The International Monetary Fund (IMF) has urged Nigeria to avoid reinstating a blanket petrol subsidy, recommending targeted financial assistance to protect vulnerable households from rising energy costs.
Rodrigo Valdés, director of the IMF’s Fiscal Affairs Department, made the recommendation during a briefing on the Fund’s Fiscal Monitor at the 2026 IMF-World Bank Annual Meetings in Bangkok.
Valdés said broad fuel subsidies are costly, tend to benefit wealthier consumers disproportionately and can worsen pressure on public finances. He added that fuel subsidies and measures preventing prices from adjusting to energy shocks had cost countries between 1% and 1.5% of gross domestic product in 2026.
“Protecting people is not the same as protecting the price of fuels,” Valdés said, advocating social safety nets and household data to direct support to those most in need.
The comments come amid calls in Nigeria to restore petrol subsidies as higher fuel prices drive up transport costs and inflation, raising concerns about the impact on low-income households
In response to rising fuel costs, the Nigerian government recently announced a 30-day petrol discount at Nigerian National Petroleum Company Limited retail stations, prioritising public transport operators.
