The Federal Government has warned that restoring petrol subsidy could push the price of petrol to at least ₦2,000 per litre and weaken the naira to approximately ₦3,000 against the dollar within months.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the warning on Thursday during a briefing in Abuja on rising petrol prices and renewed calls for the return of fuel subsidy. He described the figures as the government’s projections of the possible consequences of reversing the policy, rather than guaranteed outcomes. 

Oyedele said bringing back the subsidy could reduce government revenue and increase pressure on Nigeria’s public finances. According to him, weaker revenue could expose the country to a credit rating downgrade, raise borrowing costs and encourage capital outflows, potentially reducing foreign exchange reserves and weakening the naira.

The minister also warned that such developments could undermine recent progress in controlling inflation and reducing interest rates. He argued that while subsidy might offer temporary relief to consumers, the cost would ultimately have to be financed through government revenue, additional taxes, borrowing or other funding measures.

Oyedele challenged supporters of subsidy restoration to provide clear estimates of its cost, explain how it would be sustainably funded and state the petrol price Nigerians could expect to pay. He maintained that the government was open to alternative proposals but said they must be supported by credible calculations.

As part of efforts to cushion the impact of rising fuel prices, the government has also announced a 30-day discount on petrol sold through Nigerian National Petroleum Company Limited stations, with priority for public transport operators. Oyedele described the arrangement as selling at cost rather than a return to the former subsidy system. 

The subsidy debate continues more than three years after President Bola Tinubu announced the policy’s removal in May 2023. The decision has remained a major public concern amid rising transport fares, living expenses and pressure on households and businesses.

The government’s warning has placed the potential economic consequences of subsidy restoration at the centre of the debate. However, the projected petrol price of ₦2,000 per litre and exchange rate of ₦3,000 to the dollar are conditional estimates made by the minister; neither figure represents a confirmed future price or exchange rate.