The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has ruled out any plan to reintroduce fuel subsidy to cushion the rising cost of petrol triggered by the conflict in the Middle East.
Edun stated this while answering questions during a media briefing of the G-24 on the sidelines of the launch of the April 2026 Global Financial Stability Report by the International Monetary Fund (IMF) on Tuesday, April 14.
The minister, who assumed the chairmanship of the Intergovernmental Group of 24 on November 1, 2025, said that rather than reversing reforms, the focus for Nigeria and other oil-producing countries like Ecuador should be on targeted and temporary relief for the poor and most vulnerable.
Responding to how the Iran war is affecting emerging economies, particularly within the G-24, Edun said the transmission of its impact differs from what was seen during the COVID-19 pandemic.
According to him, the effect is not one-directional. While oil-producing countries such as Nigeria and Ecuador benefit from higher oil prices through increased government revenues, the same price surge also drives up gas, fertilizer, and food costs.
“It is not a one-way effect. Even oil-producing countries experience the transmission of higher costs, which feed through from gas prices to fertilizer and food prices,” the Minister said.
He added that countries must focus on building resilience by deploying existing buffers where necessary and prioritising targeted, short-term support for vulnerable populations rather than reversing ongoing reforms.
However, Edun firmly ruled out the return of fuel subsidies as a response to rising fuel prices, despite the knock-on effects on food and transport costs.
He noted that Nigeria’s 2023 reforms under Bola Tinubu, which included the removal of fuel subsidies and liberalisation of the foreign exchange market, were critical steps that had drawn praise from international financial institutions, including the IMF.
He added that although these reforms had begun yielding progress, they have been disrupted by external shocks beyond Nigeria’s control.
He warned that rolling back these reforms would not achieve the intended economic stability, stressing the need for targeted intervention instead.
“It is important to avoid a return to generalized subsidies or a relapse into policies that have not proven successful in the past. Instead, whether for oil-importing or oil-exporting countries, the focus should remain on supporting the poorest and most vulnerable in coping with the current pricing pressures.”
Edun’s comments come as the IMF cut Nigeria’s economic growth forecast for 2026 by 0.3 percentage points to 4.1%, down from 4.4%, citing increasing global and domestic pressures.
The IMF disclosed this during the same briefing for the launch of its April 2026 Global Financial Stability Report.
According to the Fund, the downgrade reflects rising costs and mixed economic signals, as higher fuel, fertilizer, and shipping costs continue to weigh on non-oil sectors, even as higher oil prices provide some support.
“Turning to Nigeria, we have revised growth down by 0.3 percentage points to 4.1 per cent in 2026. This reflects a balance of two forces: higher fuel and fertilizer prices, along with increased shipping costs, which are expected to weigh on non-oil activity, and some offset from higher oil prices,” said Deniz Igan.
The ongoing conflict in the Middle East has had a direct impact on Nigeria’s energy market, particularly fuel prices.
Following attacks involving the United States and Israel on Iran, and the subsequent disruption of oil flows through the Strait of Hormuz, global oil supply has tightened significantly.
As a result, petrol prices in Nigeria have surged from around N799 per litre before the conflict to about N1,200 per litre, after the Dangote Refinery increased its gantry and coastal prices.
With tensions escalating and naval actions further restricting oil movement after failed talks between the U.S. and Iran, analysts warn that petrol prices could climb as high as N2,000 per litre in the coming weeks without government intervention.
Already, the sharp increase in fuel prices has translated into higher transportation and food costs across the country, worsening the cost-of-living crisis.
