Fuel Subsidy: Returning to Old Regime Will Reverse Nigeria’s Economic Gains — Idris

The Minister of Information and National Orientation, Mohammed Idris, has warned against calls for the restoration of petrol subsidy, saying such a move could undermine Nigeria’s improving fiscal position and weaken investor confidence.

Idris said returning to the former subsidy regime could also reverse the economic gains recorded under the reforms of President Bola Tinubu’s administration.

The minister stated this in an opinion article published in some national newspapers on Monday, titled “Restoring Fuel Subsidy Will Reverse Nigeria’s Economic Gains.”

In a statement issued in Abuja by his Media Aide, Rabiu Ibrahim, Idris outlined the fiscal benefits of subsidy removal and the potential economic consequences of reversing the policy.

He warned that restoring the subsidy could recreate the fiscal pressures, market distortions, fuel scarcity and incentives for arbitrage that contributed to the collapse of the previous system.

“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,” he said.

The minister also urged proponents of subsidy restoration to consider the opportunity costs of such a decision, particularly its potential impact on funding for education, infrastructure, healthcare, security and social protection.

“Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy, or preserve higher allocations to states and local governments?” he asked.

Idris recalled that Nigeria spent about $10 billion on fuel subsidies in 2022, at a time when oil production and government revenues were declining.

He cited World Bank warnings that the subsidy was diverting resources that could otherwise have been invested in education, healthcare, infrastructure and social protection.

According to him, figures contained in the Federal Government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented” showed that subsidy savings mobilised N15.8 trillion for the Federation between June 2023 and December 2025.

He said about N5.43 trillion accrued to the Federal Government, N6.52 trillion to state governments and N3.88 trillion to local governments.

Idris clarified that the N15.8 trillion represented resources released within the wider fiscal system of the Federation and was not a separate pool of cash.

He said the additional fiscal space had strengthened the ability of state and local governments to meet salary and pension obligations while supporting investments in infrastructure, security, agriculture and human capital development.

The minister said the Reform Scorecard also recorded about N6.47 trillion in additional spending on strategic infrastructure and more than N400 billion committed to major social investment initiatives, including the Nigeria Education Loan Fund (NELFUND), MOFI Real Estate Investment Fund (MREIF) and CREDICORP.

He added that social transfers had reached more than 10 million Nigerian households.

Idris, however, noted that the government was still bearing a significant electricity subsidy, estimated at N3.14 trillion between June 2023 and December 2025.

He warned that reintroducing petrol subsidy would place further pressure on public finances.

The minister said the Organised Private Sector and other stakeholders in the economy had also cautioned against reversing the ongoing reforms.

“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” Idris said.

He urged Nigerians to assess the reforms from the perspective of long-term economic stability and the need to build a stronger, more productive and sustainable economy.