The advice was given on Tuesday, December 8, 2015, by the World Bank’s Lead Economist, John Litwack at the launch of the new edition of Nigeria Economic Report.
The World Bank has urged President Muhammadu Buhari to remove the subsidy on fuel in Nigeria.
The advice was given on Tuesday, December 8, 2015, by the World Bank’s Lead Economist, John Litwack at the launch of the new edition of Nigeria Economic Report, according to Vanguard.
Litwack said further that removing the subsidy immediately would be Nigeria’s best bet due to the low price of crude oil.
“The fuel subsidy appears to have vast modest benefits for the majority of citizens, but the costs are quite high. There is a strong tendency for the cost of fuel subsidy to increase over time as increasing domestic demand for petrol outpaces growth in oil output or revenues,” Litwack said.
“The $35 billion cost of fuel subsidy during 2010 – 2014 was one of the reasons Nigeria was unable to accumulate a fiscal reserve in the Excess Crude Account that could have protected the country from the recent oil price shock,” he added.
He also said that scrapping the subsidy now would not push the pump price of petrol above N100 per litre.
The Nigerian government had attempted to scrap the subsidy in January 2012 but the move was met with protests which practically shut down the country.
See Pulse Photo-News gallery: