The Federal Government has warned that restoring petrol subsidy would undermine the economic reforms implemented under President Bola Ahmed Tinubu and return Nigeria to the fiscal pressures that made the policy unsustainable.
The Minister of Information and National Orientation, Mohammed Idris, issued the warning on Monday in an article titled “Restoring Fuel Subsidy Will Reverse Nigeria’s Economic Gains,” amid renewed political debate over the policy ahead of the 2027 presidential election.
Idris’s position followed a pledge by former Vice-President and African Democratic Congress presidential candidate, Atiku Abubakar, to restore petrol subsidy if elected president in 2027.
Atiku had questioned how the funds saved from subsidy removal had been utilised, arguing that Nigerians were yet to see sufficient benefits from the policy.
“I initially did not oppose the removal of the fuel subsidy. But now that it has been removed, where is the money? Where has the subsidy money gone?” Atiku said.
He added, “If I win the presidential election, I will restore the subsidy. And anyone who stole Nigeria’s subsidy funds must return the money.”
Idris, however, defended the removal of the subsidy, saying the previous regime had imposed a heavy burden on government finances and created economic distortions.
The minister recalled that Nigeria spent about $10bn on fuel subsidy in 2022, describing the arrangement as financially unsustainable.
He said the World Bank had previously warned that resources consumed by fuel subsidy could have been deployed to critical sectors such as education, healthcare, infrastructure and social protection.
According to Idris, figures contained in the Federal Government’s Reform Scorecard showed that subsidy savings generated N15.8tn for the Federation between June 2023 and December 2025.
He said the funds were distributed among the three tiers of government, with N5.43tn accruing to the Federal Government, N6.52tn to states and N3.88tn to local governments.
The minister said the additional resources had strengthened the ability of governments at different levels to finance salaries, pensions and essential public services.
He further disclosed that the reforms supported about N6.47tn in additional expenditure on strategic infrastructure, including roads, transportation, agriculture, housing and security projects.
Idris also cited social intervention programmes as part of the benefits of the reforms, saying more than 10 million households had benefited from social transfers.
He listed the Nigeria Education Loan Fund, the Mortgage Refinance Initiative and CREDICORP among programmes that had also received significant government funding.
The minister said progress in oil production, foreign reserves and domestic refining capacity could also be threatened if the government reversed the subsidy reform.
“Reversing policy now will undermine this progress and introduce fresh uncertainty for investors at precisely the time Nigeria should be consolidating domestic refining and strengthening energy security,” Idris said.
He warned that the Federal Government was already carrying a substantial electricity subsidy burden, estimated at N3.14tn between June 2023 and December 2025.
According to him, reintroducing petrol subsidy on top of the electricity subsidy would place additional pressure on public finances and potentially undermine the government’s ability to fund other priorities.
“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 in the first place,” Idris said.
The minister, however, acknowledged that the removal of petrol subsidy had imposed significant hardship on Nigerians, particularly through increased transportation and living costs.
He argued that the challenges associated with the reform should be addressed by expanding the benefits of the reforms rather than returning to the previous subsidy regime.
“We are not claiming that the reforms have solved all of Nigeria’s economic challenges; there is indeed still much work to be done to translate improved fiscal capacity into better services, jobs, infrastructure and living standards,” he said.
Idris maintained that government should focus on using the additional fiscal resources generated by the reforms to improve the living conditions of Nigerians.
“The proper response to the hardship associated with reform is not to dismantle the reform; it is to accelerate the benefits,” the minister said.
He also challenged Nigerians to consider the opportunity cost of returning to petrol subsidy, particularly whether government resources should be redirected from student loans, infrastructure, healthcare, education and social protection to subsidise petrol consumption.
“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” Idris stated.
The renewed disagreement over petrol subsidy is likely to become a major issue in the 2027 presidential campaign, with opposition politicians questioning the impact of the reform on ordinary Nigerians and the Federal Government defending its economic rationale.
Atiku’s promise to restore the subsidy has therefore opened another front in the political debate over the direction of Nigeria’s economy, particularly on how government should balance fiscal sustainability with the rising cost of living.
The Tinubu administration has maintained that subsidy removal was necessary to free public resources for development and reduce the distortions associated with the former regime.
Critics, however, have continued to argue that the economic benefits claimed by the government have not sufficiently translated into improved living standards for millions of Nigerians facing high food, transportation and energy costs.
West Trybe reports that the petrol subsidy debate is emerging as one of the major economic issues likely to shape the 2027 presidential election. While the Federal Government is urging Nigerians to maintain the reform and maximise the fiscal space it has created, Atiku has positioned subsidy restoration as part of his proposed alternative economic policy.
