The Centre for the Promotion of Private Enterprise (CPPE) has urged the Federal Government to urgently implement targeted measures to cushion the impact of rising petrol prices on households and businesses across the country.
The CPPE said the interventions should focus on transportation, logistics, electricity supply, food security, healthcare, education and social protection, arguing that targeted support would be more effective and fiscally sustainable than returning to a universal fuel subsidy regime.
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The recommendation was contained in a policy brief issued on Sunday by the Chief Executive Officer of the CPPE, Dr Muda Yusuf, following the recent increase in petrol prices from N1,300 to N1,430.
Yusuf acknowledged that the latest increase would further increase pressure on consumers and businesses but maintained that restoring the fuel subsidy would reverse reforms and impose additional strain on government finances.
He said the government should instead ensure that resources freed by the removal of the subsidy translated into tangible benefits for citizens through improved infrastructure and public services.
“Citizens must see tangible benefits through improved public transportation, electricity, healthcare, education, food security, infrastructure and social protection,” he said.
According to Yusuf, the focus of the fuel subsidy debate should now shift from its restoration to fiscal accountability and the effective deployment of resources generated by the reform.
“The issue is increasingly one of fiscal accountability and expenditure quality.
Federal, state and local governments must demonstrate transparently how the additional fiscal resources arising from the reform are improving economic and social outcomes,” he said.
Yusuf called for increased investment in mass transit systems, affordable public transportation, rail freight infrastructure and logistics networks to reduce transportation costs and moderate inflationary pressures.
He also urged the government to accelerate the deployment of Compressed Natural Gas (CNG), solar energy and other distributed energy solutions to reduce the reliance of households and businesses on petrol-powered energy sources.
The CPPE chief further called for targeted support for vulnerable households and productive enterprises, particularly micro, small and medium-sized enterprises (MSMEs), which he said continue to face rising operating costs.
He advocated measures to reduce energy, logistics and financing costs for businesses, saying such interventions would strengthen competitiveness and help sustain economic activity.
On food security, Yusuf urged the government to increase investment in irrigation, rural infrastructure, agricultural logistics and other productivity-enhancing initiatives to boost domestic food production and moderate food inflation.
He said all tiers of government should share responsibility for implementing measures to cushion the impact of rising petrol prices.
“The CPPE recognises that the current petrol-price escalation presents a serious cost-of-living, inflation and competitiveness challenge requiring urgent intervention.
“However, restoring the pre-reform universal subsidy regime is neither fiscally sustainable nor economically prudent. The appropriate policy direction is to preserve the downstream petroleum reforms while aggressively mitigating their social and economic costs.”
Yusuf also called for greater transparency in the management of additional revenues accruing to the federal, state and local governments following the removal of the subsidy.
He said making the benefits of the reform more visible through improved infrastructure, enhanced public services and productive investments would help build public confidence in the policy.
According to him, the national conversation should move beyond whether fuel subsidies should be restored and focus on how the gains from the reforms can be converted into lasting economic benefits.
“The more consequential issue is how Nigeria can convert the gains of the reform into lower structural costs, stronger domestic production, improved competitiveness, greater energy security and measurable improvements in citizens’ welfare.
“That is the pathway to making the reform economically sustainable and socially defensible,” he said.
The CPPE’s position comes amid renewed debate over the economic and social consequences of fuel subsidy removal, particularly as rising petrol prices continue to affect transportation costs, business operations and household expenses.
Last month, the Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, said Nigeria’s fuel subsidy bill could have risen to about N53 trillion, with the naira potentially weakening to around N3,500 to the dollar, if the subsidy regime had been retained.
Speaking during an interview on Channels Television, Adedeji said the subsidy regime was unsustainable because the government effectively borrowed money to purchase petrol at higher prices before selling it to consumers below cost.
He argued that retaining the subsidy would have placed severe pressure on public finances and heightened the country’s fiscal risks.
President Bola Tinubu has repeatedly defended the removal of petrol subsidy, describing the policy as necessary to avert a fiscal crisis and restore macroeconomic stability.
Tinubu has said the reform freed government resources for development priorities and created the foundation for broader economic reforms, although Nigerians have continued to bear the short-term effects through higher transportation and living costs.
The President has also pointed to improvements in sectors such as agriculture as evidence of the longer-term benefits of the reform programme.