Don’t bring back petrol subsidy, IMF warns Nigeria

The International Monetary Fund (IMF) has warned Nigeria against reinstating broad petrol subsidies, urging the government to prioritise targeted financial assistance for vulnerable households struggling with rising energy costs.

According to Daily Post, the IMF said blanket fuel subsidies were expensive, disproportionately benefited wealthier Nigerians and could worsen the country’s financial challenges amid increasing borrowing costs.

The Fund acknowledged Nigeria’s economic progress but expressed concern that the benefits remained unevenly distributed, leaving millions facing persistent hardship.

It stressed that policymakers must balance immediate household needs with long-term fiscal sustainability.

“What we are advocating is for policymakers to balance the near-term needs of the population, and that involves food security. That involves energy security,” the IMF said.

The institution recommended temporary cash transfers and income support for vulnerable families instead of widespread petrol subsidies.

The warning comes amid renewed debates over fuel subsidies following rising petrol prices and mounting pressure on household incomes.

The IMF maintained that targeted interventions would provide relief without undermining Nigeria’s economic stability.