…..As oil price drops below $40 per barrel
The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that the resurgence of COVID-19 in Europe, which has caused the oil price to decline in the international market, may affect the 2021 budget estimates and Implementation .
The 2021 budget was predicated on $40 per barre as benchmark but the current price of the crude oil in the market hovers between $37 $38 per barrel .
The Finance minister said though the federal government “took the safer path” to benchmark the crude oil price in the 2021 budget but the second wave of COVID-19 in Europe threatened the estimate.
Ahmed stated this on Thursday when she appeared before the Senate Committee on Financed!!!! to defend her ministry’s budget.
The chairman of the panel, Senator Adeola Olamilekan (APC, Lagos) had asked the minister about the contingency plans the federal government has put in place to insulate the budget from the shocks of falling oil price.
Responding, the minister said: “The actual projection was $40 per barrel and that is the average price that we projected to be for the year . Some of the institutions that are responsible for tracking price of crude oil, actually have crude oil price going as far as $50, $52 per barrel.
“We took the safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next two or three weeks .
” Luckily the entire budget proposals are still at the stage of consideration , giving us the required window of making reviews ” ,she said .
The minister, however, dismissed insinuations that the federal government may increase Value Added Tax (VAT) again by 2.5% in 2021.
Her words : “As for the finance bill we have the draft. There will be no increase in VAT or any form of taxes because we see 2021 as a year of of recovery – not only got but businesses as well”.
