Information Minister Mohammed Idris says subsidy reversal could revive fuel scarcity, worsen fiscal pressures and undermine investor confidence.
The Federal Government has warned against any attempt to restore fuel subsidy, saying the policy would reverse the economic gains recorded since the removal of the subsidy in May 2023.
Minister of Information and National Orientation, Mohammed Idris, said the government could not afford to return to what he described as an unsustainable and retrogressive subsidy regime, warning that its reversal could revive fuel scarcity, increase fiscal pressures and create uncertainty for investors.
Idris said the removal of the subsidy, alongside foreign exchange reforms, had released significant resources to the three tiers of government. He said subsidy savings amounted to N15.8 trillion between June 2023 and December 2025, comprising about N5.43 trillion for the Federal Government, N6.52 trillion for states and N3.88 trillion for local governments.
He clarified that the N15.8 trillion was not held in a separate government account but represented resources released into the wider Federation Account and made available to the three tiers of government.
The minister said restoring subsidy could also revive the fiscal challenges associated with the previous system, including excessive borrowing through Ways and Means financing by the Central Bank of Nigeria.
According to him, Ways and Means obligations stood at about N30 trillion when President Bola Tinubu assumed office in May 2023 but had since been significantly curtailed.
Idris also warned that subsidy restoration could undermine investment in infrastructure, education, healthcare, security and social protection. He noted that more than 10 million Nigerian households had benefited from social transfers, while over N400 billion had been committed to initiatives including the Nigerian Education Loan Fund, the MOFI Real Estate Investment Fund and the Nigerian Consumer Credit Corporation.
The minister said Nigeria was entering a new phase in the petroleum sector with expanding domestic refining capacity, stressing that policy reversal could discourage investors at a time the country was working to strengthen energy security.
He argued that the hardship associated with economic reforms should be addressed by accelerating their benefits rather than dismantling the reforms.
Idris said the government remained focused on using the fiscal space created by the reforms to fund infrastructure, improve social protection and strengthen the productive capacity of the economy.
His comments followed a proposal by former Vice President Atiku Abubakar to restore fuel subsidy under a targeted and transparently managed system if elected president in 2027.
Atiku, through his media aide, Phrank Shaibu, said his proposed intervention would be capped, budgeted and independently audited, with a clear exit mechanism, alongside measures to expand domestic refining, improve transportation and restore household purchasing power.
The proposal has generated debate among political actors, economists, labour groups and other stakeholders, with supporters and critics differing over the economic consequences of restoring subsidy.
Accord stalwart Gbenga Olawepo-Hashim also criticised Atiku’s position, describing the change as inconsistent and urging political leaders to explain why they had altered their previous positions on subsidy removal.
Hashim, however, backed a targeted and transparent subsidy regime to protect consumers and productive sectors, saying any intervention should have clear eligibility criteria, publicly disclosed costs and strict accountability mechanisms.
The Federal Government maintained that Nigeria must sustain its current reform path while addressing the hardship faced by citizens through measures that expand economic opportunities and improve living standards.