By Ghazali Ibrahim
The International Monetary Fund (IMF) has warned the Nigerian government against restoring a blanket petrol subsidy, urging it to provide targeted financial support to poor and vulnerable households instead.
Rodrigo Valdés, Director of the IMF’s Fiscal Affairs Department, gave the advice during a press briefing at the 2026 annual meetings of the IMF and World Bank in Bangkok, Thailand.
The warning comes amid rising petrol prices in Nigeria and growing calls for government intervention to ease the burden on households, particularly as the country approaches another election cycle.
According to the IMF, blanket fuel subsidies are expensive, put additional pressure on government finances and often benefit wealthier consumers more than low-income households.
Valdés acknowledged that rising fuel prices can have significant political consequences but argued that protecting citizens should not necessarily mean keeping fuel prices artificially low.
“Protecting people is not the same as protecting the price of fuels,” he said.
The IMF official said fuel subsidies and similar measures that prevent energy prices from adjusting to supply shortages had cost countries between one and 1.5 per cent of their gross domestic product in 2026.
He advised governments to use social safety nets and household data to identify those most in need of assistance.
The recommendation comes after President Bola Tinubu removed Nigeria’s longstanding petrol subsidy in May 2023, a decision that contributed to higher transport and living costs.
The Federal Government recently announced a temporary petrol discount at Nigerian National Petroleum Company Limited (NNPC) retail stations to cushion the impact of rising fuel prices.
Rather than reintroducing a general subsidy, the IMF recommended targeted and temporary assistance, including support for public transport users, vulnerable farmers and households struggling with higher costs.
