The World Bank in Abuja on Monday asked the Nigerian government to step up efforts at eliminating Premium Motor Spirit (PMS) otherwise called petrol price manipulation, calling for a forensic audit of the Nigerian National Petroleum Company Limited (NNPCL) to improve transparency in the country’s oil and gas sector.
World Bank’s Country Director for Nigeria, Taimur Samad at event said Nigeria’s macroeconomic situation is improving.
The recommendations are contained in the latest Nigeria Development Update (NDU) report released by the institution, which outlined a series of fiscal policy reforms necessary for macroeconomic stabilisation in Nigeria.
The World Bank insisted that there is a need to maintain deregulation of the downstream petrol market and to prevent dominant players from influencing pump prices.
To sustain gains from the removal of the petrol subsidy, the Bank recommended that the government must “ensure the PMS market remains de-regularised” and “strengthen antitrust measures to ensure no market players can manipulate prices.”
The report also called for the complete elimination of the foreign exchange (FX) subsidy, urging the Central Bank of Nigeria to ensure that all FX-related transactions are conducted strictly at market-determined rates.
On electricity, the Bank advised the federal government to settle existing subsidy arrears while adopting cost-reflective tariffs, complemented by a universal subsidy to protect vulnerable consumers.
To strengthen fiscal performance, the World Bank proposed enhanced tax administration, including the adoption of e-invoicing and improved tax audits, as well as reforms to the Value Added Tax (VAT) regime.
It stated that there is a need for greater transparency in oil revenues, adding that savings from subsidy removal must flow directly to the Federation Account.
It also recommended a forensic audit of the NNPCL to address opacity and inefficiencies in the national oil company.
The Bank emphasised the importance of improving budget credibility by adopting realistic assumptions and publishing the Federal Government’s budget and Medium-Term Expenditure Framework (MTEF) in accessible formats.
To reduce the cost of governance, it advised cutting non-essential spending such as the purchase of vehicles and overseas training, and lowering the cost of revenue collection by key government agencies like the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and regulators in the oil sector.