Tinubu Govt Blames Rising Poverty on Fuel Subsidy Removal

The Federal Government has defended the removal of petrol subsidy, admitting that the policy pushed more Nigerians into poverty in the short term but insisting it was a necessary step to rescue the country’s economy from what it described as years of “fiscal illusion.”

Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, made the remarks on Thursday at the Seventh Africa Emerging Markets Forum in Abuja. His comments were contained in a series of videos shared on X by the Special Adviser to the President on Information and Strategy, Bayo Onanuga.

According to Oyedele, the administration of President Bola Tinubu was aware that ending the subsidy would have immediate economic consequences for millions of Nigerians, but maintained that the policy was essential to place the country on a sustainable fiscal path.

“You cannot remove subsidy and expect people to become richer,” he said. “Reform is a reset because we were living in fiscal illusion. We needed to stop deceiving ourselves so the country could move forward.”

He explained that the decision inevitably reduced household purchasing power, leading to an increase in poverty levels. However, he argued that the reforms were beginning to yield positive results, citing improvements in Nigeria’s economic indicators.

Oyedele said Nigeria recorded nearly 10 per cent growth in real per capita income in dollar terms in 2025, describing it as one of the fastest rates of improvement among countries working to reduce poverty.

“That reset meant that income levels, in real terms, would fall and that would increase poverty. But the good news is that the numbers for 2025, in dollar terms, show real per capita income growth of nearly 10 per cent. We intend to sustain that,” he said.

He added that the Tinubu administration has no intention of reversing the fuel subsidy removal, insisting that maintaining the reform is critical to preserving the gains already recorded and ensuring long-term economic stability.