‘It’s regressive’ – IMF warns Nigeria towards restoring petrol subsidy

The International Monetary Fund (IMF) has suggested the Federal authorities towards restoring a broad petrol subsidy, recommending focused help for susceptible households to cushion the impression of rising power prices.

The Director of the IMF’s Fiscal Affairs Department, Rodrigo Valdes, acknowledged this throughout a press briefing on the Fiscal Monitor on the 2026 Annual Meetings of the IMF and World Bank in Bangkok.

Valdes mentioned blanket petrol subsidies are costly, typically profit higher-income customers disproportionately, and worsen fiscal pressures amid rising borrowing prices.

His feedback adopted a query about how the Fund might advocate permitting power costs to replicate shortage when increased gas costs in Nigeria might elevate transport prices, worsen inflation, and deepen poverty, notably as the federal government faces calls to revive the petrol subsidy forward of an election 12 months.

“Protecting people is not the same as protecting the price of fuels,” Valdés mentioned

He mentioned gas subsidies or measures that prevented costs from totally adjusting to an power shock had value international locations between 1 per cent and 1.5 per cent of gross home product (GDP) in 2026.

He mentioned the federal government ought to as a substitute use social security nets and family knowledge to determine individuals who want help.

The Federal Government not too long ago introduced a 30-day petrol low cost at Nigerian National Petroleum Company (NNPC) Limited retail stations, with precedence for public transport operators, to cushion the impression of rising gas costs.