Lagos (Platts)--8Oct2009/645 am EDT/1045 GMT

Nigeria has proposed a budget of Naira 2.5 trillion ($20 billion) for 2010 based on a benchmark oil price of $50/barrel, the state news agency Thursday reported Finance Minister Mansur Muhtar saying.

This compares with the $45/b benchmark Nigeria adopted for the purpose of revenue projections in the 2009 budget.

Muhtar told NAN that the expenditure profile is made up of government proposed Naira 860 billion as capital and recurrent expenditure of Naira 1.6 trillion. The 2010 budget, according to Muhtar, will focus on two critical areas namely, investment in gas supply and distribution, and exploration of additional sources of fueling power plants aimed at generating 11,000 MW of electricity.

The minister said the oil price benchmark could be raised with the approval of the National Assembly as oil prices had improved.

"There is an ongoing discussion to [revise] this upward in relation to the oil price benchmark. There is an indication that this may be reviewed upward because the oil prices have gone up reasonably," said Muhtar.

President Umaru Yar'Adua on Tuesday submitted a medium-term budgetary framework covering the period 2010 to 2012 to the Senate for approval, which sets an oil production target of 2.08 million b/d for next year.

Muhtar said the medium-term expenditure framework proposed a decline in capital spending over last year, but that government would give attention to meeting all the challenges facing the country by injecting money drawn from its excess crude account.

Nigeria on Tuesday approved the release of $2 billion from its savings from extra oil incomes to stimulate its economy.

--Staff, newsdesk@platts.com