Senate propose petrol price increase to fix roads

The Nigerian senate was adjourned after a fire scare
The Nigerian senate at the Upper Chamber

Nigeria’s Senate Committee on Works has proposed a marginal increase in petrol prices to help fund badly needed road repairs in the West African nation, according to a document seen by Reuters.

Raising fuel prices is politically sensitive in Nigeria where many people are struggling amid the first economic recession in a quarter of a century and with annual inflation hitting 17.24 percent in April.

The Senate Committee on Works has recommended a fuel levy of 5 naira ($0.0159) per litre on imported and locally produced petrol to fix roads in Nigeria, according to the proposal approved on Thursday.

The government last year increased gasoline prices to 145 naira a litre as it struggled to fund capped prices amid a steep devaluation of the naira currency and low oil prices.

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The Senate has yet to debate the motion which would also have to be approved by the lower chamber, the House of Representatives.

The government has proposed a record 7.44 trillion naira 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.

Parliament 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.