The Federal Government yesterday set a benchmark of $50 per barrel of crude oil and four million barrels per day production for the 2010 budget.
It also proposed a budget deficit of N1.026 trillion, representing 3.28 per cent of the country’s Gross Domestic Product (GDP). The deficit represents a slight increase from N836.6 billion in the 2009 budget.
The current budget was benchmarked against $45 per barrel, but it has hovered around $60 lately after a long period of selling even below the benchmark.
Also, it was projected that crude oil production would be 2.29mbpd, but militant activities have hampered output, with the Minister of Petroleum Resou-rces, Dr. Rilwanu Lukman, disclosing on Tuesday that the country was losing nearly 1mbpd.
This budget 2010 proposal formed part of the highlights of yesterday’s Federal Executive Council (FEC) meeting presided over by Vice-President Goodluck Jonathan.
Minister of Information and Communications, Professor Dora Akunyili, while briefing State House correspondents at the end of the meeting, explained that President Umaru Musa Yar’Adua could not attend because he was observing some rest having arrived late night Tuesday from an official trip from Togo.
She said projected oil production would be hinged on the return of peace to the troubled Niger Delta region.
The present oil production capacity of the country, which is put at 1.4 - 1.5mbpd, is caused by activities of militants in the Niger Delta oil region.
Shedding more light on the 2010 budget proposal, Finance Minister Mansur Muhtar explained that the budget would soon be presented to the National Assembly.
According to him, the deficit would be funded from traditional sources, including proceeds of privatisation, signature bonuses as well as from the domestic and foreign markets.
The minister, who did not disclose the total budget for 2010, stated that the high projection in the production capacity for 2010 was based on the fact that necessary infrastructure would have been put in place to ensure efficient functioning of the industry.
The implementation of the amnesty programme offered to militants in the region by President Yar’Adua is also expected to contribute to peace with positive impact on production capacity level.
Muhtar further explained that FEC approved a medium-term revenue and expenditure framework that would guide in the implementation of the 2010 budget with a directive for issuance of budget call circular to all Ministries, Departments and Agencies (MDAs).
Meanwhile, the Federal Government has approved a total of N10.48 billion for the award of contracts for the construction of the permanent headquarters of the Petroleum Technology Development Fund (PTDF).
Lukman explained that the decision to construct a befitting headquarters for PTDF was to provide a conducive working environment for the outfit in view of its important role in the enforcement of local content for the oil and gas sector.
The minister also reacted to the allegation that the siting of the N14 billion Petroleum College at Kaduna was a misplaced priority, arguing that unlike the Petroleum Training Institute (PTI) Efuru, Delta State, which trains low level manpower in the oil and gas sector, the Kaduna College would train managerial level of manpower in the sector.
He also denied reports that the Federal Government promised to convert the PTI to a university, saying doing so would deny the sector the needed middle level manpower.
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