Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that restoring the petrol subsidy — or even signalling that the government is considering it — could trigger capital flight and drive the naira as low as ₦4,000 to the dollar.
He said investors, both foreign and domestic, would react immediately to any suggestion of policy reversal.
“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately,” Oyedele stated.
“Airfares would struggle, the naira would come under severe pressure, potentially moving towards 3,000, 3,500 or even 4,000. The very fuel people want subsidised would become far more expensive in naira terms.”
The minister explained that capital flight would not be limited to foreign investors. Wealthy Nigerians, business owners and members of the middle class could also shift their savings into dollars, further increasing demand for foreign exchange and intensifying pressure on the local currency.
He compared the potential fallout to recent market turbulence in Indonesia, describing the impact on Nigeria as far more severe if the subsidy were restored. According to Oyedele, a weaker naira would raise the cost of imported goods, including petrol itself, defeating the purpose of any subsidy intended to ease living costs.
The warning comes amid ongoing public debate over rising fuel prices following the removal of the subsidy in May 2023. Oyedele has previously projected that a return to the subsidy regime could push the exchange rate towards ₦3,000 per dollar within months and drive so-called subsidised petrol to at least ₦2,000 per litre — higher than current pump prices.
He stressed that the Federal Government remains committed to the economic reforms introduced under President Bola Tinubu, noting that markets have largely priced in policy continuity despite the approach of the next election cycle.
Subsidy removal, he has said in earlier briefings, released about ₦15.8 trillion into the Federation Account between June 2023 and December 2025, with a significant portion shared with state and local governments.
Oyedele’s latest comments underscore the administration’s firm stance against reversing the fuel subsidy policy, warning that doing so would reverse hard-won gains in fiscal stability and investor confidence.
About the Author
