The International Monetary Fund (IMF) has stated that the Nigerian government has resumed the payment of subsidies on the premium motor spirit (PMS), otherwise known as petrol.
It would be recalled that during his swearing-in speech held on May 29, 2023, President Bola Tinubu announced an end to the payment of petrol subsidy.
Meanwhile after a few weeks, the Central Bank of Nigeria (CBN) collapsed the several exchange rate regimes into one, with the value of the Naira to the Dollar declining.
Few days ago, the IMF released a statement on the conclusion of its Executive Board’s Post Financing Assessment with Nigeria and it expressed worries that the government had capped the prices of fuel at retail stations.
The IMF admonished the Tinubu-led administration to completely stop the payment of subsidies on petrol to free funds to run the government.
While others currently sell the PMS above N600, After the removal of the petrol subsidy in May 2023, the pump price changed from N185 per litre to N400 per litre and then to N568 per litre at NNPC filing stations.
Though the government had stated that the prices would fluctuate after subsidy removal from time to time however the pump price has remained steady despite the unstable prices of crude oil in the global market.
In a statement issued earlier, the IMF was quoted as saying “capped retail fuel and electricity prices” ostensibly to “ease the impact of rapidly rising inflation on living conditions,” “thus partially reversing the fuel subsidy removal.”
The global lender, however noted further that, “Fuel and electricity subsidies are costly, do not reach those that most need government support and should be phased out completely.”
The IMF commended the government’s focus on revenue mobilization and digitalization, adding that this will improve public service delivery, safeguard fiscal sustainability and eliminate the need for CBN financing through ways and means, which have grown above N20 trillion
