Mohammed Idris says restoring petrol subsidy could reopen fiscal pressures, weaken investor confidence and reverse reforms that have freed up ₦15.8 trillion for Nigeria’s three tiers of government…..
The Federal Government has pushed back against growing calls for the return of petrol subsidies, warning that reversing the policy could undo some of the fiscal and economic gains recorded since the subsidy regime was scrapped in 2023.
Minister of Information and National Orientation, Mohammed Idris, said bringing back the subsidy would recreate many of the financial pressures, market distortions and supply problems that made the former system increasingly difficult to sustain.
President Bola Tinubu ended the petrol subsidy regime shortly after assuming office in May 2023, making the policy one of the administration’s most significant economic reforms.
In an opinion article published on Monday, August 24, titled “Restoring Fuel Subsidy Will Reverse Nigeria’s Economic Gains,” Idris argued that returning to the old system would carry significant opportunity costs for the country.
“Restoring subsidy would almost instantly return Nigeria to the economic conditions of 2022,” the minister said, arguing that the policy could bring back the fiscal pressures, scarcity and arbitrage associated with the previous regime.
According to Idris, the financial impact of subsidy removal is already reflected in the additional resources available to the three tiers of government.
Citing the Federal Government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” he said subsidy savings generated between June 2023 and December 2025 amounted to ₦15.8 trillion in resources mobilised for the Federation.
The amount comprised approximately:
₦5.43 trillion for the Federal Government
₦6.52 trillion for state governments
₦3.88 trillion for local governments
Idris clarified that the ₦15.8 trillion should not be interpreted as a separate pool of cash sitting in government accounts. Rather, it represents resources released into the wider fiscal system as the government stopped financing petrol subsidies.
He said the additional fiscal space has improved the ability of states and local governments to meet salary and pension obligations while also supporting spending on essential services.
The minister also pointed to increased spending on infrastructure and social programmes as evidence of how the additional fiscal space has been deployed.
He said the Reform Scorecard recorded approximately ₦6.47 trillion in additional expenditure on strategic infrastructure.
More than ₦400 billion was also committed to major social investment initiatives, including NELFUND, the MOFI Real Estate Investment Fund, MREIF and CREDICORP.
According to Idris, social transfers have also reached more than 10 million Nigerian households.
The minister argued that restoring petrol subsidies would therefore force the government to make difficult choices about where scarce public resources should go.
“Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians?” he asked.
He similarly questioned whether Nigeria should restore the subsidy at the expense of allocations to states and local governments or continued investment in roads, rail, power, security, healthcare, education and social protection.
Nigeria spent about $10bn on fuel subsidy in 2022
Idris recalled the scale of government spending under the former subsidy regime, particularly in 2022 when Nigeria was dealing with declining oil production and weaker revenues.
According to him, the country spent approximately $10 billion on fuel subsidies that year.
He cited previous warnings from the World Bank that the subsidy was absorbing resources that could otherwise have been directed towards critical areas such as healthcare, education, infrastructure and social protection.
The minister’s argument is that the fiscal challenge has not disappeared and that reintroducing another major fuel subsidy could place additional pressure on government finances.
Electricity subsidy already costs trillions
The government is also dealing with another major subsidy burden.
Idris said Nigeria’s electricity subsidy was estimated at ₦3.14 trillion between June 2023 and December 2025.
Against that backdrop, he warned that adding a petrol subsidy to the government’s existing obligations would further constrain public finances.
The concern is particularly significant because the government would potentially have to finance the petrol subsidy at a time when it is also seeking to increase spending on infrastructure, social programmes and other development priorities.
Minister warns against returning to old economic model
Idris said the Organised Private Sector and other members of the economic community had also expressed concerns about reversing the reform.
He maintained that the subsidy regime was not simply a question of making petrol cheaper at the pump, but also involved the broader economic cost of directing large amounts of public money towards keeping fuel prices below market levels.
“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” he said.
The minister urged Nigerians to assess the reforms from a longer-term perspective, arguing that the immediate difficulties associated with subsidy removal must be weighed against the government’s stated objective of creating a more sustainable fiscal framework.
His comments come as the debate over petrol prices and the cost of living remains a major issue for households and businesses, with some political figures and groups increasingly calling for government intervention to ease the burden on consumers.
For the Tinubu administration, however, the latest warning signals that it remains firmly opposed to reversing one of its flagship economic reforms, despite continued public pressure over the impact of fuel prices on living costs.
