Given that fuel prices are currently not reflecting the country’s costs, the World Bank has stated that the Federal Government may still be covering fuel subsidies.
It claimed that instead of the N650 per litre that Nigerians now pay for petrol, the price should be about N750 per litre.
Turning the Corner (from reforms and renewed hope, to results) was the title of the bank’s Lead Economist for Nigeria, Alex Sienaert’s presentation on Wednesday in Abuja during the Nigeria Development Update, December 2023 edition.
According to the official exchange rate of today, fuel should cost N750 per litre, he mentioned during the hybrid event.
“It appears that fuel prices are not entirely adapting to market conditions, which suggests a partial reimbursement of the subsidy,” he stated. This is based on an estimation of the cost that reflects the retail PMS price of the potential customer and assumes importation at the official foreign exchange rate.
“Of course, the primary supplier, parallel rates, are being liberalized; otherwise, the price would be much higher. To give you an idea of what cost-reflective pricing probably looks like, these are only estimates.
“We believe that instead of the N650 per litre that Nigerians currently pay, the price of gasoline should be about N750 per litre.”
He emphasized that in order to ensure that the government reaps the rewards of its audacious reforms, the bank is advising it to take further actions.
