The World Bank has urged President Buhari to remove petroleum subsidy now as the price of crude oil has declined drastically. The position of the World Bank was made known by the bank’s leader Economist, John Litwack at the launch of the new edition of Nigeria Economic Report, the World Bank’s Lead Economist.
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He said the best time to remove fuel subsidy is now when global crude oil price is at its lowest level, noting that the Bank foresaw continuous decline in global crude oil price.
“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. 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 said