The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that any policy reversal on petroleum subsidy could crash the Naira to ₦4,000 per US Dollar.
Speaking during an economic briefing at the 2026 International Monetary Fund and World Bank Annual Meetings in Bangkok, Oyedele firmly dismissed calls for a return to fuel subsidies, cautioning that even an indication that the Federal Government was weighing a reversal would spark catastrophic financial market shocks.
The minister explained that global investors have calibrated their positions on the premise that Nigeria will sustain its fiscal reforms, warning that backtracking would prompt immediate capital flight. In addition to foreign divestment, Oyedele stated that corporate bodies, middle-class savers, and high-net-worth domestic investors would aggressively move to hedge against the local currency by buying up foreign exchange. He observed that this simultaneous foreign and local sell-off would trigger an uncontrollable run on reserves, rapidly driving the exchange rate past ₦3,000 and ₦3,500, up to ₦4,000 to the Dollar.
According to him, such currency depreciation would ultimately defeat the purpose of subsidised fuel, as soaring landing costs would leave consumers wishing for petrol at ₦1,400 per litre.
The warning drew swift pushback from opposition figures. The African Democratic Congress Presidential Campaign Council dismissed the ₦4,000 projection as unsubstantiated scaremongering, with former PDP National Publicity Secretary Kola Ologbondiyan challenging the Ministry of Finance to publish the empirical economic models behind the forecast.
The opposition maintained that energy subsidies remain standard fiscal buffers employed globally to protect citizens during acute cost-of-living crises.Despite the political contention, the Federal Government’s position aligns with recommendations from multilateral institutions, as the IMF recently cautioned Nigeria that broad energy subsidies deplete critical state revenues, advising the administration to rely instead on targeted social safety nets to cushion vulnerable households.
