Petrol Subsidy Restoration Could Cost Nigeria N19.16tn Annually

The Centre for the Promotion of Private Enterprise (CPPE) has issued a warning that reinstating a universal petrol subsidy in Nigeria could incur an annual cost of approximately N19.16 trillion. This estimate is based on a daily petrol consumption of 50 million litres and a subsidy of N1,050 per litre, resulting in daily costs of about N52.5 billion or N1.575 trillion monthly.

Dr. Muda Yusuf, Chief Executive Officer of CPPE, stated that such a subsidy would strain public finances, competing with funding for critical sectors like infrastructure, education, and healthcare. He noted that the actual subsidy costs could fluctuate based on various factors, including crude oil prices and exchange rates.

Yusuf emphasized that the government should consider targeted relief measures instead of reverting to a universal subsidy system, especially as petrol prices have surged due to global energy price increases. He clarified that the rise in petrol prices cannot be solely attributed to subsidy removal, as it also reflects broader market conditions.