The Federal Government has disclosed plans to reduce subsidies on petroleum products by half next year after sharp falls in universal crude prices, spurred a reversal of its 2015 budget downwards.
A revised budget figure was submitted by President Goodluck Jonathan to lawmakers last week, proposing to spend 458.68 billion naira ($2.59bn) on petrol subsidy in 2015, down from 971.14 billion naira presented for 2014.
It also assumed additional cuts to petrol subsidies in 2016 to 408.68 billion naira and 371.18 billion naira for 2017.
The Minister of finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala has proposed reducing the assumed benchmark oil price for the 2015 budget to $73 per barrel from the $78 proposed in September, after the collapsed of universal crude prices.
The minister told source last week that the fall in oil price, which has lost almost 30 percent since July, would impact the economy, which requires the government to cut non-essential expenses and raise more revenues.
The federal government tried to put an end to subsidy in 2012 in effort to cut government expenses and encourage urgently needed investment in local refining, doubling the price of a litre of petrol to about 150 naira ($0.93) from about 65 naira overnight.