Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, warned that a return to petrol subsidy could trigger capital flight and push the naira to as high as N4,000 per dollar.
He made the statement on Monday at a press briefing during the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand.
Oyedele said even the mere suggestion of restoring the subsidy would unsettle markets. “If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately,” he stated.
He explained that capital outflows would follow at once. “Airfares would struggle, the naira would come under severe pressure, potentially moving towards 3,000, 3,500 or even 4,000. The very fuel people want subsidized would become far more expensive in naira terms,” Oyedele added.
Furthermore, he noted that the flight of capital would not stop with foreign investors. Wealthy Nigerians, business owners and middle-class investors could also shift their funds into dollars. This move would raise demand for foreign exchange and intensify pressure on the local currency.
As a result, ordinary Nigerians would face the heaviest burden. Higher import costs, rising prices and greater economic hardship would follow, according to the minister.
Oyedele stressed that markets had already discounted opposition calls for subsidy restoration. He linked any policy reversal to weaker revenue, possible credit downgrades and a reversal of recent economic gains.
In addition, he recalled earlier estimates that a subsidy return could drive the exchange rate toward N3,000 per dollar within months while lifting petrol prices to at least N2,000 per litre.
The minister maintained that the government remained committed to the reforms introduced after the 2023 subsidy removal.
