Could a ₦500 Petrol Price Be Sustained Through Targeted Subsidy?

In December 2025, petrol reportedly sold for about ₦740 per litre when crude oil was around $60 per barrel, close to the federal budget benchmark. If petrol were sold at ₦500 per litre, the estimated subsidy would be about ₦250 per litre. At daily consumption of 50 million litres, this would amount to roughly ₦12.5 billion daily, or about ₦4.5 trillion to ₦5 trillion yearly. That cost is presented as less than 10% of the budget and as an opportunity cost the government could accept to ease pressure on households and businesses. The argument is that when crude prices rise, the government may earn less surplus rather than necessarily face a higher subsidy bill. A lower pump price could cushion inflation and support economic activity. The key question is whether this level of spending is too high for government to bear in order to protect Nigerians from rising living costs.

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