The Minister of Finance, budget and national planning, Zainab Ahmed, said the federal government is targeting local borrowing in 2022 to fund subsidy payments.
She stated this during an interview with Reuters.
He added that the government will utilize $2.2 billion of the fund raised through Eurobond to cater for petrol under recovery costs.
She recalled that in September 2021 Nigeria raised $4 billion through Eurobond insurance, but this year the country will not tap Eurobond market.
“However the rising oil prices have put us in a very precarious position because we import refined products and it means that our subsidy cost is increasing”, said Aljiha Zainab.
The Minister further said that the government is working with lawmakers to boost revenues, and that the rise in oil prices means that borrowing will increase more than planned.
” The Russian invasion of Ukraine sent oil prices higher and injected uncertainty into an already off-balance worldwide, economy.”
The Minister disclosed that Nigeria’s high oil prices means high subsidy payment for the government to sell petrol below the International market rate, as the nation depends almost entirely on import to meet it’s domestic gasoline need.