World Bank has advised Nigeria to rethink its policy of making a provision of N4 trillion for petrol subsidy payments in the 2022 budget.
The advice comes after National Assembly approved the request of the President to earmark N4 trillion for petrol subsidy in 2022. Subsidy or under-recovery is the underpriced sale of premium motor spirit (PMS), better known as petrol.
The N4trillion budgetary allocation for petrol subsidy is more than 2021 Company Income Tax and Value Added Tax combined collection
According to Malpass, the provision of petrol subsidy in Nigeria is not targeted at those mostly in need. “Generalised subsidies have significant negatives. One is, they are expensive because they go to everyone. And they’re often taken–more by people with upper incomes than by people with lower incomes; they’re not targeted,” Malpass said.
