FG set to increase fuel price
by Adejoke Adegoke

Fuel prices are expected to go up next year,
as the federal government plans to cut
subsidies on petroleum products by half in the
2015 budget.

This follows sharp falls in global crude prices,
spurred the government to revise its 2015
budget downwards, data from the revised
budget seen by Reuters showed on Friday.
President Goodluck Jonathan submitted the
revised budget figures to the National
Assembly last week, proposing to spend
N458.68 billion ($2.59 bln) on petrol subsidy
in 2015, down from N971.14 billion presented
for 2014.

It also assumed further cuts to petrol
subsidies in 2016 to N408.68 billion and
N371.18 billion for 2017.
Finance Minister, Dr. Ngozi Okonjo-Iweala, has
proposed lowering the assumed benchmark
oil price for the country’s 2015 budget to $73
per barrel from the $78 proposed in
September, after global crude prices
collapsed.

Okonjo-Iweala told Reuters on Thursday that
declines in the price of oil, which has lost
almost 30 percent since July, would impact
Africa’s largest economy and top oil producer,
requiring the government to cut non-essential
spending and raise more revenues.

Nigeria tried to end subsidy in 2012 in efforts
to cut government spending and encourage
badly needed investment in local refining,
doubling the price of a litre of petrol overnight
to about 150 naira ($0.93) from about 65
naira. The move angered citizens, who see cheap
petrol prices as the only benefit they derive
from living in an oil-rich country, and led to
eight days of nationwide strikes.

The government later reinstated part of the
subsidy to end the strikes. The budget
proposals assumed an exchange rate of 162
naira to the U.S. dollar for 2015, weaker than
160 naira assumed for 2014. It expects the
naira to weaken further to 163.50 in 2016,
reaching 165 in 2017.

The naira has come under pressure in the past
two months, losing almost 11 percent this
year, from falling oil prices, which have
weakened appetites for assets in Africa’s
biggest economy and chief oil exporter.
The currency shed 0.76 percent on Friday to
close at a record low of 177.45 naira against
the greenback, despite the central bank
intervening for a fifth day with dollar sales to
prop it up, dealers said.
www.newmail-ng.com

Is this news true?

the handwriting has always been on the wall and is not too late to increase one's sources of income to make its effect less felt or not at all. i hope foreign expenses would decrease in govt spendings and home grown facilities are patronised.