The Federal Government has warned that any attempt to restore petrol subsidy could erode the fiscal gains recorded under President Bola Tinubu’s economic reform agenda.
This was just as it asserted that the restoration could also undermine investor confidence and return Nigeria to the financial pressures that characterised the pre-reform era.
Minister of Information and National Orientation, Mohammed Idris, gave the warning in an Op-Ed titled, “Restoring Fuel Subsidy Will Reverse Nigeria’s Economic Gains.”
Tinubu announced the removal of petrol subsidy shortly after assuming office in May 2023, a decision that has remained one of the administration’s most consequential and controversial economic policies.
Idris argued that reversing the policy would recreate the fiscal distortions, fuel scarcity and arbitrage opportunities that made the subsidy regime increasingly difficult to sustain.
According to him, Nigeria’s experience in 2022 demonstrated the financial burden of the policy, with the country spending about $10 billion on fuel subsidies amid declining oil production and weak government revenues.
He cited warnings by the World Bank that the resources devoted to subsidising petrol could have been channelled into critical sectors such as education, healthcare, infrastructure and social protection.
The minister also pointed to figures contained in the Federal Government’s recently released “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” saying subsidy savings had released N15.8 trillion in resources for the Federation between June 2023 and December 2025.
Idris said the amount comprised about N5.43 trillion for the Federal Government, N6.52 trillion for state governments and N3.88 trillion for local governments.
He clarified that the N15.8 trillion did not represent a separate cash reserve but resources freed up within the broader fiscal system as a result of subsidy removal.
According to him, the additional fiscal space has enabled the different tiers of government to strengthen their capacity to meet salary and pension obligations while funding infrastructure, security, agriculture, human capital development and other public services.
He further disclosed that the Reform Scorecard recorded about N6.47 trillion in additional spending on strategic infrastructure, while more than N400 billion had been committed to major social investment programmes.
The programmes, he said, include the Nigeria Education Loan Fund, the MOFI Real Estate Investment Fund and CREDICORP, while social transfers have reached more than 10 million Nigerian households.
Idris, however, acknowledged that the government still bears substantial costs in other areas, noting that electricity subsidies alone were estimated at N3.14 trillion between June 2023 and December 2025.
He warned that bringing back petrol subsidy would therefore create another significant strain on government finances at a time when authorities are attempting to consolidate fiscal reforms.
The minister also challenged advocates of subsidy restoration to consider the trade-offs involved, asking whether scarce public resources should be redirected to subsidising petrol at the expense of student loans, consumer credit, infrastructure, security, healthcare, education and social protection.
He said the Organised Private Sector and other stakeholders in the economy had similarly cautioned against reversing the reforms.
“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” Idris said.
He urged Nigerians to assess the reforms from the perspective of their long-term implications, insisting that sustaining the changes was necessary to improve fiscal stability and build a more productive and resilient economy.
