….FG Warns Subsidy Could Cost N20trn Yearly, Push Pump Price To N2,000
….Minister Says N15.8trn Saved From Subsidy Removal
…Talakawa Rejects 30-Day NNPCL Discount, Says Nigerians Need Permanent Relief
Daud Olatunji
The Federal Government has warned that restoring petrol subsidy could cost Nigeria more than N20 trillion annually, as a human rights organisation, the Talakawa Parliament, rejected the administration’s proposed 30-day petrol discount and demanded the immediate return of subsidy.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, gave the warning on Thursday during a press briefing in Abuja on the rising cost of petrol and renewed calls for subsidy restoration.
But hours after the minister’s announcement, the Talakawa Parliament, an Edo State-based human rights organisation, dismissed the government’s proposed 30-day intervention as inadequate, describing it as another short-term palliative that would do little to address the economic hardship caused by high fuel prices.
In a statement signed by its representative, Marxist Kola Edokpayi, the group declared: “We do not need a 30-day petrol discount — return to the subsidy regime now.”
The group argued that Nigerians require a sustainable solution to rising transportation costs, food prices, inflation, unemployment and declining purchasing power, rather than a temporary reduction in petrol prices.
Oyedele, however, said Nigeria currently consumes about 50 million litres of petrol daily, stressing that returning petrol to its pre-2023 subsidy price would cost the government more than N20 trillion every year.
He said even a proposal to sell petrol at N500 per litre under a subsidy arrangement would cost the government more than N16 trillion annually, before accounting for increased consumption and smuggling.
The minister said such expenditure would consume resources needed for other government responsibilities, including salaries, pensions, schools, hospitals and security.
“Amounts of that size are nearly everything the Federation Account shared among all three tiers of government in 2025,” Oyedele said.
...Talakawa Parliament rejects 30-day relief
The Talakawa Parliament said the proposed 30-day discount could not address what it described as the underlying economic crisis confronting millions of Nigerians.
According to the organisation, the removal of petrol subsidy had imposed an “unbearable burden” on workers, students, pensioners, traders, farmers, small business owners and other vulnerable Nigerians.
It said rising petrol prices had increased transportation costs and triggered further increases in essential goods and services.
“Families are struggling to afford daily meals, workers are spending a significant portion of their wages on transportation, and small businesses are being forced to reduce their operations or shut down entirely because of the rising cost of fuel and electricity,” the group said.
The organisation urged the Federal Government to abandon what it called temporary palliatives and adopt measures capable of providing sustained economic relief.
“Government must listen to the people and adopt policies that genuinely improve their lives rather than offer short-term palliatives that provide temporary relief while leaving the underlying crisis unresolved,” it said.
The group also called for comprehensive and transparent intervention in the petroleum sector, insisting that any subsidy arrangement must be properly monitored to prevent corruption, diversion and exploitation by private interests.
It further demanded measures to tackle what it described as corruption, wasteful government spending and alleged mismanagement of public resources.
FG: Subsidy Could Push Petrol To N2,000
Oyedele warned that returning to a blanket subsidy could weaken government revenues, increase borrowing costs, put pressure on foreign reserves and the naira and potentially trigger a sovereign credit downgrade.
He said government estimates showed that the exchange rate could approach N3,000 to the dollar within months if subsidy was restored.
According to him, such a development could push the price of subsidised petrol to at least N2,000 per litre, significantly above the current average of about N1,400.
Oyedele argued that subsidy did not reduce the actual cost of petrol but merely shifted who paid the bill.
“A subsidy does not lower the cost of fuel. It only changes how it is paid, and when,” he said.
He explained that crude oil, freight and refining inputs were largely priced in dollars, meaning that forcing down the naira price of petrol would effectively require the government to subsidise foreign exchange.
‘Local Refining Subsidy Is Still Consumption Subsidy’
The minister also rejected descriptions of proposed support for locally refined petrol as a “production subsidy”.
According to him, a genuine production subsidy would support producers unable to compete at market prices, whereas providing discounted crude that is ultimately passed on to consumers would amount to a consumption subsidy through another route.
“This is different, it is a discount on crude, passed through to the pump. That is a consumption subsidy by another route, with the same bill attached,” Oyedele said.
He also warned that subsidised petrol could widen the price difference between Nigeria and neighbouring countries, potentially encouraging smuggling and making Nigerian taxpayers effectively subsidise motorists in other countries.
FG Says Subsidy Removal Saved N15.8trn
Defending the 2023 subsidy removal, Oyedele said the policy had released N15.8 trillion to the Federation Account between June 2023 and December 2025.
He said states and local governments received N10.4 trillion of the funds.
According to the minister, 27 states could not reliably pay salaries in May 2023, but none was in that position at the time of his briefing.
At the federal level, he said about two-thirds of the subsidy savings, alongside additional independent revenue and borrowing, had been used for spending that directly benefited Nigerians through higher wages, infrastructure, electricity subsidy and social transfers.
The remaining funds, he said, were used to stabilise the economy, particularly as the cost of servicing debt increased following higher interest rates introduced to tackle inflation.
FG Announces 30-Day Petrol Discount
The Federal Government announced the proposed 30-day petrol discount at NNPCL stations on Thursday amid renewed concerns over the impact of fuel prices on transportation and the cost of living.
Oyedele said public transport operators would receive priority under the intervention because of the pressure rising petrol prices had placed on their operations.
“There’ll be a discount on NNPC petrol for the next 30 days, with priority for public transporters,” the minister said.
However, the government did not immediately disclose the exact amount of the discount or the new pump price Nigerians would pay at participating NNPCL stations.
Details of how eligible public transport operators would be identified and the precise commencement date of the discount were also not immediately disclosed.
The minister also said the government was working towards a “negotiated landing cost” for petrol, which would be reviewed monthly.
FG Rejects Blanket Subsidy
Rather than returning to a blanket subsidy, Oyedele said the government had deployed tax and duty waivers, local refining, naira-for-crude arrangements, exchange-rate stabilisation and compressed natural gas deployment to moderate fuel costs.
He said the government had granted full tax and duty waivers on petrol worth more than N3.3 trillion for the year ending September 30, 2026.
Other measures include additional cash transfers, subsidised credit and faster CNG deployment.
The government is also considering an excess profit tax on energy operators, with proceeds expected to fund measures aimed at cushioning vulnerable consumers.
Subsidy Debate Intensifies Ahead Of 2027
The renewed subsidy debate comes as Nigerians continue to contend with high transportation costs, elevated food prices and pressure on household incomes following the removal of petrol subsidy by the President Bola Tinubu administration in 2023.
While the Federal Government insists that returning to the old subsidy regime would deepen the country’s fiscal and economic problems, the Talakawa Parliament argues that affordable petrol is essential to the welfare of Nigerians and the stability of the wider economy.
The group said its demand for subsidy restoration was not politically motivated but based on what it described as the economic realities confronting Nigerians.
“It is an independent demand for the immediate restoration of petrol subsidy and meaningful relief for the Nigerian people,” it said.
Oyedele, meanwhile, maintained that the government would not reverse the reform, arguing that doing so could expose Nigeria to the same cycle of fuel scarcity, smuggling, currency weakness and fiscal pressure experienced under the previous subsidy regime.
“Our task is not to reverse a necessary reform designed to set our country on the path towards sustained prosperity,” he said.
“It is to make sure its gains reach more Nigerians, more quickly and in more tangible ways.”
'
'Do you want to share a story with us? Do you want to advertise with us? Do you need publicity for a product, service, or event? Contact us on WhatsApp +2348183319097 Email: platformtimes@gmail.com
We are committed to impactful investigative journalism for human interest and social justice. Your donation will help us tell more stories. Kindly donate any amount HERE
