About N971 billion will be spent on petrol subsidy by the Federal Government in 2015, while N250 billion will be spent on keroses subsidy, according to the 2015-2017 Medium Term Expenditure Framework and Fiscal Strategy, MTEF paper, which President Goodluck Jonathan sent to the National Assembly for approval as the basis for the 2015 budget of N4.817.76 trillion.
According to the document, “The activities of crude oil thieves and oil pipeline vandals remain the main risks to oil production. The potential implications of their activities are a reduction in government revenue with further impacts on government debts and fiscal deficits as well as pressures on the exchange rate.
“Given the role of oil production volume on government finances, government remains committed to curbing these nefarious activities. Consequently, it is intensifying security, particularly ground and aerial surveillance, around oil facilities through the combined efforts of security agencies and local communities’ participation.
“These security forces under the National Executive Council Committee are being better equipped to checkmate the activities of oil thieves and pipeline vandals. There would also be better engagements of the Ministry of Justice and lawyers for faster prosecution of oil thieves.”
The MTEF document also indicated that the Federal Government had projected that it would spend N1.029 trillion as capital expenditure for ministries, departments and agencies. N1.801 trillion would be spent as personnel costs for the MDAs while service wide votes would gulp N376.05 billion and N570 billion projected as new borrowings in 2015, the document stated.
President Jonathan however admitted that the oil sector was not witnessing new investments due to uncertainty occasioned on the non-passage of the Petroleum Industry Bill (PIB).
He explained that the oil benchmark of $78 per barrel was predicated on the projected balance between increasing global supply resulting from rising oil and unconventional oil production and production disruptions that may result from geopolitical risks.
“Our proposal is also driven by the need to be cautious in our revenue projections given the volatile nature of oil prices and the need to rebuild our fiscal buffers, which have been very useful in periods of revenue shocks,” the president said.
Senate President, David Mark had since directed the Joint Committee on Finance and Appropriation to work on the Paper within two weeks, saying the early conclusion of work on the document would enable the senate to determine early passage of the proposed 2015 budget.