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COVID-19: FG expects crude oil earnings to drop by 90% in 2020

Due to the COVID-19 pandemic, the Federal Government on Thursday, May 7, predicted a drop in expected crude oil earnings for the remainder of 2020.

This was disclosed during a dialogue session on Nigeria’s response to the fall in oil prices and the COVID-19 pandemic between the Ministry of Finance, Budget, and National Planning; and the Department for Internal Development (DFID).

The panel was led by the Minister for Finance, Budget and National Planning; Mrs. Zainab Ahmed, who was ably supported by Prince Clem Agba (Minister of State, Budget and National Planning); Ben Akabueze (DG Budget Office of the Federation); and Lade Jaiyeola (CEO, Nigeria Economic Summit Group).

In a statement issued after the dialogue, it was revealed that the FG projected a decline of 90% in oil earnings for 2020.

“Estimated net oil & gas revenue available for Federation Account Allocation Committee (FAAC) distribution is now forecasted 80.0% lower at N1.1 trillion (vs. N5.5 trillion previously).”

This is despite a N649 billion reduction in allowable fiscal deductions by NNPC for federally funded projects.

A severe outbreak of COVID-19 in Nigeria could magnify the impact of low oil prices; and weaker domestic crude production, according to the panelists.

“As part of measures to alleviate the impact of COVID-19; the government has set up an Economic Sustainability Committee to, among others, assess systemic vulnerabilities and develop programs that would make the expected recession short-lived and ensure sustainable long-term growth.

“Measures are underway to strengthen agricultural value-chain with a strategic focus on land acquisition; road networks; and funding.”

Meanwhile, marketers under the umbrella of the Independent Petroleum Marketers Association of Nigeria (IPMAN) have revealed that they are yet to receive directives from the Nigerian National Petroleum Corporation (NNPC); regarding the new petrol pump price of N108 per litre.

This was disclosed by its National Vice President, Abubakar Maigandi on Wednesday, May 6 during an interview.

According to Maigandi, the NNPC may send the go-ahead notice once the marketers exhaust their stock at the previous price.

Investigations revealed that despite the NNPC’s announcement of a reduction of the pump price of the product from N125 to N125. 50 per litre on 30 March; virtually all the retail outlets; including the corporation’s affiliate ones still retain the former price.

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