The World Bank has revealed that the Federal Government may be subsidizing fuel, as the current price in the country is not reflective of the actual cost.
- Nigerians should be paying about N750 per litre, which is more than the N650 per litre they are now paying.
- President Tinubu, announced the removal of the fuel subsidy, resulting in an increase in the petrol pump price from N197 to between N480 and N570.
- Nigeria reportedly paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre, amidst fluctuation in the global oil market.
This was disclosed by Alex Sienaert, the Lead Economist for the World Bank in Nigeria, during his presentation on Wednesday in Abuja of the Nigeria Development Update, December 2023 edition, entitled “Turning The Corner (from reforms and renewed hope to results).”
According to him, Nigerians should be paying about N750 per litre, which is more than the N650 per litre they are now paying.
“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 the retail PMS price of the would-be and assume that importation is done at the official FX rate.”
“Of course, the liberalization 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.”
The Federal government, led by President Bola Tinubu, announced the removal of the fuel subsidy, resulting in an increase in the petrol pump price from N197 to between N480 and N570. Since then, it has undergone different price modifications reflective of the international oil price rate, and fuel prices were subsequently reviewed upward to N6
However, Daily Trust reported that despite the numerous assurances by Tinubu that subsidy was gone, the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre, amidst fluctuation in the global oil marke
The World Bank also stressed that the Nigerian National Petroleum Corporation (NNPC), widely accused of being the most opaque oil company globally, needs to be transparent as the government drives reforms to achieve its renewed hope agenda.
It said such transparency would help ensure accuracy in the profits and oil revenues to be remitted to the federation account.
FAAC had on several occasions accused NNPC of short-changing it by refusing to pay over N2 trillion to the federation account from crude sales, royalties and tax