FG Speaks On Removing Fuel Subsidy After World Bank’s Claim

The Federal Government has countered the World Bank’s claim, asserting the end of petrol subsidies as a firm policy decision.

Information Minister, Mohammed Idris highlighted President Bola Tinubu’s stance against petrol subsidies from the outset of his administration.

Idris noted that eliminating the subsidy led to a rise in revenues for the federation.

Despite government claims, the World Bank maintained that Nigeria’s current fuel prices suggest ongoing subsidies.

The World Bank argues that the true cost of petrol should be around N750 per litre, contrasting with the lower prices seen in Nigeria.

The World Bank’s lead economist for Nigeria, Alex Sienaert, during his presentation of the Nigeria Development Update (NDU), December 2023 Edition in Abuja on Wednesday, 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 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 Minister of Information, however, said, “Subsidy is gone, and the President told Nigerians from his first day in office that there won’t be subsidy (on petrol). It is because subsidy has gone that we have so much money available for the government to do so many things. Of course, it’s never enough, but fuel subsidy is gone and it’s gone for good.

“There are instances where the government needs to come in to see that things don’t go so bad. That’s the responsibility of the government. Every rule will also have its self-adjusting mechanism, but I can assure Nigerians that the subsidy is gone.

“If you look at the monies accruing to the federation account and the kind of money the states are receiving, you would know that everybody desires that subsidy should go. What do we do with that subsidy, I think, is the next question. We need to scrutinise that so that Nigerians would have the benefit of the subsidy that has been taken away. Subsidy is gone.”