The Nigerian Federal Government has disclose it’s plans to subsides the petroleum product by half next year after rapid decrease in crude in global crude price towards a reversal of its 2015 budget. The president of Nigeria, President Goodluck Jonathan handed over the revised budget figures to lawmakers last week, proposing to spend 458.68 billion naira ($2.59 bln) on petrol subsidy in 2015, down from 971.14 billion naira presented for 2014.
It also assumed further cuts to petrol subsidies in 2016 to 408.68 billion naira and 371.18 billion naira for 2017.
The Minister of finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala has proposed lowering the assumed benchmark oil price for the 2015 budget to $73 per barrel from the $78 proposed in September, after global crude prices collapsed.
Nigerian FG to Reduce Oil Subsidy
Ngozi Okonjo-Iweala told Reuters last week that the fall in the price of oil, which has lost almost 30 percent since July, would impact the economy, requiring the government to cut non-essential spending and raise more revenues.
The budget proposals assumed an exchange rate of N162 to the U.S. dollar for 2015, weaker than N160 assumed for 2014. It expects the naira to weaken further to 163.50 in 2016, reaching 165 in 2017.