Fuel taxes to come when Nigerians’ incomes improve, economy stabilises — Oyedele

Nigeria's Finance Minister, Taiwo Oyedele, has cautioned against reintroducing fuel subsidies, warning that it could lead to capital flight, greatly undermine investor confidence, and push the naira to as low as N4,000 against the dollar. During the IMF and World Bank Annual Meetings in Bangkok, Oyedele emphasized that any indication of the government considering the return of fuel subsidies would immediately impact financial markets, raise borrowing costs, and exacerbate economic pressures on households.

Oyedele also addressed concerns that capital flight would be limited to foreign investors, stating that wealthy Nigerians, business owners, and middle-class investors might also seek refuge in dollars, intensifying the demand for foreign exchange. He stressed that ordinary Nigerians would ultimately suffer from higher import costs, rising prices, and severe economic hardship.

The minister clarified that the temporary reduction in petrol retail margins by the Nigerian National Petroleum Company Limited was a commercial decision and not a subsidy. He reiterated that fuel prices would only be subsidized when Nigerians' incomes improve and the economy stabilizes. The removal of fuel subsidies, announced by President Bola Tinubu in May 2023, has led to soaring transportation prices and a significant depreciation of the naira, which had jumped to around N1,300 from between N500 and N700 in 2023.