Federal Government warns reviving fuel subsidy could push petrol to ₦2,000 per litre and naira to ₦3,000 per dollar

The Federal Government has defended its choice to remove fuel subsidies, cautioning that bringing the policy back would create major economic turmoil, with petrol prices exceeding ₦2,000 per litre and the exchange rate nearing ₦3,000 for one US dollar. During a press briefing in Abuja on Thursday, October 8, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, spoke about fuel pricing and public pressure to restore subsidies. He warned that a return to subsidy payments would undermine fiscal gains. "Return subsidy, and the sequence is familiar. Weaker revenues invite a sovereign credit downgrade. As the rating agencies themselves have already signalled, and you can read all their reports, that would put at risk the upgrade we have recently earned, including our first from S&P in 14 years," Oyedele stated. "Borrowing becomes costlier, capital leaves, reserves fall, naira weakens. The progress on inflation, which has allowed the central bank to begin lowering interest rates, will be put at risk. Our estimate is that the exchange rate could approach ₦3,000 per dollar within months. And the so-called subsidised petrol will cost at least ₦2,000 per litre. This is well above what Nigerians pay today." Oyedele stressed that any restored subsidy would in the end be paid for through inflationary fiscal steps, delayed government earnings, or higher taxes. "However, it is described, a subsidy must be financed through salaries and pensions not paid on time, through higher taxes, or through the printing of money, like we saw before this current administration. Over 30 trillion naira was printed. That's inflation we're dealing with. It wasn't even just about the reform. Each of these has done great harm before," Oyedele added. "Short-term relief, but with long-term fragility, is the most expensive money a government can spend." Responding to critics who want subsidised pricing restored more than three years after President Bola Tinubu announced the end of the regime, the minister urged them to present workable, mathematically credible alternatives. "We remain open to ideas, but any credible proposer should answer three questions. Number one, what will it cost? Number two, how will it be funded sustainably? Number three, what pump price will it deliver? We will engage in good faith with any proposer that shows its arithmetic," Oyedele declared.