By BusinessNews Staff on January 23, 2016
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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