By Peace Erewunmi

The Centre for the Promotion of Private Enterprise (CPPE) has warned that restoring petrol subsidy in Nigeria could cost the country about ₦20 trillion annually.

The organisation said a return to broad-based petrol subsidies would place a significant financial burden on the Federal Government and could reverse some of the gains associated with the removal of the subsidy.

CPPE argued that instead of returning to the previous subsidy regime, the government should focus on policies that increase domestic refining capacity, improve petroleum supply and reduce the cost of production and distribution.

The warning comes amid renewed public debate over petrol prices and the economic pressure faced by households and businesses across the country.

Supporters of subsidies have continued to argue that government intervention could provide immediate relief for Nigerians by lowering the pump price of petrol and reducing transportation costs.

However, critics of the policy have consistently pointed to the enormous fiscal cost of subsidising consumption, arguing that the funds could instead be directed towards infrastructure, healthcare, education and targeted support for vulnerable Nigerians.

CPPE’s latest position adds to the ongoing debate over whether Nigeria should maintain its post-subsidy market approach or introduce some form of government intervention to make petrol more affordable.

The organisation’s estimated ₦20 trillion annual cost is a projection attributed to CPPE and should be understood in the context of its warning about the potential fiscal impact of restoring petrol subsidy.