Nigerian Government Resumes Petrol Subsidy Payments, Says IMF

Abuja, Nigeria– The International Monetary Fund (IMF) has confirmed that the Nigerian government has reinstated the payment of subsidies on the premium motor spirit (PMS), commonly referred to as petrol.

During the weekend, the IMF released a statement regarding the conclusion of its Executive Board’s Post Financing Assessment with Nigeria. It raised concerns about the government’s decision to impose price caps on fuel at retail stations.

The global lender advised the administration of Mr Tinubu to completely stop the payment of subsidies on petrol to free funds to run the government.

After the removal of the petrol subsidy in May 2023, the pump price changed from N185 per litre to N40 per litre and then to N568 per litre at NNPC fuelling stations, while others currently sell above N600.

Meanwhile, Nigerian government had said the prices would fluctuate after subsidy removal from time to time but the pump price has remained steady despite the prices of crude oil in the global market going up and down.

IMF said the government has “capped retail fuel and electricity prices” ostensibly to “ease the impact of rapidly rising inflation on living conditions,” “thus partially reversing the fuel subsidy removal.”

“Fuel and electricity subsidies are costly, do not reach those that most need government support and should be phased out completely.”

The bank commended the government’s focus on revenue mobilization and digitalisation, saying this will improve public service delivery, safeguard fiscal sustainability and eliminate the need for CBN financing through ways and means, which have grown above N20 trillion.