IMF warns Nigeria against bringing back petrol subsidies

Summary

The IMF has urged Nigeria not to restore blanket petrol subsidies and to focus support on vulnerable households instead.

Highlights

• Rodrigo Valdés of the IMF’s Fiscal Affairs Department gave the warning at the IMF and World Bank annual meetings in Bangkok.
• He said broad fuel subsidies are politically tempting but expensive for public finances.
• The IMF said limited public resources would be better directed toward households most affected by higher energy costs.
• Valdés suggested transport support could be a better alternative than a blanket subsidy for everyone.