THE World Bank has stated that the Federal Government of Nigeria, under the leadership of President Bola Ahmed Tinubu, may still be paying for fuel subsidy, considering that fuel prices are currently not cost-reflective in the country.
According to media reports, the World Bank said petrol price should be around N750 per litre more than the N650 per litre currently being paid by Nigerians.
This commendation was revealed by the Bank’s Lead Economist for Nigeria, Alex Sienaert, during his presentation of the Nigeria Development Update, December 2023 edition titled, ‘Turning the Corner (From Reforms and Renewed Hope, to Results) in Abuja.
During the hybrid event, he noted that based on the official exchange rate, fuel should cost about N750/litre.
He said, “It does seem like petrol prices are not fully adjusting to market conditions so that hints at the partial return of the subsidy, if we estimate what is the cost reflective of retail PMS price of the would-be and assuming that importation is done at the official FX rate.
“Of course, the liberalisation is happening with the parallel rates, which is the main supplier, the price would be even higher. These are just estimates to give you a sense of what cost-reflective pricing most likely looks like.
“We think the price of petrol should be around N750 per litre more than the N650 per litre currently paid by Nigerians.”
He highlighted that the Bank is recommending that the Government take additional measures with its bold reforms to secure the benefits of having taken those decisions.
