The International Monetary Fund (IMF) has advised the Nigerian government to ensure that fuel subsidy savings, reportedly withheld by the Nigerian National Petroleum Company Limited (NNPC), are fully returned to the national treasury.

In its 2025 Article IV report released on Wednesday, the IMF noted that although the government officially ended fuel subsidies in 2023, the expected financial benefits—estimated at about N700 billion per month, or 2% of GDP annually—have not been reflected in the federal budget due to a lack of transparency in oil revenue remittances.

The IMF warned that unless these funds are recovered in the second half of 2025, the government may need to cut spending to stay on track with its fiscal goals. With new tax reforms unlikely to generate significant revenue this year, the IMF recommended trimming recurrent expenditures while safeguarding critical infrastructure projects and expanding targeted support to the poorest households.

It emphasized that redirecting subsidy savings into public coffers is essential to maintaining a stable budget, supporting job-creating investments, and sustaining economic reforms. The Fund also urged the government to identify new ways of raising revenue and to prepare long-term strategies to ease fiscal pressure and reduce reliance on oil income.

The call comes at a time when Nigeria is struggling to manage rising debt service costs, limited revenues, and the urgent need for social and economic development. The IMF believes recovering the fuel subsidy funds is key to avoiding deeper cuts and ensuring long-term financial stability.