Tag Archives: Slashes

Nigeria Slashes 2015 Fuel Subsidy By 90% Following Oil Price Slide

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Nigeria will slash petrol subsidies by 90 percent this year because government revenues have been hit by the slump in oil prices.

The government had said it would gradually phase out fuel subsidies which are a significant burden on public finances, but cutting subsidies risks aggravating a fuel crisis in the country.

Major cities are experiencing a crippling gasoline shortage as oil importers feel the pinch from unpaid government subsidies, a plummeting local currency and tighter credit lines triggered by lower crude prices, oil traders and local industry sources say.

While Nigeria is Africa’s biggest oil producer, a neglected refining system means it is almost wholly reliant on imports for the 40 million litres per day of gasoline it consumes.

Parliament approved the reduction in subsidies to 100 billion naira ($505 million) for 2015, Finance Minister Ngozi Okonjo-Iweala said late on Tuesday. The cuts were accounted for in last week’s 4.49 trillion naira budget for 2015, but the breakdown was not announced until Tuesday.

Read More: reuters

Senate Slashes Subsidies on Petrol & Kerosene

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The Senate on Wednesday, slashed the allocation for petrol and kerosene subsidies presented by the Ministry of Finance in the Medium Term Expenditure Framework for 2015 – 2017.

The upper chamber, while approving the MTEF, slashed petrol subsidy from N200 billion to N100 billion. It also reduced the subsidy allocated to kerosene from N91.08 billion to N45.52 billion.

Chairman of the Joint Committee on Finance and National Planning; Economic Affairs and Poverty Alleviation, Sen. Ahmed Makarfi, said the reduction was due to the fall in oil prices at the international market. “The joint committee recommends a downward review of subsidy payment for PMS from N200 billion to N100 billion and kerosene from N91.08 billion to N45.52 billion.

“This is as a result of the current low prices in crude oil prices at the international oil market.

“The relevant committees of the National Assembly should through oversight, ensure the full implementation of the proposed kerosene subsidy and the availability and of the product’’, he said.

Makarfi also said the reduction in the subsidy allocations to petrol reflected government’s commitment to transparency and accountability in the entire oil and gas sector. In his remarks, the Senate President, David Mark said there was need for a budget cut across the three arms of government in view of the current economic reality.

Mark said the government must continue with it reform policy in order to promote the growth of the non-oil sector. He expressed delight on the expeditious passage of the MTEF.

Credit: NAN