World Bank’s Country Director, Shubahm Chaudhuri has said that Nigeria’s decision to postpone the full deregulation of the downstream sector of the petroleum industry by 18 months may cost the country over N4tn in subsidy payments on petrol in 2022.
The World Bank Country Director, however, expressed that while the World Bank could come up with advice on subsidy removal, its role was certainly not to dictate as it had no ability to do such.
The Country Director stated that economical decisions cannot be made like political decisions. He added that despite the fact that the price of oil had gone up, the rise in global crude oil prices was not helping Nigeria that much.
Industry figures seen on Sunday showed that the price of Brent, the oil against which Nigeria’s oil is priced, was $118.11 per barrel at 5.06pm Nigerian time, as it traded at the same rate the preceding day.
Chaudhuri stated that the reason why the rising oil price was not helping Nigeria as anticipated, is as a result of the cost of the PMS subsidy is going up. So at $85 per barrel, the NNPC was projecting that the cost of the PMS subsidy will be around N180bn to N200bn per month. In January when crude oil prices had already gone up to $90, $93, it (subsidy) still went up to N250bn per month.
Chaudhuri, however, noted that the issue of subsidy removal was Nigeria’s and Nigerians’ choice, adding that there should be a consensus among the political elites that should be communicated and accepted by the public.
