Senate Committee on works has proposed a five Naira petrol tax on every litter of petrol purchased in Nigeria. The committee has thus proposed a marginal increase in petrol prices to help fund road repairs in the the country. The Senate Committee on Works recommended a fuel levy of N5 per litre on imported and locally produced petrol to fix roads in Nigeria, according to the proposal which the members of the have accepted.
It will be recalled that the government last year increased petrol price to N145 a litre as it struggled to fund capped prices amid a steep devaluation of the Naira and low oil prices. The Senate has yet to debate the motion which would also have to be approved by the House of Representatives.
The government has proposed a record N7.44 trillion budget for 2017 that includes increasing capital expenditure by a quarter to fix pot-holed roads, overhaul railways and improve power supply. But funding has proved difficult due to low oil prices. Talks with the World Bank over a loan have stalled over a lack of required economic reforms, diplomats say.
National Assembly approved the 2017 budget on May 11 but a government official said this week talks were still ongoing with lawmakers before Acting President Yemi Osinbajo could sign it into law. President Muhammadu Buhari is in Britain for medical treatment. Raising fuel prices is politically sensitive in Nigeria and may not get the support of over burdened populace who are struggling amid the first economic recession in a quarter of a century and with annual inflation hitting 17.24 percent in April.
The last fuel price hike resulted in increases in the prices of food items as a result of high cost of transportation. According to the National Bureau of Statistics “The top items to have recorded the highest year on year increases across all the divisions were solid fuels, bread and cereals, meat, liquid fuels, clothing materials, other articles of clothing and clothing accessories, and Fish.
“On a month-on-month basis, the Headline index increased by 1.60 per cent in April 2017, 0.12 percent points lower than the rate recorded in March. On a month on month basis, the highest rise in prices were dominated by food items including coffee, tea and cocoa, potatoe, yam and tubers, bread and cereals, milk cheese and eggs and meat and fish.
“The Composite Food Index rose by 19.30 per cent in April 2017. On a month-on-month basis, the Food subindex increased by 2.04 per cent in April, down by 0.17 per cent points from 2.21 per cent recorded in March. The rise in the index was caused by increases in prices of bread, cereals, meat, fish, potatoes, yams and other tubers, coffee, tea and cocoa, milk cheese and eggs and oils and fats.
The average annual rate of change of the Food sub-index for the twelve-month period ending in April 2017 over the previous twelve-month average was 17.11 per cent, 0.51 percent points from the average annual rate of change recorded in March (16.60) per cent”.
