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Fuel Subsidy Return May Cost Nigeria ₦19trn Yearly – CPPE
The Centre for the Promotion of Private Enterprise (CPPE) has warned that reinstating a universal petrol subsidy could cost Nigeria about ₦19.16 trillion annually, creating severe fiscal and economic risks.
CPPE CEO Dr. Muda Yusuf said in a policy brief that the estimate was based on daily consumption of 50 million litres and a subsidy requirement of ₦1,050 per litre, translating to ₦52.5bn daily and ₦1.575tn monthly.
He cautioned that such expenditure would crowd out funding for infrastructure, education, healthcare, security and agriculture, while widening deficits and increasing debt-service pressures.
“Restoring the old subsidy regime could replace the current energy-price challenge with a much larger fiscal, debt, foreign-exchange and investment problem,” Yusuf said.
The think tank argued that higher borrowing would weaken private-sector credit, sustain high interest rates and erode competitiveness. Instead, CPPE urged government to channel fiscal gains from subsidy removal into visible welfare improvements.
Yusuf said citizens must see benefits through improved public transport, electricity, healthcare, education, food security and support for MSMEs. He stressed that targeted relief, not universal subsidy, was the appropriate response to rising fuel costs.
He noted that petrol sold for ₦774–₦800 per litre before the recent global energy shock, but rose above ₦1,300 as crude prices surged amid the Middle East crisis. He said it was wrong to attribute the entire increase to subsidy removal.
CPPE maintained that subsidy removal had improved domestic refining viability and boosted government revenues. Yusuf concluded: “The appropriate policy direction is to preserve downstream petroleum reforms while aggressively mitigating their social and economic costs.”