The International Monetary Fund (IMF) has advised Nigeria against reinstating a general petrol subsidy, urging the Federal Government to provide targeted financial assistance to vulnerable households amid rising fuel prices.
Rodrigo Valdés, Director of the IMF’s Fiscal Affairs Department, gave the advice on Wednesday during a briefing on the Fund’s Fiscal Monitor at the 2026 IMF-World Bank Annual Meetings in Bangkok, Thailand.
Valdés said broad-based fuel subsidies were costly, placed pressure on public finances and often benefited wealthier consumers more than low-income households.
“Protecting people is not the same as protecting the price of fuels,” he said, recommending social safety nets and targeted support for those most affected by rising energy costs.
The IMF official noted that fuel subsidies and measures preventing domestic energy prices from reflecting market conditions had cost countries between one and 1.5 percent of gross domestic product in 2026.
Davide Furceri, a division chief in the IMF’s Fiscal Affairs Department, also recommended targeted interventions such as subsidised public transport, school feeding programmes and assistance for vulnerable farmers.
The advice comes after the Federal Government announced a 30-day petrol discount at Nigerian National Petroleum Company Limited retail outlets. Finance Minister Taiwo Oyedele said the company would temporarily forgo its retail profit margin to cushion the impact of rising fuel prices.
Oyedele maintained that the measure was not a return to fuel subsidy, as the discount would be funded by NNPC Retail rather than public funds.
The IMF urged governments to keep relief measures targeted and temporary while allowing energy prices to reflect market conditions.
