FG rules out fuel subsidy return and multiple exchange rates

The Federal Government has ruled out restoring petrol subsidies and returning to multiple exchange rates despite rising fuel prices and calls for relief. Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, said the government will maintain the reforms introduced under President Bola Tinubu.

Oyedele spoke on Saturday, October 17, 2026, at a press briefing on the sidelines of the 2026 International Monetary Fund and World Bank annual meetings in Bangkok, Thailand. He said reversing the reforms could undermine progress in stabilising the economy and weaken investor confidence.

No return to subsidy, multiple FX rates

“Let me be clear, there will be no return to fuel subsidies or multiple exchange rates,” Oyedele said. He said the government’s position on fuel subsidies and foreign exchange reforms remained unchanged despite concerns about the cost of living and rising energy prices.

He explained that the recent 30-day petrol retail margin discount announced by the Nigerian National Petroleum Company Limited was a commercial decision to cushion the impact of high fuel prices. The temporary measure involves reducing margins rather than providing subsidies financed with public funds. He added that the government was considering ways to ease the effects of higher energy costs without reversing its economic policies.

Oyedele maintained that sustaining the reforms was necessary to strengthen economic stability, attract investment and support long-term growth.

Seven percent growth target

The minister said Nigeria was targeting economic growth of 7%, arguing that IMF projections did not fully reflect the country’s potential. The Fund projected Nigeria’s economy would grow by 4.2% in 2026 and 4.3% in 2027.

“We have a target of 7% growth,” he said. He expressed confidence that Nigeria could outperform the forecasts if the government sustained its reforms and addressed obstacles affecting businesses and households.

He identified lower inflation, reduced financing costs and relief from food, energy and logistics pressures as important factors. He also pointed to easing inflation and stronger external reserves as signs of progress, while stressing that these improvements must translate into better living standards.

AI and jobs warning

Oyedele warned that Nigeria must prioritise job creation as artificial intelligence reshapes economies and threatens to widen the gap between economic growth and employment opportunities. Citing estimates discussed at the meetings, he said about 1.2 billion young people would enter the global labour market over the next 10 to 15 years, while only about 400 million jobs were projected to be created.

He said the imbalance presented a significant challenge, particularly for developing countries such as Nigeria, where a growing youth population needs productive employment. According to him, AI could boost economic output without creating enough jobs to absorb new entrants into the workforce.

Oyedele said Nigeria must invest heavily in skills development and attract capital into sectors capable of generating substantial employment. He called for policies that would enable African countries to benefit more from artificial intelligence, including using their data and technological capabilities to build domestic expertise.

He argued that economic progress should not be measured by growth figures or investment flows alone. Multilateral development institutions should also be assessed by the number and quality of jobs their interventions create.

Fuel price context

The Major Energies Marketers Association of Nigeria has opposed the Federal Government’s proposed ₦1,350-per-litre ceiling on petrol costs. MEMAN warned that arbitrary price limits could distort competition without resolving persistent supply and distribution challenges. The association called for transparent, market-driven pricing, improved logistics and lower operating costs, arguing that sustainable fuel price stability depends on addressing supply bottlenecks rather than imposing government-determined limits.

For Nigeria, the challenge is to sustain the reforms while ensuring that improved economic indicators translate into jobs, lower cost pressures and tangible benefits for households.