World Bank speaks on real pump price of petrol in Nigeria without subsidy

The World Bank has hinted that the Tinubu-led administration has partially reintroduced petrol subsidy payments.

According to Alex Sienaert, the global bank's lead economist for Nigeria, the current petrol price in Nigeria at 650 does not reflect a subsidy-free regime.

He made this known 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.

World Bank claims subsidy is back Punch reports that during Sienaert's presentation, he noted that based on the official naira exchange rate, petrol should sell for around N750 per litre and not the N650 currently being paid by Nigerians.

His words: "The current petrol prices are not fully cost-reflective, which signals The partial return of the subsidy”.

“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.”

World Bank advice to Nigerians

Sienaert also said that the bank recommends Nigeria's government take additional steps to safeguard the benefits of its bold reforms.

Since the federal government announced the removal of the petrol subsidy, concerns have been raised over the lack of correlation between pump prices in the country and international crude oil prices, as well as exchange rates.

At the event, Festus Osifo, the national president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), collaborated with the World Bank, noting that the federal government is still paying subsidies on petrol.