Why Nigeria slashed budget, petrol price

The Nigerian government has announced a reduction in the 2020 budget by N1.5 trillion.

It also slashed the price of premium motor spirit, popular as petrol, from N145 to N125.

Announcing this on Wednesday, the Minister of Finance, Budget and National Planning, Ahmed Zainab, also disclosed that guidelines on how the reduction would be made had been sent to the ministries.

There has been a continuous fall in the price of crude oil in the international market, which is fallout of the dispute between Saudi Arabia and Russia.

Addressing state house correspondents after the Federal Executive Council, the minister said, “The president has approved that we should cut down the capital expenditure budget by 20 per cent across Ministries, Departments and Agencies, and a 25 per cent cut of all government-owned enterprises. These include the ones that are in the national budget.

“What we have done is that we have written every ministry and we have given them guidelines on how these adjustments will be made to enable us to have detailed inputs from the ministries. But I can just say that the bulk cut is above N1.5 trillion.

Zainab added that the reduction included N457bn from PMS under-recovery.

She also said that the federally-funded upstream projects would also be affected by the reduction and at 25 per cent also, but would have to be worked out once inputs have been received from the ministries.

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