The Federal Government has ruled out a return to fuel subsidy and multiple foreign exchange rates, insisting it will not reverse economic reforms introduced under President Bola Tinubu.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, stated this on Saturday in response to concerns about the government’s economic policies ahead of the 2027 general elections.
Oyedele spoke on the sidelines of the World Bank and International Monetary Fund, IMF, meetings in Bangkok, Thailand.
He said the government remains committed to fuel subsidy removal and liberalisation of the foreign exchange market, despite repeated questions from rating agencies, investors and multilateral institutions about a possible reversal.
“And let me be clear as well, this was a recurring question almost through all our engagements, but also with the rating agencies, with the investors, and the multilateral institutions. Every time they ask, are you reversing your plans? Are you bringing back subsidies? Let me be clear, there will be no return to fuel subsidies or multiple exchange rates,” Oyedele said.
His comment comes amid renewed political debate over subsidy removal, with opposition figures proposing alternatives to ease hardship ahead of the 2027 polls.
Former Vice-President Atiku Abubakar of the African Democratic Congress, ADC, has proposed a subsidy arrangement linked to domestic production, including supply of crude to local refineries, and criticised the government’s recent 30-day petrol discount as short-term relief.
Peter Obi of the Nigeria Democratic Congress, NDC, has also argued that the reforms were implemented without adequate production-driven measures to cushion their impact.
The Tinubu administration has, however, defended both policies as necessary to address structural problems, maintaining that the former subsidy regime was unsustainable, prone to abuse and diversion of petrol to neighbouring countries, while multiple exchange rates encouraged arbitrage, corruption and depletion of foreign reserves.
President Tinubu announced subsidy removal at his inauguration in May 2023, a decision that ended decades of government intervention in petrol pricing and led to sharp increases in fuel and transport costs.
The foreign exchange reform that followed consolidated multiple windows into a market-driven system to improve transparency and reduce arbitrage.
Both reforms have drawn criticism from Nigerians grappling with rising food, transport and living costs, with labour unions and civil society groups staging protests over wage erosion.
Amid concerns, the government introduced a recent 30-day retail margin discount at NNPC stations, which some Nigerians interpreted as a return to subsidy.
Oyedele dismissed the interpretation, saying: “The recent 30-day retail margin discount… is a time-bound commercial decision by the NNPC to reduce margins and support Nigerians. It is not a subsidy paid from public funds.”