Nigerian Senate considers removing oil subsidy, devaluing Naira

Tue, Mar 17, 2020
By publisher
2 MIN READ

Business

THE Nigerian Senate is considering removing fuel subsidy and devaluing the Naira as part of measures to contain the impact of the forthcoming economic meltdown arising from the global pandemic caused by a coronavirus (COVID-19).

The Senate is also considering a review of the Appropriation Act 2020 as passed by the National Assembly because the revenue projection is no longer realistic because of the crash in oil prices. As of March 16, the OPEC daily basket price for a barrel of crude is $30.63 as against the $57 projected in the 2020 budget.

The sharp drop in oil prices resulted from the bruhaha between the governments of Saudi Arabia and Russia. In addition, the outbreak of the coronavirus (COVID-19) pandemic is weighing heavily not only on Nigeria but on the global economy as well.

The Senate’s position is contained in the interim report of its Joint Committee on Finance, Appropriations, National Planning, and Petroleum Resources (Upstream) set up last week to liaise with relevant agencies of the Federal Government to recommend solutions for the country to cope with the adverse effects of COVID-19 on the world economy.

Senator Solomon Adeola, chairman of the Joint committee, stated in the report that the current Appropriation Act 2020 passed by the National Assembly compared with the cost of production of a barrel of crude oil in other petroleum-producing countries.

The report looked at the reality of the current situation of the government in terms of the number of agencies and parastatals, putting into perspective the Oronsanye panel report; they need to prioritize both the social and the real sector of the economy looking at their importance to the overall benefit of Nigeria; loss of revenue as a result of gas flaring which runs into several billions of dollars; devaluation of Naira; removal of oil subsidy and other sundry issues.”

The Senate adopted the interim recommendations of the committee which among others mandated the Senate joint committee to continue to engage the executive arm of government to keep the Senate abreast of the current ongoing in the economic front.

– Mar. 17, 2020 @ 18:45 GMT |

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