The Federal Government has ruled out any return of fuel subsidy, despite growing public concern over the rising cost of living following its removal in 2023.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, reaffirmed the position on Tuesday in Paris, France, during a meeting between President Bola Tinubu and global investors.
Oyedele said the administration remains committed to its market-driven pricing policy, insisting that fuel subsidies create long-term economic distortions.
“We will not bring back fuel subsidy because it creates distortions for the economy, and we won’t introduce price control because we believe in the market,” he said.
He added that the government believes the economy is better served by allowing market forces to determine pricing, rather than reintroducing state intervention in petrol pricing.
Fuel subsidy was removed in May 2023, a policy shift that has since contributed to significant inflationary pressures across the economy. According to available data, Nigeria’s headline inflation rose sharply from 22.41 percent in May 2023 to 34.19 percent by June 2024.
The increase was driven largely by surging fuel, food, and transportation costs, which deepened the country’s cost-of-living crisis.
Food inflation also accelerated, exceeding 39 percent by October 2024, while transport costs reportedly rose by nearly 300 percent following subsidy removal and currency depreciation.
The government maintains that the reform was necessary to address long-standing fiscal inefficiencies and reduce economic distortions that had strained public finances for years.
Oyedele also noted that global developments, including geopolitical tensions affecting energy markets, could present new opportunities for Nigeria to attract investment and diversify its energy sector.
Despite public debate over the policy’s impact, the administration has continued to defend the subsidy removal as part of broader economic reforms aimed at stabilising the macroeconomic environment and encouraging private sector participation.
