is no rule that compels u to respond to all issues even the ones u dnt knw much about!