The Centre for the Promotion of Private Enterprise (CPPE) has warned that restoring a universal petrol subsidy could expose Nigeria to an estimated ₦19.16 trillion in annual fiscal costs, urging the Federal Government to maintain downstream petroleum sector reforms and focus instead on targeted relief for households and businesses.
The CPPE, in a policy brief signed by its Chief Executive Officer, Dr. Muda Yusuf, said the estimated cost was based on petrol consumption of 50 million litres per day and an indicative subsidy requirement of ₦1,050 per litre.
According to the projection, the subsidy could cost about ₦52.5 billion daily and ₦1.575 trillion monthly, translating to approximately ₦19.16 trillion annually.
The organisation noted, however, that the figure could vary depending on actual petrol consumption, crude oil prices, exchange rates, refining or landing costs, and the regulated pump price.
It added that consumption could also rise under a subsidy regime as renewed price differentials encourage cross-border diversion and arbitrage.
CPPE argued that returning to the former subsidy model would recreate several challenges that prompted the reform, including fiscal leakages, foreign exchange pressure, smuggling, pricing distortions, and uncertainty for investors.
According to the group, an annual subsidy bill approaching ₦20 trillion would create a significant opportunity cost, competing directly with government spending on infrastructure, education, healthcare, security, agriculture, and social protection.
It further warned that increased government borrowing to finance such expenditure could deepen fiscal deficits and debt-service pressures while potentially crowding out private-sector credit and sustaining high interest rates.
“Restoring a universal petrol subsidy would recreate many of the problems the reform sought to address,” the CPPE said.
While acknowledging that rising petrol prices were increasing transportation, logistics, and production costs while weakening household purchasing power and squeezing micro, small, and medium-sized enterprises (MSMEs), the private-sector policy group maintained that the response should not be a return to universal subsidies.
Instead, the CPPE called for targeted measures, including expanded mass transit, rail freight and logistics infrastructure, improved electricity supply, accelerated adoption of compressed natural gas (CNG) and distributed energy solutions, stronger food production, and targeted social protection.
It also urged the government to reduce energy, logistics, and financing costs for productive enterprises while maintaining a predictable, market-oriented framework capable of attracting investment into domestic refining.
The CPPE stated that fiscal resources generated following subsidy removal should be more visibly reflected in public transportation, electricity, healthcare, education, food security, infrastructure, and social protection, adding that federal, state, and local governments should be transparent about how additional revenues are utilized.