Nigeria Puts a Price on Restoring Petrol Subsidy: Over N20 Trillion a Year

Nigeria's Federal Government has rejected calls to restore petrol subsidy, with the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, telling a press briefing in Abuja on Thursday that the measure would cost more than N20 trillion a year.

The arithmetic is the argument. Oyedele said Nigeria consumes about 50 million litres of petrol daily, and that even selling at N500 per litre would leave the government covering more than N16 trillion annually. The N20 trillion figure is an estimate, not a budget line; the Centre for the Promotion of Private Enterprise arrived at a similar number using 50 million litres per day and a N1,050 per litre subsidy.

Oyedele warned that restoring the subsidy could push the exchange rate towards N3,000 to a dollar and petrol prices to at least N2,000 per litre.

Instead, the government points to tax relief for low-income earners, transport support that prioritises public transporters through an NNPC discount, negotiations for refiners and importers to absorb temporary cost increases, and a planned national strategic fuel reserve. How each would be funded, who qualifies for the transport discount, and when the reserve would be established remain unanswered.

The backdrop is a global energy shock. Petrol prices rose from about N830 to N1,400 per litre, with Brent crude above $100 per barrel and reduced shipping through the Strait of Hormuz.

Oyedele said subsidy removal released N15.8 trillion to the Federation Account between June 2023 and December 2025 — N5.4 trillion to the Federal Government and N10.4 trillion to state and local governments. That is the trade-off in plain terms: a broad subsidy would consume a large share of public resources, with salaries, pensions and public services exposed, while the alternative measures aim to cushion households and businesses without one.

- https://www.premiumtimesng.com/business/business-news/915535-fuel-subsidy-would-cost-nigeria-over-n20trn-yearly-minister.html - https://leadership.ng/no-return-to-petrol-subsidy-oyedele/ - https://businessday.ng/business-economy/article/fg-turns-to-tax-relief-transport-support-as-petrol-prices-climb/?amp - https://nannews.ng/fuel-price-surge-fg-moves-to-protect-nigerians-rejects-subsidy-return/ - https://www.arise.tv/taiwo-oyedele-subsidy-reforms-freed-n15-8trn-for-nigeria-in-30-months/ - https://dailytrust.com/bringing-back-subsidies-will-cost-nigeria-n20trn-annually-report/