Fuel subsidy to go 2016, FG will sell petrol at N97 per litre
The Federal government alerts Nigeria of harder times ahead as petrol will sell for N97 per litre in 2016. This is following increased pressure on revenue and expenditure profile, the Federal Government has finally given in to domestic and international pressures to remove fuel subsidy.
This increase is coming as crude oil prices hit a seven-year low with global reference crude, West Texas Intermediate and Brent trading yesterday at $34.7 and $36.7 per barrel respectively, effectively affecting Nigeria’s $38 per barrel benchmark for 2016 budget.
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The crash in price has resulted to about N1.45 trillion reduction in the value of the projected oil output in the international market which is based on production target increase expected in the 2016 plan to 2.2 million barrel per day (mbpd), up from the actual 1.9 mbpd in 2015.
The latest price shock will come in less than a week after the Federal Executive Council, FEC, approve the 2016 Medium Term Expenditure Framework (MTEF) which outlined government’s revenue as well as a deficit budget to be funded largely with income from the oil. The 2016 budget is derived from the Medium Term Expenditure Framework which is a three-year fiscal plan.