B: Mardiyyah Abubakar
The International Monetary Fund (IMF) has urged the Federal Government not to restore a blanket petrol subsidy, recommending targeted support for vulnerable households affected by rising fuel prices.
The Fund warned that broad fuel subsidies place pressure on public finances, cost governments significant revenue and often benefit higher-income consumers more than poorer households.
The Director of the IMF’s Fiscal Affairs Department, Rodrigo Valdés, made the recommendation during a press briefing on the Fiscal Monitor at the 2026 IMF-World Bank Annual Meetings in Bangkok.
Valdés spoke in response to concerns that higher fuel prices in Nigeria could increase transport costs, worsen inflation and deepen poverty as the government faces calls to restore the subsidy ahead of an election year.
“Protecting people is not the same as protecting the price of fuels,” he said.
He added that fuel subsidies and other measures that prevent energy prices from adjusting fully to market shocks cost countries between one and 1.5 per cent of gross domestic product (GDP) in 2026.
The IMF recommended that governments use social safety nets and household data to identify vulnerable citizens and provide assistance to those who need it most.
The Federal Government recently announced a 30-day petrol discount at Nigerian National Petroleum Company Limited retail stations, prioritising public transport operators to cushion the impact of rising fuel prices.
