Mr. Bismarck Rewane, appointed by Mr. Muhammadu Buhari, the Nigerian president to head the committee on minimum wage negotiation among the government and the organized labour (the Nigeria Labour Congress and the Trade Labour Congress) and the former chief executive officer of Financial Derivatives Company Limited, has disclosed that government is working towards increasing the pump price of petrol and has asked Nigerians to brace up for the development.
Rewane in his presentation at the Lagos Business School, disclosed that government is concluding plans to reduce petrol subsidy which will lead to the rise of petrol pump price.
The financial expert described the subsidy payment as a scheme that has taken up amount of money that is supposed to have been channeled to other things.
He pointed out how the World Bank report shows, Nigeria in 2018 spent over N731 billion in petrol subsidy.
“A gradual reduction in subsidy payments is anticipated. Only N305bn set aside for under-recovery in 2019 budget; expect an increase in the pump price of fuel,” he said.
“Forty per cent shortfall in provision for subsidies (under-recoveries) points to possible price increases.”
He also warned that the increase in petrol price will lead to high inflationary rate.
He pointed out that, the only way for states to pay the new minimum wage is for state to embark on internally generated revenue, saying that there is no way states will depend on the allocation from the federal government to sustain payment of salaries.