The Centre for the Promotion of Private Enterprise (CPPE) has warned that restoring universal petrol subsidy could cost the Nigerian government nearly ₦20 trillion annually, creating a bigger fiscal, debt, foreign-exchange and investment problem for the economy.
In a policy brief issued on Sunday, September 13, 2026, CPPE Chief Executive Officer Dr Muda Yusuf said the government should resist calls to return to the old subsidy regime, despite the severe pressure rising petrol prices are placing on households and businesses.
The centre estimated that, based on petrol consumption of 50 million litres daily and an indicative subsidy requirement of ₦1,050 per litre, the subsidy would cost about ₦52.5 billion daily, ₦1.575 trillion monthly and ₦19.16 trillion annually.
“An annual subsidy bill approaching ₦20 trillion would impose an enormous opportunity cost,” Yusuf said.
He warned that such expenditure would compete with funding for infrastructure, education, healthcare, security, agriculture and social protection, while potentially widening the fiscal deficit and increasing borrowing and debt-service pressures.
According to the CPPE, higher government borrowing could also crowd out private-sector credit, sustain high interest rates and weaken investment, productivity, job creation and economic growth.
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“Nigeria would therefore risk replacing an energy-price problem with a much larger fiscal, debt, foreign-exchange and investment problem,” Yusuf said.
The CPPE said the current increase in petrol prices should also not be attributed entirely to subsidy removal, arguing that domestic reform and the recent global energy shock are separate issues requiring different policy responses.
It said petrol was selling at about ₦774–₦800 per litre before the latest conflict-related increase in international energy prices, but subsequently rose above ₦1,300 per litre as global energy prices increased sharply amid the Middle East crisis.
“These are two distinct issues: one is a domestic structural reform involving the transition to market-based pricing; the other is an external commodity-price shock,” the centre said.
The organisation acknowledged that the latest petrol-price escalation had increased transportation, logistics and production costs, weakened purchasing power and worsened competitiveness challenges for businesses, particularly micro, small and medium-sized enterprises.
However, it argued that the solution should be targeted relief rather than a return to universal petrol subsidy.
The CPPE said the government should expand affordable public transportation, rail freight and logistics infrastructure while improving electricity supply and accelerating compressed natural gas, solar and distributed-energy solutions.
It also called for stronger food production, targeted social protection, affordable healthcare and education, and measures to reduce energy, logistics and financing costs for productive enterprises, particularly MSMEs.
Yusuf said subsidy removal had improved the commercial viability of domestic refining after years of suppressed prices and uncertainty over the pricing framework.
He said a stronger domestic refining industry could create opportunities in diesel, aviation fuel, petrochemicals, fertiliser, plastics, chemicals, logistics, storage and maritime services, while conserving foreign exchange through import substitution and creating export opportunities.
According to the CPPE, Nigeria’s strategic objective should be to move from dependence on imported petroleum products to becoming a competitive regional refining and petrochemical hub.
The centre, however, said the fiscal gains from subsidy removal must become more visible to citizens through better public services and productive investment.
“Citizens must see tangible benefits through improved public transportation, electricity, healthcare, education, food security, infrastructure and social protection,” it said.
The CPPE also called for greater transparency from the federal, state and local governments on how additional resources arising from subsidy removal are being used.
It said the debate should move beyond whether petrol subsidy should be restored and focus instead on how the gains from the reform can be converted into lower structural costs, stronger domestic production, improved competitiveness, greater energy security and measurable improvements in citizens’ welfare.
“The appropriate policy direction is to preserve the downstream petroleum reforms while aggressively mitigating their social and economic costs,” Yusuf said.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X