# ‘It’s regressive’ – IMF warns Nigeria against restoring petrol subsidy

- Link: https://viralbrief.top/its-regressive-imf-warns-nigeria-against-restoring-petrol-subsidy/
- Published: 2026-10-15T20:10:35+00:00
- Author: Olamide

The International Monetary Fund (IMF) has advised the Federal government against
restoring a broad petrol subsidy, recommending targeted support for vulnerable households
to cushion the impact of rising energy costs.

 

The Director of the IMF’s Fiscal Affairs Department, Rodrigo Valdes, stated this
during a press briefing on the Fiscal Monitor at the 2026 Annual Meetings of the
IMF and World Bank in Bangkok.

 

Valdes said blanket petrol subsidies are expensive, often benefit higher-income 
consumers disproportionately, and worsen fiscal pressures amid rising borrowing 
costs.

 

His comments followed a question about how the Fund could recommend allowing energy
prices to reflect scarcity when higher fuel prices in Nigeria could raise transport
costs, worsen inflation, and deepen poverty, particularly as the government faces
calls to restore the petrol subsidy ahead of an election year.

 

> “Protecting people is not the same as protecting the price of fuels,” Valdés said

 

 

He said fuel subsidies or measures that prevented prices from fully adjusting to
an energy shock had cost countries between 1 per cent and 1.5 per cent of gross 
domestic product (GDP) in 2026.

 

He said the government should instead use social safety nets and household data 
to identify people who need assistance.

 

The Federal Government recently announced a 30-day petrol discount at Nigerian National
Petroleum Company (NNPC) Limited retail stations, with priority for public transport
operators, to cushion the impact of rising fuel prices.

 

 

 [Source link ](https://www.lindaikejisblog.com/2026/10/its-regressive-imf-warns-nigeria-against-restoring-petrol-subsidy.html)

  TL;DR (AI Generated)

The International Monetary Fund has advised the Nigerian government against restoring
a broad petrol subsidy because it is expensive and regressive.

Instead of blanket fuel subsidies that worsen fiscal pressures, the IMF recommends
implementing targeted social safety nets to protect vulnerable households from rising
energy costs.

Meanwhile, the Federal Government recently introduced a temporary thirty-day petrol
discount at select retail stations to help cushion the impact of high fuel prices.

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