The Lagos Chamber of Commerce and Industry (LCCI) has urged the National Assembly to concentrate more on tackling the challenges of oil theft and pipelines vandalism in the country.
Mr Muda Yusuf, LCCI Director-General, made the plea in an interview with newsmen in Lagos.
He said that the upward review of oil price benchmark from US$75 to US$ 82 would not yield any fruitful result unless the issue of corruption in the sector was addressed.
The Lagos Chamber of Commerce and Industry (LCCI) has urged the National Assembly to concentrate more on tackling the challenges of oil theft and pipelines vandalism in the country.
Mr Muda Yusuf, LCCI Director-General, made the plea in an interview with newsmen in Lagos.
He said that the upward review of oil price benchmark from US$75 to US$ 82 would not yield any fruitful result unless the issue of corruption in the sector was addressed.
The Governor of Central Bank of Nigeria (CBN); Malam Sanusi Lamido Sanusi, had recently faulted the House of Representatives’ proposal to raise the crude oil benchmark.
In the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper, the Federal Government has proposed to retain the 2012 benchmark of 75 dollars per barrel in the 2013 budget.
But a Joint Committee of the House of Representatives, on Oct. 2, recommended an upward review of the oil benchmark by seven dollars.
The committee’s proposal was hinged on the fact that increasing the benchmark would attract more revenue to the federation and assist government in reducing its deficit and borrowing.
Yusuf also said that setting oil price benchmark was a critical budget assumption because of high dependence on revenue for funding of the budget.
He said that it was generally good judgment to be conservative in revenue projection in the fiscal operations of government.
Yusuf said that it was a mark of fiscal prudence which would protect the economy from revenue shocks and serve to moderate expectations.
“Even, when oil prices look good, there may be issues with production, oil theft and vandalism. The current uncertainties in the global economy calls for cautious optimism in oil price projections,“ he said.
Yusuf said that the current policy of government was that all revenues in the excess crude oil benchmark price should be kept in the Excess Crude Account (ECA) as a buffer.
He said that the idea was to protect the fiscal operations of the government from a crisis which could arise from a drop or collapse in oil prices.
“This is not a bad idea in my view, especially in the light of the growing uncertainties in the global economy,” he said.
Discussion about this post