The International Monetary Fund (IMF) has advised the Federal Government against restoring petrol subsidy, but deploy targeted interventions to cushion the impact of soaring energy costs on vulnerable citizens.
The Director of the IMF’s Fiscal Affairs Department, Rodrigo Valdés, issued the warning on Wednesday during a press briefing at the 2026 IMF and World Bank annual meetings in Bangkok, Thailand.
Addressing concerns about rising inflation and transport costs in Nigeria, he claimed that fuel subsidies disproportionately benefit higher-income earners and worsen national fiscal pressures.
Valdés stressed that artificial price controls have cost developing nations between 1 and 1.5 per cent of their gross domestic product. He advised the government to leverage on credible household data to strengthen existing social safety nets rather than returning to the subsidy regime.
“Protecting people is not the same as protecting the price of fuels. It’s first fiscally very costly, and second, if you look at the pattern of consumption, it’s easy to see that that subsidy is readily regressive in many places,” Valdés stated.
The IMF’s warning comes just a few days after the Federal Government directed the Nigerian National Petroleum Company (NNPC) Limited to implement a 30-day petrol discount for public transport operators across its retail stations.
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