The Senate and the House of Representatives have approved N4 trillion to fund the fuel subsidy for 2022.
This is despite remonstrations from notable economists and civil society groups, anchoring their point on the debilitating effects of voting humongous funds to subsidy, on the Nigerian economy.
The approved fund, however, indicates an increase of N3.557 trillion-from the N442.72 billion earlier budgeted.
The lawmakers also increased the oil benchmark from $62 per barrel to $73 per barrel, and approved that oil production volume increased by 283,000 barrels per day-from 1.883 million barrels per day to 1.600 million barrels per day.
The approvals followed President Muhammadu Buhari’s request to the lawmakers to make adjustments to the 2022 fiscal framework.
In a letter to the Senate on Tuesday, the President explained that an adjustment to the 2022 fiscal framework became imperative in view of new developments in both the global and domestic economies.
The developments, he said, were occasioned by spikes in the market price of crude oil, which were a fallout of the Russia-Ukraine war.
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“The decision to suspend the removal of Petroleum Motor Spirit (PMS) subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues”, he said.
Prior to the approval of the president’s request, the Senate considered a report by the Senate Committee on Finance.
The Chairman of the Committee, Solomon Olamilekan, noted that the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99 per cent of Gross Domestic Product (GDP).
He said, “Incremental deficit will be financed by new borrowings from the domestic market.”
He, as such, recommended that the president’s request be approved.