The International Monetary Fund (IMF) has strongly cautioned the Federal Government of Nigeria against reinstating blanket petrol subsidies, warning that restoring broad-based energy price controls would severely strain public finances and disproportionately benefit higher-income earners rather than vulnerable populations.

Speaking during a press briefing on the Fiscal Monitor report at the IMF and World Bank Annual Meetings in Bangkok, Thailand, Rodrigo Valdés, Director of the IMF’s Fiscal Affairs Department, emphasized that government policy should focus on protecting vulnerable citizens rather than artificially suppressing market prices. Addressing growing calls for the return of fuel subsidies ahead of upcoming election cycles, Valdés underscored that shielding retail fuel prices from global market realities prevents demand adjustments, exacerbates energy supply pressures, and drains vital fiscal resources. He noted that worldwide efforts to suppress energy prices cost nations between 1 percent and 1.5 percent of their Gross Domestic Product (GDP) in 2026 alone.

Rather than implementing universal price relief, the multilateral lender recommended that Nigeria adopt limited, temporary, and highly targeted social safety net interventions to cushion low-income households against inflationary pressures and soaring transportation costs. Davide Furceri, a division chief within the IMF’s Fiscal Affairs Department, suggested alternative support mechanisms, including direct subsidies for public transit users, expanded school feeding initiatives, targeted agricultural assistance for smallholder farmers, and cash transfers tied to verified social registries.

The IMF reiterated that maintaining fiscal discipline remains essential for managing Nigeria’s national debt and rising borrowing costs. While acknowledging that developing robust household databases and digital distribution channels presents administrative challenges, the Fund urged Nigerian policymakers to leverage available temporary measures while expanding formal social safety nets to ensure long-term economic stability.