Concerns regarding the Federal Government’s ongoing financial burden from fuel subsidies have been voiced by the World Bank.
It stated that the recommended price for gasoline should be about N750 per litre, which is more than what Nigerians currently pay, which is N650 per litre.
The World Bank’s Lead Economist for Nigeria, Alex Sienaert, believes that the optimal price for gasoline should be around N750 per litre, which would be a substantial rise above the N650 per litre that Nigerians currently pay.
Petrol Tops N500/ltr As Subsidy Removal Takes Effect
According to Punch, Sienaert made this revelation on Wednesday in Abuja during a hybrid event where she presented the Nigeria Development Update for December 2023, with the theme “Turning The Corner (from reforms and renewed hope, to results).”
Throughout the talk, Sienaert underlined that the real cost of fuel should be N750 per litre given the official exchange rate. The disclosure casts doubt on the viability of the current gasoline subsidy scheme and its long-term effects on the nation’s economic prospects.
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.
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“We think the price of petrol should be around N750 per litre more than the N650 per litre currently paid by Nigerians.”
He stressed that in order to guarantee that the benefits of those actions are realised, the bank advises the government to enact additional steps in addition to its bold reforms.
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