Government to Save $985 Billion from Removal of Fuel Subsidy – Osinbajo

According to the Vice President Yemi Osinbajo, the Federal Government is beginning to notice a silver lining in the fall in crude prices as fuel no longer has to be subsidised. ”we are not paying any subsidies, which frees up something in the order of about $5bn (about N985bn),” Bloomberg quoted the vice president as saying.

However, Brent oil in London has discarded more than 60 per cent to below $28 a barrel since November 2014, as shale production from the United States increased and the Organisation of Petroleum Exporting Countries retrained from cutting output in the face of a global oversupply in an effort to defend market share.

Osinbajo revealed that 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.

He explained, “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 $30 a barrel oil.”