For the World Bank, Nigerians should be paying N750 for a litre of petrol, if prices are to truly reflect cost and current exchange rate.
World Bank’s Lead Economist for Nigeria, Alex Sienaert, stated this during his presentation of the Nigeria Development Update, December 2023 edition, titled ‘Turning The Corner (from reforms and renewed hope, to results)’ in Abuja on Wednesday.
Sienaert argued that the Federal Government may still be paying for fuel subsidy, considering that fuel prices are currently not a true reflection of cost in the country.
“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.
“We think the price of petrol should be around N750 per litre more than the N650 per litre currently paid by Nigerians.”
Sienaert noted that the Bank is recommending to the government to take additional measures with its bold reforms to secure the benefits from having taken those decisions.
