The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane, has told Nigerians to expect an increase in the price of petrol.
Rewane said this in a paper he presented in May 8, 2019 at the Lagos Business School Breakfast Session.
He said that fuel subside was a huge drain on government’s revenue, adding that the World Bank put Nigeria’s total subsidy bill in 2018 at N731 billion.
He said: “A gradual reduction in subsidy payments [is] anticipated.
“Only N305 billionn set aside for under-recovery in 2019 budget; expect an increase in the pump price of fuel.
“40 per cent shortfall in provision for subsidies (under-recoveries) points to possible price increases.”
Rewane, however, said there is no doubt that an increase in fuel price will lead to high inflationary pressure.
Speaking on the increase in salary for workers, he said: “States 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. S
“o, 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.
“IGR remains key to the funding of the new minimum wage.
“Funding through the statutory allocation (Federal Accounts Allocation Committee) is unsustainable.”