Why Petrol Price Should Be N750 Per Litre – World Bank

Why Petrol Price Should Be N750 Per Litre – World Bank

The World Bank has indicated that the Federal Government of Nigeria might still be shouldering the burden of fuel subsidy, as the current fuel prices do not reflect the actual cost in the country.

According to Alex Sienaert, the bank’s Lead Economist for Nigeria, the price of petrol should be approximately N750 per litre, which is higher than the current rate of N650 per litre paid by Nigerians.

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He made this revelation during the presentation of the Nigeria Development Update, December 2023 edition titled, ‘Turning The Corner (from reforms and renewed hope, to results),’ held on Wednesday in Abuja.

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Sienaert emphasized that, based on the official exchange rate, the appropriate cost of fuel should be N750 per litre.

He 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 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.”