Homepage - Online Entertainment and Lifestyle Magazine in Nigeria
www.happenings.com.ng
Rewane
Rewane
News

“Nigerians Should Expect Petrol Price Increase,” Says Rewane   

Rewane predicts price hike of petroleum product.     

Funsho Akinwale

Bismarck Rewane, the Managing Director and Chief Executive Officer, Financial Derivatives Company, on Tuesday, disclosed that the federal government may likely increase the fuel price following fuel subsidies that have taken a large chunk of the government revenue.

The prominent financial expert dropped the hint on Tuesday during his presentation at the Lagos Business School breakfast session.

Explaining further, he noted that the World Bank put Nigeria’s total subsidy bill in 2018 at N731 billion, adding that a gradual reduction in subsidy payments is anticipated.

He said that only N305bn has been set aside for under-recovery in 2019 budget and warned the public to expect an increase in the pump price of fuel.

“40 per cent shortfall in provision for subsidies (under-recoveries) points to possible price increases,” he stated.

The Rivers State born financial guru, however, said a petrol price hike would result in high inflationary pressure. According to Rewane, Nigeria has one of the lowest tax to Gross Domestic Product ratios at 5.3 per cent.

He described the 2019 budget as counter-cyclical, saying the economy was in dire need of a boost.

“Oil revenues are projected to decline due to the impact of OPEC quota on Nigeria’s oil output level,” he added.

On new minimum wage funding and its impact on states, Rewane noted that states civil service accounted for about 1.9 million workers.

“States get 85 per cent of Value Added Tax, as well as other statutory allocations, in addition to internally generated revenue. Personnel expenses of most states exceed IGR.

“But labour optimization will help boost productivity.

“There is a possibility of another 25 basis point cut. Credit to the private sector shrank again in April,” he added.