Fuel subsidy to go next year, FG to sell petrol at N97 per litre

*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.
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