The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that a return to petrol subsidy could trigger capital flight, weaken investor confidence and push the naira to between N3,000 and N4,000 to the dollar.

Oyedele gave the warning on Monday during a press briefing at the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand.

He said investors had repeatedly expressed concerns over whether the Federal Government would abandon its economic reforms ahead of the next election cycle.

The minister ruled out reversing the reforms, warning that even a signal that President Bola Tinubu’s administration was considering reinstating petrol subsidy could unsettle financial markets, raise borrowing costs and worsen economic pressures on households.

“In all the meetings I have had, I came to a conclusion that the markets, including the domestic market, which you can read from the capital market, and the international market, have largely written off the opposition in Nigeria as being unserious,” he said.

Oyedele warned that any indication of a possible return to subsidy would trigger an immediate market reaction, putting further pressure on the naira and increasing the cost of living.

“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately.

“Airfares would struggle, the naira would come under severe pressure, potentially moving towards 3,000, 3,500 or even 4,000. The very fuel people want subsidised would become far more expensive in naira terms,” he stated.

He added that capital flight could extend beyond foreign investors, with wealthy Nigerians, business owners and middle-class investors potentially turning to the dollar to protect their assets against uncertainty.

According to him, such a shift would increase demand for foreign exchange and place additional pressure on the naira.

The minister also dismissed suggestions that the Nigerian National Petroleum Company Limited’s temporary reduction in petrol retail margins amounted to a return to subsidy.

He explained that the reduction was a commercial decision and not a payment funded by public resources.

Oyedele argued that a company’s decision to reduce its profit margin to make a product more affordable should not automatically be classified as a subsidy.