April 29, 2015 / 6:58 AM / 5 years ago

Nigeria cuts 2015 budget, fuel subsidy amid lower oil price

ABUJA (Reuters) - Nigeria’s senate passed the nation’s 2015 budget on Tuesday assuming a lower oil price benchmark of $53 per barrel, compared with last year’s $77.5, amidst weaker global crude prices.

Members of the Nigerian parliament attend the 2013 budget proposal presentation by President Goodluck Jonathan at a joint sitting of the parliament in the capital Abuja, October 10, 2012. REUTERS/Afolabi Sotunde

The budget also made no provision for payments for fuel subsidies, chairman joint-senate committee on appropriation and finance, Mohammed Maccido told lawmakers, after the government had in November proposed to cut it by half to 458.6 billion naira for 2015.

Oil-rich Nigeria’s main cities have been facing acute gasoline shortages as importers feel the pinch of a plummeting local currency, tighter credit lines, and unpaid government subsidies, oil traders and local industry sources said.

Africa’s biggest economy has repeatedly lowered the oil price assumption for its budget after crude oil prices fell in the past year, hurting government revenue and hammering its currency the naira, despite the central bank spending billions of U.S. dollars to prop up the currency.

The senate in the continent’s biggest oil producer passed a 4.49 trillion naira ($23 billion) budget, which is 3.2 percent lower than last year’s and is also based on an exchange rate assumption of 190 naira to the dollar.

The lawmakers blamed the delay in passing this year’s expenditure plan partly on the national elections in late March, won by opposition leader Muhammadu Buhari.

The defeated incumbent Goodluck Jonathan is expected to sign the budget before it can be implemented.

Lawmakers in Africa’s biggest economy had in February approved an oil price benchmark of $52 per barrel for the draft budget framework, down from an initial $78 proposed by the finance ministry in September after crude prices plunged.

Oil production for the 2015 budget was estimated at 2.278 million barrels per day.

The budget comprised of 2.6 trillion naira in recurrent expenditure and 556.9 billion naira for capital projects. It set aside 953.6 billion naira for debt service.

Government revenues fell 21.5 percent to 315.04 billion naira in March, due to pipeline shutdowns and lower earnings from the non-oil sector.

President-elect Buhari became the first Nigerian to oust a sitting president through the ballot box, three decades after seizing power in a military coup.

$1 = 198.9500 naira

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