Budget 2013 under threat as Govt loses N160b monthly

The monthly loss of N160 billion ($1 billion) revenue, a reduction in oil production and a drop in the prices of crude at the international market are threatening the funding of the 2013 Appropriation Act.
Finance Minister Dr Ngozi Okonjo Iweala yesterday in Washington DC, United States, put the total loss at 300,000 barrels per day (bpd). She blamed the development on shut-in due to Force Majure declared by oil firms, oil theft and illegal bunkering. Dr Okonjo-Iweala was addressing an emergency press conference at the on-going World Bank/ International Monetary Fund (IMF)spring meeting.
The minister said the briefing was important because of the avowed transparency in the President Jonathan’s administration.
The Nigerian National Petroleum Corporation (NNPC) had said last Tuesday that oil production fell below projections in the first quarter due to crude theft and pipeline sabotage. The current production level according to minister, ranged from 2.1 million bpd to 2.2 million barrels per day, less than an estimated 2.5 million barrels per day for the 2013 budget. The N4.93 trillion ($31.35 billion) budget for 2013 was based on an assumption of a $79-per-barrel budget oil price, higher than the $75-per-barrel proposed by the Executive and up from $72 for last year’s budget.
With the persistent drop in price of oil in the international market ($97 dollar per barrel as at yesterday, coupled with the monthly N160 billion revenue loss, in addition to the shortfalls in other revenues from the Federal Inland Revenue Service (FIRS) and Nigerian Customs, the ability to finance the 2013 budget may tough if oil production is not restored in good time especially the Shell Nembe, which has shut-in 150,000 barrels of oil per day.But the Minister has assured that the $7 billion left in the Excess Crude Account (ECA) was enough to stabilize the shortfall within the next three months pending the time the recoveries would be made.She said this is why the Excess Crude Account (ECA) is very important to the country but pointed out that it was very significant for the country to move quickly to recover production.The Federal Government sets a price per barrel when calculating oil revenue in the budget, and saves any money collected above that level in the ECA to meet spending shortfalls.