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

According to Punch News report Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that restoring petrol subsidies could trigger massive capital flight and weaken the naira to between ₦3,000 and ₦4,000 against the US dollar.

Oyedele gave the warning on Monday during a press briefing at the 2026 International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand.

He said investors had repeatedly questioned whether the Federal Government would reverse its economic reforms as Nigeria approaches another election cycle.

According to the minister, any indication that President Bola Tinubu’s administration was considering reinstating petrol subsidies could immediately undermine investor confidence and trigger reactions in domestic and international financial markets.

Oyedele explained that investors might withdraw their funds from Nigeria or move their wealth into foreign currencies to protect their assets against possible economic instability.

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

He warned that capital flight would increase demand for foreign exchange, putting further pressure on the naira and making imported goods more expensive.

The minister added that a weaker currency could worsen the cost of living, with ordinary Nigerians likely to bear the consequences through higher prices for essential commodities and services.

Oyedele also argued that restoring subsidies would not necessarily make petrol cheaper in the long term, as the resulting pressure on the exchange rate could increase the naira cost of imported fuel.

He rejected suggestions that the Federal Government’s recent temporary reduction in petrol retail margins amounted to a return of subsidies. According to him, the measure was a commercial decision by the Nigerian National Petroleum Company Limited to reduce its profit margin and provide temporary relief to consumers.

The government removed petrol subsidies in May 2023, shortly after Tinubu assumed office, as part of broader economic reforms aimed at reducing public expenditure and changing the country’s foreign exchange arrangements.

Although the government has defended the reforms as necessary for long-term economic stability, rising petrol prices and living costs have fuelled calls for renewed government intervention.

Oyedele maintained that the administration would not reverse its policy, warning that a return to subsidies could undermine the economic gains the government says it has achieved.