CPPE warns petrol subsidy return would cost ₦20tn yearly, urge targeted relief instead
CPPE warned against restoring petrol subsidy in a policy brief signed by CEO Muda Yusuf on Sunday, September 6, 2026, calling it fiscally unsustainable despite rising pump prices. The think tank estimated restoring universal subsidy could cost approximately ₦20 trillion annually based on 50 million litres daily consumption and ₦1,050/litre subsidy requirement.
Petrol prices have jumped from about ₦774-₦800/litre to over ₦1,300/litre due to global energy price shocks linked to the Middle East crisis. CPPE stressed these are separate issues - the domestic structural reform of subsidy removal versus external commodity price shocks requiring different policy responses.
The organisation warned that a ₦20 trillion annual subsidy bill would compete with funding for infrastructure, education, healthcare and security while worsening fiscal deficits, increasing borrowing and debt-service pressures. Such spending could crowd out private-sector credit, sustain high interest rates and weaken investment, productivity and job creation.
Rather than subsidy restoration, CPPE recommended targeted interventions: expanding affordable public transportation, improving electricity supply, accelerating CNG/solar solutions, strengthening food production through better agricultural security and rural infrastructure, and providing targeted support for vulnerable households and measures to reduce energy, logistics and financing costs for MSMEs.
CPPE acknowledged subsidy removal increased government revenues but insisted citizens must see tangible benefits through improved public services. The group urged government to make reform gains visible through infrastructure and productive investment while maintaining market-based pricing in downstream petroleum sector.
The warning comes amid renewed subsidy restoration calls, including former VP Atiku Abubakar's pledge to restore targeted petrol subsidy if elected in 2027. Nigeria removed petrol subsidy in May 2023 after President Tinubu's inauguration announcement that 'the fuel subsidy is gone.'