Fuel Subsidy Return Could Push Naira to ₦4,000 to a Dollar, Oyedele Warns

By Maryanne Awuya

Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele has warned that even considering a return to petrol subsidy could trigger capital flight and push the naira towards ₦3,000, ₦3,500 or even ₦4,000 per dollar.

Oyedele gave the warning at the closing press briefing of the 2026 International Monetary Fund (IMF) and World Bank Annual Meetings in Bangkok, Thailand.

He said investors had repeatedly sought assurances that the Federal Government would not reverse its economic reforms, particularly as the country approaches another election cycle.

According to the minister, any indication that President Bola Tinubu’s administration was considering restoring the subsidy could undermine investor confidence, trigger capital flight, put pressure on the foreign exchange market and increase borrowing costs.

“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately,” Oyedele said.

He warned that a sharp depreciation of the naira would make fuel and imported goods more expensive, worsening the economic pressure on households.

“Airfares would struggle, the naira would come under severe pressure, potentially moving towards 3,000, 3,500 or even 4,000. The very fuel people want subsidised would become far more expensive in naira terms,” he said.

Oyedele added that capital flight could extend beyond foreign investors, as wealthy Nigerians, business owners and middle-class investors might also turn to dollars, further increasing demand for foreign exchange.

The minister also rejected suggestions that the Nigerian National Petroleum Company Limited’s temporary reduction in petrol retail margins amounted to a return to subsidy.

He described the 30-day measure as a commercial decision by NNPC to forgo its retail profit margin, rather than a subsidy funded by public resources.

PerSecondNews recalls that President Tinubu had announced the removal of petrol subsidy during his inauguration on May 29, 2023, declaring, “Subsidy is gone.”

The government has maintained that it will not reverse the policy, arguing that restoring blanket subsidies could place renewed pressure on public finances and undermine the economic reforms.