Victor Ezeja
AdminThe World Bank has revealed that premium motor spirit, otherwise known as petrol, should be priced in Nigeria at N750 per litre at the pumps unless the government is paying some form of subsidy on the product.
The bank’s Lead Economist for Nigeria, Alex Sienaert, stated this in Abuja on Wednesday while presenting the Nigeria Development Update, December 2023 edition, titled ‘Turning The Corner (from reforms and renewed hope, to results)’.
Join our WhatsApp ChannelPrime Business Africa recalls that months after President Bola Tinubu declared in his inauguration day address that fuel subsidy is gone, National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo revealed that the Federal Government is still paying subsidy on petroleum.
“In reality today, there is subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around $80 for a barrel. But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price [of petroleum] also needed to move,” the unionist had said in October.
Sienaert is now insinuating that the Federal Government may still be paying for fuel subsidy, given that fuel prices are currently not cost-reflective in the country.
According to him, “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.”
The World Bank lead economist further disclosed that the institution is recommending that the Nigerian government takes additional measures to secure the benefits from having taken the benefits of its bold reforms.
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