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Vice
President Yemi Osinbajo
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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 subsidize fuel.
The
Punch report continues:
“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 US$5bn (about N985bn),” Bloomberg quoted the vice
president as saying.
Brent
oil in London has dropped more than 60 per cent to below US$28 a barrel since November
2014, as shale production from the United States increased and the Organization
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 US$30 a barrel oil,” he explained.
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