‘Subsidy Is Gone’ – FG Dismisses World Bank’s Claims

The Federal Government has refuted World Bank accusations that the government is still subsidising petrol, claiming that the period of petrol subsidies is “gone for good.”

Mohammed Idris, Minister of Information and National Orientation, said in an interview on Channels TV on Thursday, December 14, that President Bola Tinubu made it clear from his first day in office that his government would discontinue paying petrol subsidies.

According to the minister, the withdrawal of subsidies resulted in higher revenue to the federal account.

Subsidies are no longer available, and President Buhari promised Nigerians on his first day in office that there would be no subsidies (on petrol). We now have so much money available for the government to do so many things because of the elimination of subsidies. Of course, it’s never enough, but the fuel subsidy is gone for forever.

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

The FG’s reaction comes after the World Bank suggested on Wednesday that Nigeria’s current fuel prices are not cost-effective and that the Federal Government may still be subsidising petrol.

According to the bank, Nigerians should spend around N750 per litre, up from the current price of N650 in various regions of the country.

During his presentation of the Nigeria Development Update (NDU), December 2023 Edition in Abuja on Wednesday, the World Bank’s senior economist for Nigeria, Alex Sienaert, argued that there was still a subsidy on petrol.

He stated, “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.”