The World Bank has revealed that the Tinubu led federal government may still be paying for fuel subsidy, taking into account that fuel prices are currently not cost-reflective in the country.
That bank stated that the price of petrol should be around N750 per litre more than the N650 per litre currently being paid by Nigerians.
This was disclosed during a presentation of the Nigeria Development Update, December 2023 edition titled, ‘Turning The Corner (from reforms and renewed hope, to results) on Wednesday 13 December 2023 in Abuja, by the bank’s Lead Economist for Nigeria, Alex Sienaert.
During the event, which was hybrid, the Lead Economics said that based on the official exchange rate today, fuel should cost N750/litre.
“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 the cost reflective is of retail PMS Price of the would-be and assuming that importation is done at the official FX rate.
“We think the price of petrol should be around N750 per liter more than the N650 per liter currently paid by Nigerians.” He stated in parts
He stated that the liberalization is happening with the parallel rates, which is the main supplier and that the price would be even higher adding that these are just estimates to give one a sense of what cost-reflective pricing most likely looks like.
He appealed to the government to take additional measures with its bold reforms to secure the benefits from having taken those decisions to deregulate the downstream oil sector.
