The World Bank has stated that the Federal Government may still be paying for fuel subsidies, as fuel prices in the country are currently not cost-reflective.
It stated that Nigerians should pay about N750 per litre, which is more than the N650 per litre they are now paying.
The bank’s Lead Economist for Nigeria, Alex Sienaert, said this during his presentation of the Nigeria Development Update (NDU), December 2023 edition, on Wednesday in Abuja.
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 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.”
NNPC needs to be more transparent
As the government pushes reforms to accomplish its renewed hope agenda, the World Bank also stated that the Nigerian National Petroleum Company (NNPC) Limited, which is generally believed to be one of the opaquest oil firms globally, ought to be open and honest.
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This openness should make sure that the oil revenues and earnings that are going to the federation account are accurate.
The World Bank suggested that the government post information explaining petrol pump pricing regularly.
It stressed that the government should ensure transparency at its own oil company – the NNPC, “with regards to profits and oil revenues to be remitted to the Federation Account.”