Fuel Subsidy Return Could Push Naira to ₦4,000/$, Oyedele Warns

According to Vanguard, published on October 19, 2026, Finance Minister Taiwo Oyedele has cautioned that restoring petrol subsidies could trigger capital flight and put severe pressure on the naira, potentially driving the exchange rate to between ₦3,000 and ₦4,000 per dollar.

The minister issued the warning during a press briefing at the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, on Monday. His comments centred on the possible consequences of reversing the Federal Government’s economic reforms, particularly the removal of petrol subsidies.

Oyedele said investors remained concerned about whether Nigeria would maintain its current economic direction as the next election cycle approaches. He argued that uncertainty over the government’s commitment to its reforms could undermine confidence in the country’s financial markets.

He warned that even an indication that the administration of President Bola Tinubu was considering bringing back petrol subsidies could prompt investors to move their money elsewhere. Such a reaction, he explained, could weaken the naira and increase borrowing costs.

The finance minister also pointed to the possibility of domestic investors seeking protection against economic uncertainty. Business owners, wealthy Nigerians and middle-class investors could turn to the dollar, increasing demand for foreign exchange and placing additional pressure on the local currency.

A weaker naira could make imported goods more expensive, adding to the cost of living for households. Oyedele also cautioned that petrol could become more expensive in naira terms, undermining the intended benefit of restoring subsidies.

The minister further addressed the Nigerian National Petroleum Company Limited’s temporary reduction in petrol retail margins. He maintained that the move did not necessarily amount to a return to subsidy because it involved a commercial decision to reduce profit margins rather than a payment financed by public funds.

Nigeria’s petrol subsidy removal was announced by President Tinubu during his inauguration on May 29, 2023, at Eagle Square in Abuja. The policy marked a major change in the country’s approach to fuel pricing.

Oyedele’s warning highlights the potential risks he associates with reversing that decision. However, the exchange rate of ₦3,000 to ₦4,000 per dollar remains a scenario he described, not confirmation that the naira will reach those levels.