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 about ₦3,000 against the US dollar within months.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the warning on Thursday, October 8, 2026, during a press briefing in Abuja amid renewed calls for the return of fuel subsidy.
According to the minister, reinstating the subsidy could reduce government revenue, increase borrowing costs, trigger capital flight and put additional pressure on Nigeria’s foreign exchange reserves. These developments, he said, could weaken the naira and threaten recent progress in reducing inflation.
Oyedele argued that although fuel subsidy might provide temporary relief to consumers, its long-term financial implications could worsen economic challenges if the government failed to establish a sustainable funding mechanism.
He also estimated that restoring the subsidy could cost the country more than ₦20 trillion annually, placing significant pressure on public finances and potentially affecting spending on essential services such as healthcare, education, infrastructure and security.
The minister maintained that a subsidy does not reduce the actual cost of petroleum products but shifts part of the financial burden to the government, which must find the money to cover the difference.
Amid rising petrol prices and growing concerns over the cost of living, the government said it was considering alternative measures to cushion the impact on Nigerians.
These measures include a proposed 30-day petrol discount through Nigerian National Petroleum Company Limited (NNPC) stations, with priority for public transport operators, as well as negotiations aimed at placing a ceiling of ₦1,350 per litre on petrol’s landing or ex-gantry cost.
Oyedele said the government remained open to proposals for easing fuel costs but insisted that anyone advocating a return to subsidy should explain its total cost, how it would be funded sustainably and the pump price it would deliver.
The warning comes as Nigerians continue to face pressure from rising transportation costs, food prices and other living expenses.
The government’s projections are conditional estimates, not confirmation that petrol will rise to ₦2,000 per litre or that the dollar will reach ₦3,000. The actual outcome would depend on economic conditions, government policy, oil prices and developments in the foreign exchange market.