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.
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.
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.
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