Restoring fuel subsidy will erase Nigeria’s economic gains — Information Minister

By Precious Mark

The Minister of Information and National Orientation, Mohammed Idris, has cautioned against calls to restore the petrol subsidy, declaring that a return to the old price-capping regime would undermine Nigeria’s improving fiscal position, weaken investor confidence, and reverse gains from ongoing economic reforms.

The caution followed electoral promises by the presidential candidates of the African Action Congress (AAC) and the African Democratic Congress (ADC), Omoyele Sowore and Atiku Abubkar, to restore the fuel subsidy regime President Bola Ahmed Tinubu ended in 2023.

In a statement issued on Monday, Idris stressed that reintroducing the subsidy would recreate the severe fiscal distortions, artificial market scarcity, and arbitrage opportunities that originally rendered the policy unsustainable.

“Restoring subsidy would almost instantly return Nigeria to the economic conditions of 2022, recreating the same fiscal pressures, distortions, scarcity and incentives for arbitrage that made the old system unsustainable,” Idris stated.

Addressing proponents of the policy reversal, the Minister urged critics to consider the immediate trade-offs and opportunity costs confronting public finances.

“Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy, or preserve higher allocations to states and local governments? Do we restore subsidy, or continue funding roads, rail, power and security?” he asked.

Citing data from the Federal Government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” presented by the Minister of Finance and Coordinating Minister of the Economy, Dr. Taiwo Oyedele, Idris revealed that subsidy savings generated N15.8 trillion for the Federation between June 2023 and December 2025.

Breakdown of the figures indicates that N5.43 trillion accrued to the Federal Government, N6.52 trillion to state governments, and N3.88 trillion to local government councils.

The Minister clarified that the N15.8 trillion does not constitute a separate cash pool, but represents expanded fiscal space within the Federation Account that enabled states to meet salary and pension obligations while funding health, education, and infrastructure projects.

Idris further cautioned that with Nigeria already absorbing an electricity tariff subsidy estimated at N3.14 trillion between June 2023 and December 2025, adding a petrol subsidy burden would deal a severe blow to national finances.

“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” Idris concluded.