Bringing back Nigeria's fuel subsidy would cost over ₦20 trillion a year, finance minister says
Taiwo Oyedele warns that a return to the subsidy could push the naira towards ₦3,000 to the dollar. The government says it will offer targeted relief instead.
Abuja — Restoring Nigeria's petrol subsidy would cost the country more than ₦20 trillion a year, the finance minister, Taiwo Oyedele, said in Abuja on Thursday, Premium Times reports.
Oyedele, who is also coordinating minister of the economy, said a return to the subsidy could push the exchange rate towards ₦3,000 to the dollar and petrol to at least ₦2,000 a litre. Petrol currently sells for about ₦1,400 a litre.
The arithmetic
Nigeria consumes about 50 million litres of petrol a day, the minister said. Even a proposal to cap the pump price at ₦500 a litre would cost more than ₦16 trillion a year.
He said the removal of the subsidy in 2023 saved ₦15.8 trillion between June 2023 and December 2025, and that ₦10.4 trillion of that went to state and local governments. The government has also given up ₦3.3 trillion in taxes and duties on petrol in the year to 30 September 2026.
Targeted relief instead
The government rejects a blanket subsidy. Oyedele pointed instead to a set of narrower measures: a 30-day discount from the state oil company NNPC, a proposed ceiling of ₦1,350 a litre at the depot gate, cash transfers, subsidised credit and the wider use of compressed natural gas for vehicles.
The subsidy, which for decades kept petrol cheap in Africa's largest oil producer, was scrapped in 2023. The debate over bringing it back has returned as the cost of living weighs on households and the 2027 elections approach.
This report is based on reporting by Premium Times.
