Vice President Yemi Osinbajo has said the
Federal Government, which relies on crude oil
for about two-thirds of its revenue, is seeing a
silver lining to the plunge in crude prices
because it will no longer have to subsidise fuel.
“Lower oil prices also mean there is some
advantage,” Osinbajo said in a panel discussion
at the World Economic Forum in Davos,
Switzerland, on Thursday.
The decline “means that we are not paying any
subsidies, which frees up something in the order
of about $5bn (about N985bn),” Bloomberg
quoted the vice president as saying.
Brent oil in London has
dropped more than 60 per
cent to below $28 a barrel
since November 2014, as
shale production from the
United States increased
and the Organisation of
Petroleum Exporting
Countries refrained from
cutting output in the face
of a global oversupply in
an effort to defend market
share.
Nigeria, Africa’s largest oil
producer, will still face
challenges in financing its
budget deficit and aims to
increase Value Added Tax
and customs duty
collection to help plug the
gap, Osinbajo said.
“We think with adequate
governance around budget
management and around
expenditure management,
we can do quite a bit. If we
are able to do those
things, we might be able
to come away with under
$30 a barrel oil,” he
explained.
[Punch]
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