IMF Advises Nigeria Against Widespread Petrol Subsidy Restoration

The International Monetary Fund (IMF) has warned the Nigerian government not to restore a broad petrol subsidy. Instead, it suggests providing targeted support to help vulnerable households deal with rising energy costs.

During a press briefing at the 2026 Annual Meetings of the IMF and World Bank in Bangkok, Rodrigo Valdes, the Director of the IMF’s Fiscal Affairs Department, explained that blanket petrol subsidies are costly. He noted that these subsidies often benefit wealthier consumers more than those who need help and can increase financial pressure on the government, especially as borrowing costs rise.

Valdes responded to concerns about how higher fuel prices could lead to increased transportation costs, inflation, and deeper poverty in Nigeria. He emphasized that protecting people does not mean keeping fuel prices low. He stated that countries that maintain fuel subsidies can lose between 1 percent and 1.5 percent of their gross domestic product (GDP) in 2026.

Instead of subsidies, Valdes recommended using social safety nets to identify and assist those in need. This approach would be more effective in supporting vulnerable families.

Recently, the Nigerian government announced a 30-day petrol discount at stations operated by the Nigerian National Petroleum Company (NNPC) Limited. This discount is aimed particularly at public transport operators to help ease the burden of rising fuel prices.