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Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 - Politics - Nairaland

Nairaland Forum / Nairaland / General / Politics / Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 (32488 Views)

Marketers Sell Petrol Above N145/L In 16 States (see the states) / Filling Stations In Awka Sell Petrol For N250 Per Litre / FG Ends Kerosene Subsidy, To Sell For N83 Per Litre (2) (3) (4)

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Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by oluwatomisin93(m): 5:45am On Dec 15, 2015
*As petrol ‘ll sell for N97 per litre
*Harder times ahead, FG alerts Nigerians
*Personnel cost to drop by N100bn
*FG to fund 2016 N6trn budget with IGR


By Emeka Anaeto, Economy Editor, Henry Umoru & Joseph Erunke

LAGOS — Following increased pressure on revenue and the expenditure profile, the Federal Government has finally yielded to domestic and international pressures to remove fuel subsidy.

This 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 disrupting Nigeria’s $38 per barrel benchmark for 2016 budget.

The crash has resulted into about N1.45 trillion shortfall in the value of the projected oil output in the international market based on production target increased in the 2016 plan to 2.2 million barrel per day (mbpd), up from actual 1.9 mbpd in 2015.
On official exchange rate of N198/ $1 upon which the revenue projection was based, the value of the total budgeted oil output is $35.14 billion or N6.95 trillion but with the latest price development, the output would now yield $27.8 billion or N5.5 trillion.

The latest price shock is coming less than a week after the Federal Executive Council, FEC, approved the 2016 Medium Term Expenditure Framework, MTEF, which outlined government’s revenue as well as a deficit budget to be funded largely by the oil income.The 2016 budget is derived from the MTEF which is a three-year fiscal plan.

FG to introduce tougher economic measures
Also, the oil price crash was coming at the backdrop of a warning from ministers in charge of the economic ministries and chief executives of federal parastatals in the economy sector that Nigerians should prepare ahead for what it called more austere conditions in view of the strict economic policies being put in place by the President Muhammadu Buhari administration.
The federal executives, who gave the warnings when they appeared before the joint committees of the National Assembly on Finance to defend the 2016, 2017 and 2018 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF & FSP, documents presented to the National Assembly by President Muhammadu Buhari are Ministers for Budget and National Planning, Udoma Udo Udoma; Finance, Mrs Kemi Adeosun and State for Petroleum Resource,Ibe Kachikwu; Governor, Central Bank of Nigeria, Godwin Emefiele and Executive Chairman, Federal Inland Revenue Service, FIRS, Babatunde Fowler.

To make the warning real, they disclosed that Federal Government would move fuel price from N87 to N97 per litre in 2016 while removing fuel subsidy, lamenting that excess of N1 trillion has been paid for fuel subsidy in 2015 alone.

2016 budget deficit to increase

With the latest crude oil price development, 2016 budget deficit would increase to about N2.7 trillion from N2.22 trillion, assuming government is able to meet its target of 2.2 mbpd, otherwise the deficit would be much higher.

Also, the development, according to economy analysts, would put more pressure on the external reserves and the exchange rate while forcing the government to resort to more borrowing, thereby increasing both its deficit-to-GDP ratio and debt-to-GDP ratio.

In the 2016 fiscal plan, deficit/GDP ratio was more than doubled to 2.2 per cent, from actual one per cent as at September 2015.

According to the 2016 fiscal plan, Federal Government would only have a marginally increased contribution from value added tax, VAT, at N67.7 billion in 2016, from N67.5 billion in 2015 while additional inflow of N350 billion is expected to come from misappropriated funds recoveries.
The deficit will necessitate borrowings worth N1.8 trillion of which domestic borrowing is fixed at N1.2 trillion while foreign borrowing is about N600 billion. If the oil price remains gloomy in the coming year borrowings would increase or the government would be forced to effect a further cut on expenditure.

Already, recurrent expenditure is projected to fall from 84 per cent in 2015 to 70 per cent in 2016 while capital expenditure is expected to increase from 16 per cent in 2015 to 30 per cent in 2016.
Harder times ahead, FG alerts Nigerians
The Federal Government had yesterday alerted Nigerians to prepare ahead for the tough economic conditions and policy responses it intends to roll out from next year just as it vowed to strictly monitor expenditure of all Ministries, Department and Agencies, MDAs to avoid wastes.

The Federal Government has also planned to reduce the personnel cost from N1.8 trillion to N100 billion as part of moves to reduce expenditure and save cost.

According to the minister, who appeared at the National Assembly, yesterday, attention would be given to Internally Generated Revenue, IGR, to fund the N6.1 trillion 2016 budget, adding that in 2016, it would remove fuel subsidy and reverse the earlier N10 per litre reduction effected by ex-President Goodluck Jonathan this year.



Speaking at the meeting, Udo Udoma, who noted that it was important that substantial reductions were made on the spending pattern if the expected change must come in, said: “In preparing the MTEF, we seek a dramatic shift from spending on recurrent to spending on capital aspect of the budget. It is going to be tighter for everybody. All non essential expenditure would be cut out. We will reduce the overheads by seven per cent.
“We are beginning a journey of change and change has to start with the clarity of purpose of where we are going.”

On the issue of N500 billion for Social Welfare Programme, Udoma said: “As at the time we were preparing the MTEF, we didn’t have the number and we didn’t want to put in anything that we are not 100 percent sure of. We are still going to relate with relevant agencies on the issue. We are making this arrangement because the NNPC and other stakeholders had advised against subsidy in 2016 although consultations are still ongoing in this regard.”

On sources of funding for the N6.1 trillion 2016 budget, the Budget and National Planning Minister, who disclosed that priority would be given to Internally Generated Revenue ,IGR, said: “We will also look at the accounts of agencies and sweep those surpluses that might not be on essential things that we want to focus on.”
Udoma, however, told the lawmakers that “ultimately we must borrow N1.8 trillion to fund this budget apart from all those adjustments we are trying to make.”

Strict monitoring of all MDAs

Also, Finance Minister, Kemi Adeosun, who told the joint committee of the National Assembly that expenditure of all MDAs would be strictly monitored to avoid wastes, said government would take steps to ensure that whatever money was being taken from the account of any MDA was done electronically.

The Finance minister, who noted that measures had been put in place to compel revenue generating MDAs to remit all funds they generated to the treasury, said: “The era when an agency generates money and spends 99 per cent of it is over.”
On strategy to reduce costs of governance, the minister said: “The country paid N1.8 trillion in 2015 as personnel cost but there is a strategy in place in the 2016 budget to reduce it by N100 billion. For instance, we are already working with banks so that we can go cashless, so that we could give debit cards to MDAs to procure items.

N1trn spent on subsidy in 2015

Also speaking, Minister of State for Petroleum Resources, Dr Ibe Kachikwu, who disclosed that with NNPC inclusive, Excess of N1 trillion was paid for fuel subsidy in 2015, with plans to move fuel price from N87 to N97 per litre in 2016 as well as total removal of fuel subsidy next year.

On the issue of daily oil production target, Kachikwu said, “From August this year, we have been exceeding two million daily production through stringent monitoring of our production by getting quick fixes to instances of pipelines breaking. The internal projection for our system next year is in excess of 2.4 million which is coming from enhanced and increased production from NPDC field.

“A lot of efficiency had really been applied in this regard. NPDC will for instance be producing 300, 000 barrels on its own while other partners would process at least 2.2m barrels. We would address issues of security and other impediments to the realization of our target. We are looking at a collective and holistic handling of security issues between the NNPC and the oil majors with us taking the lead.

On the oil price benchmark of $38, he said: “The projection at OPEC was along the line of the fact that once we do not interfere in term of production cost will lead to a southward movement in terms of pricing. We expect an increase as from early January when we expect it to go up by $45 to $50 per barrel in spite of OPEC projection. We expect it to hit $70 per barrel in 2017.”


http://www.vanguardngr.com/2015/12/fuel-subsidy-to-go-next-year/

3 Likes 1 Share

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by ORAFA(m): 5:59am On Dec 15, 2015
2015 (157), 2016 (97)= CHANGE

26 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by 989900: 6:02am On Dec 15, 2015
@$38/barrel, where is the subsidy?

The N97/l is high (considering cost of crude)
.

31 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by EasternLeopard: 6:05am On Dec 15, 2015
Where is the CHANGE the most sophisticated slaves insulted the SS/SE for


We the people of SS and SE have being vindicated.

86 Likes 6 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Flets: 6:06am On Dec 15, 2015
And zombies would this half news swallow hook, line and sinker.

How exactly would this govt predict prices after subsidy removal? Only the market forces will determine prices. The cabals who own the tank farms will continue to call the shots.

I hope the same sponsors and participants of Occupy 2012 will be on hand to repeat same. The height of hypocrisy is this geographical space called Nigeria is highly shameful.

80 Likes 9 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by fitzmayowa: 6:10am On Dec 15, 2015
Flets:
And zombies would swallow hook, line and sinker.

How exactly would this govt predict prices after subsidy removal? Only the market forces will determine prices


I tire ooo

30 Likes 3 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Sunnymatey(m): 6:10am On Dec 15, 2015
grin
Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by sunmike065(m): 6:14am On Dec 15, 2015
Well...of cause we can not all be ignorant. I and those who will understand in this hard time of economy crisis some strict decision would have to be made in other to revive it economy asap.

All am concern about is a quick solution to this economy issues.

16 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by okosodo: 6:14am On Dec 15, 2015
This was what these animals fought against. What kind of rubbish is this?

17 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Mjshexy(f): 6:25am On Dec 15, 2015
Seeing the hardship Nigerians are going through, i really hope this will not backfire, it would have been good if our refineries are fully in shape & producing at 100% before taking such steps, anyway it's good we stop servicing these cabals...

3 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by kossyablaze(m): 6:31am On Dec 15, 2015
Inconclusive FG

17 Likes 2 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by ikorodureporta: 6:36am On Dec 15, 2015
oluwatomisin93:
petrol ‘ll sell for N97 per litre
*Harder times ahead, FG alerts Nigerians
*Personnel cost to drop by N100bn
*FG to fund 2016 N6trn budget with IGR
By Emeka Anaeto, Economy Editor, Henry Umoru & Joseph
Erunke
LAGOS — Following increased pressure on revenue and the
expenditure profile, the Federal Government has finally
yielded to domestic and international pressures to remove
fuel subsidy.
This 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 disrupting Nigeria’s $38 per barrel
benchmark for 2016 budget.
The crash has resulted into about N1.45 trillion shortfall in
the value of the projected oil output in the international
market based on production target increased in the 2016
plan to 2.2 million barrel per day (mbpd), up from actual 1.9
mbpd in 2015.
On official exchange rate of N198/ $1 upon which the
revenue projection was based, the value of the total
budgeted oil output is $35.14 billion or N6.95 trillion but
with the latest price development, the output would now
yield $27.8 billion or N5.5 trillion.
FILE: Crowd and long queues of jerry cans at Capital Oil
filling station, along Lagos-Ibadan Expressway.
The latest price shock is coming less than a week after the
Federal Executive Council, FEC, approved the 2016 Medium
Term Expenditure Framework, MTEF, which outlined
government’s revenue as well as a deficit budget to be
funded largely by the oil income.The 2016 budget is derived
from the MTEF which is a three-year fiscal plan.
FG to introduce tougher economic measures
Also, the oil price crash was coming at the backdrop of a
http://www.vanguardngr.com/2015/12/fuel-subsidy-to-go-next-year/


This govt is so amature/insensitive. How can u announce it now wen we'r stil struggling with scarcity........that means this scarcity no go end dis year...

29 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by SurefireAsoOke: 6:37am On Dec 15, 2015
So our thought/hope of N50/Ltr is now dashed






For AsoOke, Check my signature

1 Like

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by husking425: 6:39am On Dec 15, 2015
What kind of rubbish

1 Like

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Standing5(m): 6:43am On Dec 15, 2015
A dwindling Naira value has pushed fuel prices up in local market. Imagine the diff when 1$ changed for N165 and N260 that's some 35% increase as against some ~40% decrease intl oil prices. PDP really fùcked things up.
| | |
¤¤¤
to the guy below, Subsidy didn't exhist technically. Buhari never meant subsidy isn't in existence. It wasn't logical to carry on with it. Marketters were stealing from it and the same govt who put the marketers into relevance couldn't manage their excesses. Buhari was right.

25 Likes 1 Share

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by ourema(f): 6:44am On Dec 15, 2015
Hypocrisy is when you remove something you never believed believed to have existed.

Hypocrisy is when you shouted! Crucify GEJ! When he removed fuel subsidy the but hail PMB
for the intention to remove it

118 Likes 13 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Nobody: 6:45am On Dec 15, 2015
There is no subsidy in the first place, and I don't see any reason why PMS shouldn't be sold for 60 with crude oil being sold for $37/barrel

23 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by looseweight: 7:40am On Dec 15, 2015
Okkk
Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by PLANETMARS(m): 7:40am On Dec 15, 2015
so as I wise reach I go vote this apc? Smh

19 Likes 5 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by ishiamu(m): 7:41am On Dec 15, 2015
Let's watch the outcome of things as it unfolds

1 Like 2 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Realdeals(m): 7:41am On Dec 15, 2015
Waste should be reduced by all means, if power supply is stable the noise over fuel prices will not be there.

4 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by funkyibodude(m): 7:42am On Dec 15, 2015
GEJ gradually being vindicated smiley shame gradually catching up with APC phools

50 Likes 4 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by kingstylo01(m): 7:42am On Dec 15, 2015
Akpos jumps from bed and starts shouting "God save me, save me, save me. The wife asked, did you have a nightmare? He says yes. The wife asked ask again, were you been chased by a lion? Akpos replied; lion is even better. I nearly voted for Buhari again grin cheesy

56 Likes 4 Shares

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Engineer123(m): 7:43am On Dec 15, 2015
Is it possible for filling station to sell at N97? The litre of PMS in my area is N135. Hmm! The question is what steps will they takes to make PMS available at every filling stations at control prize?

4 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Aristotle96(m): 7:43am On Dec 15, 2015
Change indeed... E just dy start grin

4 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by obaival(m): 7:43am On Dec 15, 2015
Habaa no b #50 as una claim,,,,,,,,




& dat s CHANGE.

3 Likes 1 Share

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Drinkwater(m): 7:43am On Dec 15, 2015
Talk, talk and talk. No result

3 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by Missmossy(f): 7:43am On Dec 15, 2015
Chai!!!


Why not this year ??


Its obviously affecting the festivities already.

4 Likes

Re: Fuel Subsidy To Go Next Year. FG To Sell Petrol At 97 by lonelydora: 7:45am On Dec 15, 2015
Supported

1 Like

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