By Taofeek LAWAL, Abuja
This may not be the best of times to be a sitting Governor in Nigeria as the chairman of Nigeria Governors’ Forum (NGF) and Ekiti State Governor, Dr Kayode Fayemi, has stated that States may get zero statutory allocations from the Federation Accounts Allocation and Fiscal Commission (FAAC) in June this year because of the consistent fall in the price of crude oil.
Fayemi spoke on Channels Television programme, ‘Politics Today,” saying: “You have seen the difficulty that oil prices are experiencing around the world. So, it is a no-brainer. You don’t need to be a rocket scientist to know that you may not even have N200b to share as FAAC in June.
We are talking of June because oil is sold three months ahead. So, the ones that have been sold before now, they have given us that it is not as bad as it is.”
The COVID-19 pandemic ravaging the world has taken its toll on the global economy. On Monday, the U.S. crude oil futures collapsed below $0 for the first time in history amid a Coronavirus-induced supply glut.
The day ended at a stunning minus $37.63 a barrel as desperate traders paid to get rid of oil.
Brent crude, the international benchmark, also slumped, but that contract was nowhere near as weak because more storage is available worldwide.
While U.S. oil prices are trading in negative territory for the first time ever, it is unclear whether that will trickle down to consumers, who typically see lower oil prices translate into cheaper gasoline at the pump.
As billions of people around the globe stay home to slow the spread of the novel coronavirus, physical demand for crude has dried up, creating a global supply glut.
Traders fled from the expiring May U.S. oil futures contract in a frenzy on Monday with no place to put the crude, but the June WTI contract settled at a much higher level of $20.43 a barrel.
