Senate Slashes Oil Benchmark To $60, Backs N54.46trn 2026 Spending Plan

The Senate on Tuesday adopted far-reaching recommendations of its Committee on Finance, approving a downward review of Nigeria’s crude oil benchmark to $60 per barrel for 2026 and endorsing a N54.46 trillion federal spending framework aimed at insulating the economy from global volatility.

The report, presented at plenary by the Chairman of the Senate Committee on Finance, Senator Sani Musa, was considered and approved during a session presided over by Senate President Godswill Akpabio.

In a key decision reflecting concerns over global uncertainty, the Senate reduced the projected crude oil benchmark prices earlier proposed at $64.85, $64.30 and $65.50 per barrel for 2026, 2027 and 2028 respectively, to $60 for 2026, $65 for 2027 and $70 for 2028.

The committee said the adjustment was necessitated by heightened geopolitical tensions in Europe and the Middle East, as well as the sensitivity of international oil prices to such developments.

Despite the conservative oil price outlook, lawmakers sustained domestic crude oil production projections of 1.84 million barrels per day (mbpd) for 2026, 1.88 mbpd for 2027 and 1.92 mbpd for 2028, expressing confidence in ongoing reforms and efforts to stabilise output.

On macroeconomic assumptions, the Senate endorsed projected exchange rates of ₦1,512 to the dollar in 2026, ₦1,432.15 in 2027 and ₦1,383.18 in 2028, aligning with the Central Bank of Nigeria’s policy direction to stabilise the naira through effective fiscal and monetary policy coordination.

Inflation is projected to moderate steadily over the medium term, with rates of 16.5 per cent in 2026, 13 per cent in 2027 and 9 per cent in 2028. The committee anchored these projections on the commitment of monetary authorities to tame inflationary pressures.

Similarly, the Senate sustained real GDP growth projections of 4.68 per cent for 2026, 5.96 per cent for 2027 and 7.9 per cent for 2028, citing ongoing economic reforms and anticipated gains from tax reforms expected to take firmer effect from 2026.

A major plank of the report was the emphasis on effective implementation of newly enacted Tax Acts as veritable instruments for economic reform, growth and development.

In this vein, the committee recommended that the Federal Government implement a National Scanning Policy within the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies.

The policy, it said, would enhance revenue assurance, improve trade facilitation, reduce leakages, strengthen transparency and bolster national security.

On fiscal operations, the Senate approved the 2026 Federal Government budget framework with proposed total expenditure of ₦54.46 trillion. Of this amount, FGN retained revenue is estimated at ₦34.33 trillion, while new borrowings—both domestic and foreign—are put at ₦17.88 trillion. Debt service obligations are projected at ₦15.52 trillion.

The framework also provides ₦1.376 trillion for pensions, gratuities and retirees’ benefits, while the fiscal deficit is pegged at ₦20.13 trillion.

Capital expenditure, exclusive of transfers, was sustained at ₦20.131 trillion, alongside statutory transfers of ₦3.152 trillion and a Sinking Fund provision of ₦388.54 billion.

Total recurrent (non-debt) expenditure was approved at ₦15.265 trillion, with special intervention funds for recurrent and capital spending set at ₦200 billion and ₦14 billion respectively.

In its concluding remarks, the committee expressed profound appreciation to the Senate and members of the Committee on Finance for their commitment in discharging what it described as a critical national assignment.

It expressed optimism that approval and diligent implementation of the recommendations would serve as a catalyst for sustainable economic prosperity in Nigeria.