The Federal Government has warned that petrol prices could rise to ₦2,000 per litre if Nigeria brings back fuel subsidies. It also predicts that the naira could weaken to ₦3,000 against the dollar within months.
Finance Minister Taiwo Oyedele shared the projection during a press briefing in Abuja on Thursday. His warning comes amid ongoing debates over fuel prices and the rising cost of living.
FG Explains Possible Effects of Fuel Subsidy
According to Oyedele, restoring fuel subsidy could put serious pressure on Nigeria’s economy. He warned that the move could reduce government revenue and trigger a sovereign credit downgrade.
Consequently, the government might face higher borrowing costs, capital flight and declining foreign exchange reserves. These pressures could also weaken the naira and threaten recent progress in reducing inflation and interest rates.
“Our estimate is that the exchange rate could approach ₦3,000 to the dollar within months, and so-called subsidised petrol would cost at least ₦2,000 a litre. That is well above what Nigerians pay today,” he said.
Why FG Says Fuel Subsidy Could Cost More
Oyedele argued that fuel subsidy does not make petrol cheaper. Instead, it shifts the cost from consumers to government finances. He warned that the government might struggle to fund the policy without creating other financial problems.
“A subsidy does not lower the cost of fuel. It only changes how it is paid, and when,” he said.
He added that the government could eventually rely on unpaid salaries and pensions, higher taxes or money printing to cover the cost.
FG Demands Sustainable Alternatives
The minister described fuel subsidy as offering “short-term relief” while creating “long-term fragility.” He maintained that any proposal to restore the policy must explain its financial implications.
Oyedele said the government remained open to alternatives. However, supporters must clearly explain the total cost, a sustainable funding source and the expected petrol price.
For Nigerians already battling high living costs, the debate raises a major question: how can the government ease fuel costs without creating bigger economic problems?
