Petrol subsidy return may cost Nigeria N19tn annually – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has warned that a return to a universal petrol subsidy in Nigeria could cost the government an estimated N19.16 trillion annually. This significant financial burden would create a fiscal challenge for the country's already strained public finances. Dr Muda Yusuf, the CEO of the CPPE, calculated the annual subsidy bill, based on a daily petrol consumption of 50 million litres and a subsidy requirement of N1,050 per litre, would amount to around N52.5 billion daily and N1.575 trillion monthly.

Yusuf cautioned that restoring the old subsidy system could replace the current energy-price issue with a more severe fiscal, debt, foreign-exchange, and investment problem. He argued that the additional resources should be used to improve citizens' welfare, including mass transit, electricity, healthcare, education, food security, infrastructure, and social protection.

Yusuf stressed the importance of distinguishing the recent increase in global energy prices from the issue of subsidy removal, emphasizing that removing the subsidy would improve the commercial viability of domestic refining and strengthen government revenues. The CPPE urged the government to preserve the downstream petroleum reforms while mitigating the social and economic costs associated with the reform.