Mohammed Shosanya
Nigeria will witness partial return of fuel subsidy on account of the non cost-reflective nature of the current petrol prices in the country.
Alex Sienaert, the bank’s lead economist for Nigeria, disclosed this during his presentation of the Nigeria development update report, the December 2023 edition.
The report, titled, ‘Turning The Corner (From Reforms and Renewed Hope to Results)” was presented on Wednesday in Abuja.
According to the official exchange rate,the product should sell for around N750 per litre and not the N650 currently being paid by Nigerians,he said.
He added:“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 foreign exchange 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.”
According to him,the bank is recommending that Nigeria’s government should take additional steps to safeguard the benefits of its bold reforms.
