Reps approve 2026–2028 fiscal framework, retain oil benchmark at $64.85 per barrel
The House of Representatives on Thursday approved the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), sustaining the federal government’s crude oil benchmark at $64.85 per barrel for 2026, diverging from the Senate’s earlier reduction to $60 per barrel.
The approval came after debates over the potential impact of lowering the oil price benchmark on government revenue.
The House Committee on Finance and National Planning had initially recommended reducing the 2026 benchmark to $60 per barrel to shield the government from global oil price volatility amid geopolitical tensions in Europe and the Middle East.
However, several members opposed the recommendation, prompting a temporary suspension of consideration of the budget documents.
Speaker of the House, Tajudeen Abbas, warned that reducing the benchmark without fully modelling its effect on revenue, borrowing, and total expenditure could create shortfalls that would need to be offset through higher domestic revenue mobilisation or increased borrowing.
During Thursday’s plenary session, the House reverted to the Executive’s original figures, projecting oil prices at $64.85 for 2026, $64.30 for 2027, and $65.50 for 2028.
The Senate, in contrast, had adjusted the 2026 benchmark to $60 while keeping 2027 and 2028 projections at $65 and $70, respectively, arguing for conservative revenue projections to shield the economy from global price shocks.
Other macroeconomic parameters remained unchanged. The House maintained domestic crude oil production at 1.84 mbpd for 2026, 1.88 mbpd for 2027, and 1.92 mbpd for 2028. Exchange rate projections are N1,512, N1,432.15, and N1,383.18 for the respective years, while inflation is projected at 16.5 per cent, 13 per cent, and 9 per cent. GDP growth rates remain at 4.68 per cent, 5.96 per cent, and 7.9 per cent for 2026, 2027, and 2028.
The total proposed spending is N54.46 trillion, with N34.33 trillion from FGN retained revenue and new borrowings of N17.88 trillion.
Debt service is projected at N15.52 trillion, pensions and retirees’ benefits at N1.376 trillion, and the fiscal deficit at N20.13 trillion. Capital expenditure is projected at N20.131 trillion, while statutory transfers stand at N3.152 trillion.
Total recurrent non-debt expenditure is N15.265 trillion, with special interventions for recurrent and capital pegged at N200 billion and N14 billion, respectively.
The approval signals a key step toward finalizing the 2026 federal budget, though differences between the House and Senate on oil benchmarks may require reconciliation in joint budget committees before passage.