The World Bank has expressed concern over the current fuel prices in Nigeria, indicating that they are not in line with market conditions.
During the presentation of the Nigeria Development Update (NDU), December 2023 Edition, the World Bank’s lead economist for Nigeria, Alex Sienaert, suggested that Nigerians should pay approximately N750 per liter for petrol, stating that the current rate of around N650 per liter does not reflect the true cost.
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Sienaert highlighted the possibility of a partial return of the subsidy, given the observed mismatch between petrol prices and market conditions.
He noted that the liberalization process, occurring with parallel exchange rates, could result in even higher prices. These estimates were presented to provide insight into what cost-reflective pricing might entail.
Despite the removal of the petrol subsidy on June 1, 2023, the World Bank’s report projected potential savings of over N11 trillion by 2025.
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However, it cautioned that implicit fuel subsidies might persist due to petrol prices not fully adjusting to market factors.
The World Bank emphasized the need for transparency, particularly within the Nigeria National Petroleum Corporation (NNPC), calling for openness in disclosing oil revenues and ensuring accurate remittance to the Federation Account.
Additionally, the institution recommended regular posting of information on petrol pump pricing to enhance transparency in the industry.
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In response to the World Bank’s suggestions, some experts criticized the call for a fuel price increase, deeming it insensitive, particularly in the aftermath of the recent removal of the fuel subsidy.
As discussions on this matter unfold, the nation grapples with the need for a balanced approach that considers both economic viability and public sentiment.
