Naira could hit N4,000/$ if fuel subsidy returns: Finance Minister warns

The Nigerian Naira could hit as low as N4,000 to the Dollar if petrol subsidies are restored, Finance Minister Taiwo Oyedele has warned.

The minister made the remark while speaking at a press briefing after the International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, on Monday, October 19. 

He outlined that the Naira could drop to as low as N3,000, N3,500 and N4,000 per dollar while also noting that even a signal that the government is considering a return to subsidy would be enough to unsettle financial markets. He stressed they were a warning, not a confirmed forecast.

Stating that foreign and local investors would not wait for a formal announcement, he said: "If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately."

Oyedele explained that the signal alone could prompt foreign investors to pull funds out of Nigeria. Local business owners and wealthy Nigerians could also convert savings into dollars as a hedge. That surge in demand for foreign exchange would put direct pressure on the naira.

A weaker naira would raise the cost of imported goods and petroleum products. That would add to inflationary pressure and squeeze household budgets already stretched by high living costs since the subsidy was removed in May 2023.

The warning puts the subsidy debate at the centre of naira stability. Any policy reversal would likely quicken dollar demand and weaken the currency, with knock-on effects for importers, fuel costs and consumer prices. For businesses, the risk is a fresh round of exchange rate volatility before any formal policy shift.