The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that any return to the petrol subsidy could trigger capital flight, erode investor confidence and push the naira to as weak as N4,000 per dollar.
Oyedele spoke at a press briefing on the sidelines of the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, on Monday.
He said investors had repeatedly asked whether the government would abandon its reforms ahead of the next election cycle, but ruled out any reversal.
According to him, even a signal that the Tinubu administration is considering reinstating the subsidy would immediately hit financial markets, raise borrowing costs and worsen pressure on households.
“In all the meetings I have had, I came to a conclusion that the markets, including the domestic market, which you can read from the capital market, and the international market, have largely written off the opposition in Nigeria as being unserious,” he said.
“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately. Air fares would struggle, the naira would come under severe pressure, potentially moving towards N3,000, N3,500 or even N4,000. The very fuel people want subsidised would become far more expensive in naira terms.”
Oyedele added that capital flight would not be limited to foreign investors, as wealthy Nigerians, business owners and middle-class investors might also move into dollars, increasing demand for foreign exchange. Ordinary Nigerians, he said, would ultimately bear the cost through higher import costs and rising prices.
The minister also rejected claims that the Nigerian National Petroleum Company Limited’s temporary cut in petrol retail margins amounts to a return to subsidy. He described it as a commercial decision, not a payment funded with public money, and argued that a company reducing its profit margin to make a product cheaper should not be regarded as giving or receiving a subsidy.
ADC challenges minister
The Presidential Campaign Council of the African Democratic Congress, ADC, has dismissed the warning as fear-mongering and challenged Oyedele to publish the economic model behind it.
ADC presidential candidate Atiku Abubakar has promised to restore fuel subsidy if elected, to ease hardship on citizens.
The council’s Director of Media and Publicity, Kola Ologbondiyan, told Vanguard that the Federal Government was using fear to stifle debate.
“The Minister of Finance is merely scaremongering. He cannot claim that a return to fuel subsidy will cause the naira to depreciate to ₦4,000 to the dollar without showing Nigerians the model behind that projection,” he said.
He demanded that the government name those behind the projections and disclose their calculations. He also noted that Nigeria was not the only country to consider or operate a production subsidy, and said the proposal should be judged on its economic merits.
“I do not believe this projection is realistic. It is fantasy,” he said.
Tinubu: No regrets, we can’t go back to Egypt
Separately, President Bola Tinubu said he had no regrets over removing the fuel subsidy, insisting that Nigeria cannot return to “Egypt.”
He spoke at a forum, “Together till 2027: An Evening with Original City Boy,” organised by the City Boy Movement with the “Relax, Tinubu Is Fixing Nigeria” movement, at the Old Banquet Hall, Presidential Villa, Abuja.
The City Boy Movement is a political campaign structure for his re-election, and his son, Seyi, is its Patron.
Referring to opponents promising a return to subsidy, Tinubu drew on the biblical story of Moses leaving Egypt.
“You cannot ask Moses to go back to Egypt. We wake up with ideas, original thoughts and deep thinking to move this country forward. With your energy and support, we will never go back to Egypt,” he said.
He said the economy was growing steadily at about 4.6 per cent and that the country was on the right trajectory.
Tinubu recalled that when he took office, there was no money, foreign reserves were depleted and the country owed airlines. He said his administration rebuilt the tax system and that Nigeria could not borrow its way to greatness.
“I came and removed subsidy on my first day. No Nigerian will go bankrupt. Yes, there was nothing left to pay for subsidy,” he said.
He also said he had no regrets signing the Student Loan Act, noting that more than a million students had been supported through the Nigerian Education Loan Fund, NELFUND.
Tinubu commended the City Boy Movement for building a structure with “millions of real, verifiable members” across every state, local government and ward, down to the polling unit, and for running a call centre that engages young Nigerians daily.
Of his son, he said: “You did not ask for a title or an office. You went to the young people, your age mates, your group. You listened to them and organised them.” He told him, “You have only started. Do more, not less.”
He urged the youths to ensure every young person they know has a Permanent Voter Card and uses it.
Shettima: Economy would have collapsed
Vice President Kashim Shettima said the economy would have collapsed without Tinubu’s far-reaching decisions, adding that critics would otherwise be writing about a collapsed economy from the comfort of Dubai or New York.
He said the economy grew by 4.43 per cent in the last quarter and that foreign reserves were now hovering around $60 billion.
“Yes, Nigerians have gone through some tough times, but it could have been worse,” he said, assuring that in the coming weeks, the President would announce robust responses to agricultural challenges and food prices would come down.
Shettima urged young Nigerians to “go out to the streets and tell the truth” to others.
The Director-General of the City Boy Movement, Francis Shoga, pledged the group’s readiness to serve as “foot soldiers” and ambassadors of the Renewed Hope agenda, promising to inform and engage young Nigerians on government policies and opportunities.
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