Fuel Subsidy Return Could Push Naira to ₦4,000 per Dollar, Oyedele Warns as ADC Demands Evidence

Nigeria’s Finance Minister, Taiwo Oyedele, has warned that restoring petrol subsidy could weaken the naira significantly, potentially pushing the exchange rate to between ₦3,000 and ₦4,000 per dollar. The African Democratic Congress (ADC), however, has challenged the government to provide evidence supporting the projection.

Oyedele gave the warning during a press briefing at the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand. He argued that bringing back the subsidy could trigger capital flight, weaken investor confidence and increase pressure on Nigeria’s foreign exchange market.

According to the minister, investors are concerned about whether the Tinubu administration’s economic reforms would continue beyond the next election cycle. He said even a suggestion that the government was considering restoring the subsidy could unsettle financial markets, raise borrowing costs and place additional pressure on the naira.

“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately,” Oyedele said. He warned that the naira could face severe pressure, potentially reaching ₦3,000, ₦3,500 or even ₦4,000 to the dollar, making imported goods and fuel more expensive in local currency.

Oyedele also cautioned that capital flight could involve wealthy Nigerians, business owners and middle-class investors seeking to protect their assets in dollars. He argued that ordinary citizens would ultimately feel the effects through higher import costs, rising prices and increased economic hardship. The minister further clarified that the Nigerian National Petroleum Company Limited’s reported reduction in petrol retail margins was a commercial decision, not a return to government-funded subsidy.

The ADC Presidential Campaign Council rejected the minister’s warning, demanding that the government publish the economic models used to reach the projected exchange rates. Kola Ologbondiyan, the council’s director of media and publicity, accused the government of using fear to discourage debate about fuel subsidy policy.

“The Minister of Finance is merely scaremongering. He cannot claim that a return to fuel subsidy will cause the naira to depreciate to ₦4,000 to the dollar without showing Nigerians the model behind that projection,” Ologbondiyan said. He described the projection as unrealistic and argued that subsidy proposals should be assessed on their economic merits.

The dispute comes as ADC presidential candidate Atiku Abubakar has promised to restore fuel subsidy if elected in 2027, saying the move would help ease the burden on Nigerians. President Bola Tinubu, meanwhile, has repeatedly defended the removal of the subsidy, which he announced during his inauguration on May 29, 2023.

Speaking at a City Boy Movement event in Abuja, Tinubu said he had no regrets about the decision and rejected calls to reverse it. He compared returning to the subsidy system with going back to Egypt, saying his administration intended to pursue new ideas and economic reforms. Vice President Kashim Shettima also defended the government’s approach, arguing that the country’s economic situation could have been worse without the decisions taken by the administration.

The exchange highlights a major economic and political debate ahead of the 2027 election: whether restoring fuel subsidy would offer meaningful relief to households or create new pressure on public finances and the naira. While Oyedele has warned of severe market consequences, the ADC is demanding evidence to support the forecast, leaving voters to weigh competing claims about the policy’s costs and benefits.