Business Post Contributor
By Bliss Okperan
The World Bank has said the average pump price of premium motor spirit (PMS), otherwise known as petrol, should be N750 per litre in Nigeria.
The global lenders’ Lead Economist for Nigeria, Mr Alex Sienaert, said Nigerians should not be paying the current pump price of between N568 and N650 per litre, depending on the location.
Speaking during the presentation of the Nigeria Development Update for December 2023 titled Turing the Corner (from Reforms and Renewed Hope, to Results) in Abuja on Wednesday, Mr Sienaert said the bank has advised the Nigerian government to take additional measures with its bold reforms to secure the benefits from having taken those decisions.
According to him, the federal government may still be paying for fuel subsidy, considering that fuel prices are currently not cost-reflective in the country.
“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 assume that importation is done at the official FX rate,” he said.
“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,” he added, noting that, “We think the price of petrol should be around N750 per litre more than the N650 per litre currently paid by Nigerians.”
Recall that on May 29, 2023, President Bola Tinubu, when he was sworn in as Nigeria’s President, announced an end to fuel subsidy, pushing the price of petrol from N165 per litre to the current price.
