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Rising oil boosts Nigeria’s 2021 budget but creates fuel price headache

(The Southern African Times) – Nigeria is optimistic about funding its 2021 budget due to rising oil prices, but is engaged in a “tussle” with organised labour over how it can end fuel subsidies without harming the poor, Finance Minister Zainab Ahmed said on Monday.

Oil prices, which are averaging around $10 per barrel above the level projected for the 2021 budget, are good for the nation’s revenues, she told journalists, but are complicating plans to end costly fuel subsidies. 

“We made recommendation to deregulate the pricing of (gasoline). But we have a stalemate with labour,” she said, calling the oil price rise a “double edged sword”.

The government promised an end to the fuel subsidies last year, but rising oil prices have complicated the effort. 

State oil company NNPC is negotiating with organised labour to find a way to allow petrol prices to float without unduly harming the nation’s poor and working class.

Oil prices are averaging around $50 per barrel, above the $40 per barrel projected in the 13.6 trillion naira ($35.74 billion) budget document.

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