The International Monetary Fund has advised Nigeria against restoring blanket petrol subsidy, urging the Federal Government to channel support towards vulnerable citizens as rising energy costs put pressure on households.
The Director of the IMF’s Fiscal Affairs Department, Rodrigo Valdés, gave the advice on Wednesday while responding to a question about calls for the return of petrol subsidy in Nigeria ahead of elections, during the IMF and World Bank Group annual meetings in Bangkok, Thailand.
Valdés acknowledged the political pressure governments face when fuel prices rise but said blanket subsidies were costly and that available resources would be better used to support people most affected by higher energy prices.
He said, “At the end of the day, it’s very tempting politically speaking because it’s not trivial the political effect of the price of oil, of fuels, of gasoline, of diesel.
“But you have to explain that this is a global shock, first. Second, that it’s very, very expensive for the country not to recognise that shock.
“And third, it’s much better to use some of that money that would you spend in the subsidies channeled towards more vulnerable people.”
