IMF advises Nigeria against restoring blanket petrol subsidy

The International Monetary Fund (IMF) has advised Nigeria against reinstating a blanket petrol subsidy, urging the government to channel support towards vulnerable citizens amidst rising energy costs. IMF's Director of the Fiscal Affairs Department, Rodrigo Valdés, highlighted that while politicians may find it tempting to offer blanket subsidies due to their political impact, it is costly for the country and better to use the funds to support those most affected by higher energy prices.

He suggested targeted assistance, such as subsidising bus fees, as a more effective policy than keeping fuel prices artificially low for all consumers. Valdés also cautioned that fuel subsidies can exacerbate global energy pressures by preventing demand from adjusting when supplies are constrained.

Brief written by urgent.news from Punch Nigeria's own syndicated text. Machine-written — may contain errors; check the original before relying on it.