N500 petrol price would cost FG over N16tn yearly — Oyedele

The Federal Government has warned that returning petrol subsidy could cost Nigeria more than N20 trillion annually, while selling petrol at N500 per litre would require over N16 trillion yearly.

According to Tribune, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, spoke on Thursday during a briefing in Abuja.

“Consider the arithmetic. Nigeria consumes roughly 50 million litres of petrol a day. To return petrol to its pre-reform price would cost more than 20 trillion naira a year, before any allowance for inflated consumption and smuggling. Even the 500 naira a litre that some have promised would cost over 16 trillion naira a year,” he said.

Oyedele warned that restoring subsidy could weaken government revenue, increase borrowing costs and put further pressure on the naira.

“Our estimate is that the exchange rate could approach 3,000 naira to the dollar within months, and so-called subsidised petrol would cost at least 2,000 naira a litre,” he said.

He added that subsidy removal released N15.8 trillion to the Federation Account between June 2023 and December 2025.