{"id":31922,"date":"2019-05-15T12:13:12","date_gmt":"2019-05-15T11:13:12","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=31922"},"modified":"2019-05-15T12:13:12","modified_gmt":"2019-05-15T11:13:12","slug":"nigerians-should-expect-petrol-price-increase-says-rewane","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/nigerians-should-expect-petrol-price-increase-says-rewane\/","title":{"rendered":"Nigerians Should Expect Petrol Price Increase, Says Rewane"},"content":{"rendered":"

The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, has said fuel subsidies are a huge drain on government\u2019s revenue.<\/p>\n

Rewane stated this in his presentation at the Lagos Business School Breakfast Session on May 8, a copy of which was obtained by our correspondent on Tuesday.<\/p>\n

He noted that the World Bank put Nigeria\u2019s total subsidy bill in 2018 at N731bn, saying, \u201cA gradual reduction in subsidy payments [is] anticipated. Only N305bn set aside for under-recovery in 2019 budget; expect an increase in the pump price of fuel.<\/p>\n

\u201c40 per cent shortfall in provision for subsidies (under-recoveries) points to possible price increases.\u201d<\/p>\n

The financial expert, however, said a petrol price hike would result in high inflationary pressure.<\/p>\n

According to Rewane, Nigeria has one of the lowest tax to Gross Domestic Product ratios at 5.3 per cent.<\/p>\n

He described the 2019 budget as counter-cyclical, saying the economy was in dire need of a boost.<\/p>\n

He said with expenditures much higher than sustainable revenues, the fiscal deficit had widened by 2.15 per cent to N1.9tn, adding that the supplementary budget could not be avoided.<\/p>\n

\u201cOil revenues are projected to decline due to the impact of OPEC quota on Nigeria\u2019s oil output level,\u201d he added.<\/p>

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On new minimum wage funding and its impact on states, Rewane noted that states civil service accounted for about 1.9 million workers.<\/p>\n

He said, \u201cStates 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. So, there is either an expense problem or a revenue problem. For social reasons, headcount rationalisation may be farfetched. But labour optimisation will help boost productivity.<\/p>\n

\u201cIGR remains key to the funding of the new minimum wage. Funding through the statutory allocation (Federal Accounts Allocation Committee) is unsustainable.\u201d<\/p>\n

He said an increase in VAT might provide temporary succour, complemented by the improved tax administration.<\/p>\n

According to Rewane, other measures include privatisation \u2013 partially sell equity across state-owned enterprises; liberalisation \u2013 private sector-led projects; commercialisation \u2013 rental income from idle assets; and concessions \u2013 fees from long-term leasing of assets.<\/p>\n

He noted that the cut in the monetary policy rate, also known as the benchmark interest rate, had no impact on investment, output and savings in April.<\/p>\n

The Monetary Policy Commission of the Central Bank of Nigeria had in March cut the MPR to 13.5 per cent from a record high of 14 per cent<\/p>\n

\u201cThere is a possibility of another 25 basis point cut. Credit to the private sector shrank again in April,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, has said fuel subsidies are a huge drain on government\u2019s revenue.<\/p>\n","protected":false},"author":6,"featured_media":31923,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,1593,17,624],"tags":[4220,5293],"coauthors":[2391],"class_list":["post-31922","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-metro","category-news","category-politics","tag-bismarck-rewane","tag-petroleum-pump-price"],"yoast_head":"\nNigerians Should Expect Petrol Price Increase, Says Rewane - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/nigerians-should-expect-petrol-price-increase-says-rewane\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nigerians Should Expect Petrol Price Increase, Says Rewane - 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