By Godson Ikiebey-
The chief executive officer, Financial Derivatives, Bismarck Rewane, has asked Nigerians to brace up for an increase in the pump price of petrol.
Rewane said this while making a presentation at the Lagos Business School.
According to him, there were indications that the price of fuel would rise because government is working towards reducing subsidy payments.
The financial expert described subsidies as a huge drain on government’s revenue, saying that the World Bank put Nigeria’s total subsidy bill in 2018 at 731 billion naira. He said:
“A gradual reduction in subsidy payments is anticipated. Only N305 billion set aside for under-recovery in 2019 budget; expect an increase in the pump price of fuel.
“Forty percent shortfall in provision for subsidies (under-recoveries) points to possible price increases”.
He went further to say that the hike in price of petrol would result in high inflationary pressure.
According to him, the 2019 budget is counter-cyclical, saying the economy was in dire need of a boost.
He also said that with expenditures much higher than sustainable revenues, the fiscal deficit had widened by 2.15 percent to N1.9 trillion saying that the supplementary budget could not be avoided.
“Oil revenues are projected to decline due to the impact of OPEC quota on Nigeria’s oil output level”.
On the new minimum wage, he said internally generated revenue remains the key to funding it, adding that it is not sustainable to rely on the federal accounts allocation committee (FAAC).
Rewane said the capacity of the economic management team will determine the success of President Muhammadu Buhari in the second term.
He projected that President Buhari would have unveiled his cabinet by June, saying “the post cabinet selection squabbling will lead to splintering of the All Progressives Congress”.
The financial expert also said that the election tribunal results will “upset at least four governorship races”.