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Economists and key players in Nigeria’s petroleum industry have offered differing views on the renewed debate over fuel subsidy, as petrol prices continue to fluctuate across the country.

The controversy was reignited after the presidential candidate of the African Democratic Congress, ADC, Atiku Abubakar, pledged to restore fuel subsidy if elected president in 2027.

Atiku said his proposed approach would involve subsidising petrol from crude oil production rather than relying on subsidies for imported refined petroleum products.

The former Vice President’s position marks a departure from his earlier stance, dating back to 1999, when he supported the removal of fuel subsidy.

His proposal has since attracted reactions from the Federal Government and opposition politicians.

President Bola Ahmed Tinubu removed the petrol subsidy shortly after assuming office on May 29, 2023, announcing that “fuel subsidy is gone.”

The decision immediately triggered a sharp increase in petrol prices, with the resulting rise in transportation costs contributing to higher inflation and increased pressure on household finances.

Petrol prices, which averaged about N545 per litre nationally before the removal, had risen to between N1,230 and N1,299 per litre in Abuja and neighbouring areas as of August 24, 2026.

The Tinubu administration has maintained that the policy has generated substantial savings for government.

According to the Minister of Finance, Taiwo Oyedele, Nigeria saved N15.8 trillion from the removal of fuel subsidy between June 2023 and December 2025.

Oyedele said the Federal Government, state governments and local councils received N5.43 trillion, N6.52 trillion and N3.88 trillion respectively from funds generated through the policy.

He also disclosed that the administration incurred an additional N30.64 trillion during the same period on areas including wage adjustments, debt, infrastructure and electricity subsidies.

Atiku, however, rejected the government’s explanation of the savings, describing the breakdown as inadequate and maintaining that subsidy should be restored if he becomes president.

The presidential candidate of the Nigeria Democratic Congress, Peter Obi, has taken a different position.

Speaking at the Nigerian Bar Association conference in Rivers State on Monday, the former Anambra State governor said subsidy removal was necessary but criticised the government for allegedly mismanaging the proceeds.

“I subscribe and maintain that you need to remove subsidy. Mismanagement of the proceeds shouldn’t be the reason for not removing it,” he said.

Against this backdrop, economists and petroleum sector stakeholders have provided their assessments of the renewed subsidy debate.

Targeted intervention better than blanket subsidy – Oyedokun

Professor Godwin Oyedokun, an accounting professor and economist, advised the Federal Government against returning to a blanket fuel subsidy system.

He instead recommended targeted interventions aimed at vulnerable Nigerians and productive sectors of the economy.

Oyedokun said the issue should be considered beyond the politics of the 2027 elections, noting that while restoring subsidy could offer immediate relief, it could also recreate the financial difficulties associated with the previous regime.

He acknowledged that Atiku’s proposal could reduce petrol, transportation and food costs in the short term.

However, he warned that a blanket subsidy could once again create a huge fiscal burden while encouraging leakages, smuggling and corruption.

“President Tinubu’s continuation of subsidy removal has the potential to improve government finances and create resources for infrastructure and social investment.

“The problem is that Nigerians who have borne the pain of higher fuel and transport costs are yet to see a sufficiently clear and measurable social dividend from the savings,” said in an interview on Monday.

According to Oyedokun, the key question should be how government can protect vulnerable citizens from the impact of economic reforms rather than simply choosing between subsidy and no subsidy.

“Therefore, the real issue is not simply subsidy or no subsidy. Government should subsidise vulnerable Nigerians and productive sectors rather than indiscriminately subsidising petrol.

“Savings from subsidy removal should be transparently channelled into mass transportation, electricity, healthcare, education and targeted social protection,” he added.

The economist maintained that economic stability should not come at the expense of Nigerians’ standard of living.

He said the ultimate measure of the subsidy reform should be whether the sacrifices being made by citizens eventually produce better living conditions.

“Nigerians should not be forced to choose between economic stability and affordable living.

“The real test of the Tinubu reform is whether the sacrifices Nigerians are making today will translate into a better standard of living tomorrow,” he said.

Oyedokun further urged political parties preparing for the 2027 election to provide Nigerians with detailed and properly costed energy policies.

He warned against reducing the subsidy debate to an electoral campaign slogan.

“Ahead of 2027, political parties should present Nigerians with clear, costed and transparent energy policies rather than use fuel subsidy merely as an electoral slogan,” he said.

Refineries should be revived, says IPMAN

Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, IPMAN, said the focus should be on restoring Nigeria’s refineries and petroleum infrastructure rather than bringing back fuel subsidy.

He specifically mentioned the Port Harcourt, Warri and Kaduna refineries, arguing that their revival would increase competition and help stabilise petrol prices.

Ukadike also called for the restoration of pipelines and the 21 petroleum depots across the country.

According to him: “All these things are negative. The issue before this President is the restoration of all the refineries that are working in Nigeria. The restoration and revival of all the pipelines.

“The restoration and revival of the 21 depots in Nigeria.

“Whether we remove subsidy or not does not arise because competition will calm down the price volatility and reduce price drastically.

“Not only will it drive competition, it will also reduce the dependency of exports on dollar exchange.”

Ukadike also urged Atiku to reconsider his position and focus on increasing domestic refining capacity.

“I also believe that Atiku Abubakar should also do some homework and understand that it is not bringing back subsidy that is our problem. Get the refinery to work again,” he said.

PETROAN president rejects calls for subsidy return

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Billy Gillis-Harry, also opposed proposals to restore fuel subsidy.

He described the previous subsidy regime as a “loss of opportunity” for Nigeria, arguing that government resources were diverted toward financing petrol subsidies instead of being invested in human capital and national development.

Gillis-Harry said previous administrations borrowed almost N2 trillion to sustain the subsidy regime.

“The subsidy that we were operating under all the administrations was a stark loss of opportunity for the future of Nigeria.

“How? So, we were borrowing nearly N2 trillion to pay subsidy, not to develop Nigeria, not to develop human capacity, not to do anything, prior to the President’s arrival on the 29th of May, 2023.

“And for a man who was ready for the job, he declared subsidy is gone. And it is gone to today,” he said.

The PETROAN president noted that subsidy removal had been discussed by presidential candidates during the 2023 election campaign.

He argued that reversing the policy would not be in Nigeria’s interest.

“Now, subsidy removal was a subject of discussion by all the presidential candidates. So, if there is a reason why any one of them is thinking to say subsidy will be brought in the back, it shows that they don’t love Nigeria. They don’t love Nigeria,” Gillis-Harry said.

He also questioned how a government seeking to reduce petrol prices to N500 per litre would finance such a policy.

“Where is he going to get the money to reduce it to N500 per litre? So, he’s going to go back and go to China and get a loan of a billion dollars,” he said.

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