For millions of Nigerians, the renewed call by former Vice President Atiku Abubakar for the restoration of petroleum subsidy resonates less as a political promise and more as a reflection of their daily economic reality. More than three years after President Bola Tinubu removed the fuel subsidy as part of sweeping economic reforms, many citizens say they are yet to experience the promised dividends. While the Federal Government points to improved fiscal revenues, increased allocations to states, and greater investment in infrastructure, these macroeconomic gains have not translated into tangible improvements in the lives of ordinary Nigerians. Instead, the cost of living has continued to soar, with food prices reaching unprecedented levels and basic necessities becoming increasingly unaffordable for millions of households. Beyond rising inflation, insecurity has compounded the hardship. Widespread kidnapping for ransom and persistent attacks by bandits have forced many farmers off their lands, disrupting food production and contributing to higher food prices. In several rural communities, criminal groups reportedly impose illegal taxes on residents, further weakening economic activities. At the same time, many Nigerians argue that the transport, education and healthcare sectors remain in poor condition despite the resources the government says have been freed by subsidy removal. Against this backdrop, Atiku’s proposal has found support among citizens who believe that the reforms have imposed enormous sacrifices without delivering corresponding improvements in their standard of living.
By Gideon Osaka
Between Relief for Citizens and Fiscal Sustainability
When former Vice President Atiku Abubakar unveiled his proposal for a new petroleum subsidy model, he reignited one of Nigeria’s most contentious economic debates. Three years after President Bola Tinubu removed the petrol subsidy, a decision that fundamentally reshaped the country’s fiscal architecture, Atiku’s promise to restore a modified subsidy has become a defining policy issue ahead of the next general election.
His proposal is not a return to the old subsidy regime. According to his policy presentation, Atiku advocates a targeted model that caps production costs, strengthens transparency across the oil value chain, and tracks every barrel produced in Nigeria. The proposal is designed, according to him, to ensure Nigerians benefit from the country’s oil wealth without recreating the corruption that characterised previous subsidy arrangements.
The announcement immediately attracted fierce criticism from the Presidency, prompted a detailed defence of the Tinubu administration’s reforms by the President’s media Aids, generated nuanced analysis from petroleum economists and other stakeholders in the country, and divided Nigerians who remain burdened by the high cost of living.
The debate has evolved beyond whether subsidy should exist. It now revolves around a more fundamental question: can Nigeria make fuel affordable without undermining public finances?
Atiku’s Alternative Model
Rather than advocating an unrestricted subsidy, Atiku argues that Nigeria should leverage domestic refining capacity and greater transparency in crude production to reduce fuel prices.
His proposal centres on production-cost controls, monitoring crude output, eliminating leakages across the petroleum value chain, and ensuring subsidy benefits reach consumers rather than intermediaries. The approach seeks to distinguish itself from the previous subsidy system that was widely criticised for fraud, inflated claims and opaque payments.
Supporters argue that with the Dangote Refinery now operational and additional local refining capacity emerging, Nigeria has an opportunity to design a more efficient pricing mechanism than existed before 2023.
Critics, however, question whether such a system can exist without imposing high fiscal costs.
Presidency: A Return to an Unsustainable Past
The strongest response came from the Presidency through a State House press statement signed by Presidential Adviser on Information and Strategy, Bayo Onanuga.
The Presidency described Atiku’s proposal as a “volte-face” from his earlier support for subsidy removal and argued that it represented political expediency rather than sound economics. It maintained that the former vice president had abandoned his previous position simply to gain electoral advantage.
According to the Presidency, the Petroleum Industry Act effectively ended petrol subsidies by June 2023, making any restoration more than a political declaration.
It argued that bringing back subsidy would require significant legal amendments, fresh fiscal arrangements and a completely new administrative framework.
The government also challenged what it called misconceptions surrounding subsidy savings.
Officials argued that subsidy was never money sitting in government accounts but rather represented the difference between the actual landing cost of petrol and the regulated selling price. Consequently, they dismissed claims of trillions of naira in accumulated subsidy savings as misleading.
Domestic Refining Has Changed the Equation
One of the Presidency’s strongest arguments concerns the transformation of Nigeria’s downstream petroleum sector.
Before subsidy removal, Nigeria relied almost entirely on imported petrol. Today, officials say, domestic refining capacity led by the Dangote Refinery has significantly altered market realities.
The government argues that restoring subsidy would discourage local refining investments, weaken smaller modular refineries, increase dependence on imports and reverse gains in foreign exchange conservation.
The Presidency further contends that subsidy removal has enabled Nigeria to evolve from being primarily an importer of refined petroleum products into an exporter, strengthening energy security and industrial development.
The Fiscal Argument
The government’s central case remains financial sustainability.
According to the State House, selling petrol below market cost would inevitably require someone to absorb the difference.
Officials estimate the current economic cost of petrol at between N1,200 and N1,300 per litre and argue that any reduction in pump prices would either reduce allocations to federal, state and local governments or increase public borrowing.
The Presidency therefore insists that Nigerians deserve answers to critical questions:
Who will finance the subsidy? How much will it cost annually? Will the government borrow to fund it? How will abuse be prevented? What exactly would be subsidised under a domestic refining regime? These questions, it argues, must be answered before any promise of subsidy restoration can be considered credible.
Information Minister Defends the Reforms
Information Minister Mohammed Idris reinforced the government’s position.
In a separate intervention, Idris argued that the removal of petroleum subsidies had created significant fiscal space, allowing governments at all levels to spend more on infrastructure, education, healthcare, and social investments.
He cited official figures indicating that between June 2023 and December 2025, approximately N15.8 trillion in additional fiscal resources became available across the federation.
According to the minister, about N5.43 trillion accrued to the Federal Government, N6.52 trillion to states and N3.88 trillion to local governments. He stressed that these were not idle cash savings but resources made available within the federation’s fiscal framework.
Idris also linked the reforms to increased spending on transport infrastructure, housing, agriculture, social investment programmes, student loans, consumer credit and wage obligations.
He argued that reversing subsidy removal would jeopardise these investments while discouraging investor confidence and threatening fiscal stability.
Prof. Wumi Iledare Calls for Evidence, Not Politics
Petroleum economist Prof. Wumi Iledare adopted a more balanced position. Rather than endorsing either camp, he argued that the debate should focus on petroleum economics instead of political rhetoric. According to him, subsidy itself is neither inherently good nor bad.
The crucial issue is whether subsidising petrol consumption represents the most efficient, equitable and fiscally sustainable way of protecting citizens from high energy costs.
He noted that subsidy removal has genuine welfare costs. Higher fuel prices increase transportation costs, food inflation and production expenses across the economy.
However, he also warned that fiscal savings only benefit citizens when they are transparently converted into infrastructure, productive investment and effective social protection.
Prof. Iledare further argued that domestic refining alone cannot automatically deliver cheap petrol because crude oil retains its international opportunity cost while refining, financing, logistics and distribution expenses remain significant components of final pricing.
Instead of universal subsidy, he suggested alternatives including targeted transport support, wider adoption of compressed natural gas (CNG), investment in public transportation and carefully designed social protection programmes.
Perhaps most significantly, he challenged both sides. If Atiku proposes subsidy restoration, he argued, Nigerians deserve a transparent fiscal model.
If the Tinubu administration defends subsidy removal, Nigerians equally deserve transparent accounting showing how the fiscal gains have translated into measurable improvements in public welfare.
Nigerians Remain Divided
Public reaction reflects the difficult economic realities confronting millions of Nigerians.
Some citizens believe subsidy removal has deepened poverty despite the government’s macroeconomic gains.
Others question whether improved fiscal indicators matter if households continue to struggle with rising food prices, transportation costs and declining purchasing power.
Among comments captured following the debate, several Nigerians argued that the removal of subsidy has worsened living conditions, while others challenged the government to answer a simple question: were ordinary Nigerians better off before subsidy removal than they are today? These reactions underline the political sensitivity of fuel pricing in Nigeria.
The Bigger Policy Challenge
The subsidy debate ultimately reflects competing visions of economic management. Supporters of restoration argue that government should shield citizens from high energy costs in an oil-producing nation.
Opponents insist that subsidising consumption diverts scarce public resources from education, healthcare, infrastructure and long-term development while encouraging inefficiency and corruption.
Between these positions lies a growing consensus among many economists that Nigeria needs targeted rather than universal support.
Such an approach would focus assistance on vulnerable households, improve public transportation, expand CNG adoption and strengthen social protection while allowing market pricing to encourage investment in domestic refining.
Looking Ahead
As political campaigns intensify, fuel subsidy is likely to remain a defining campaign issue. Atiku’s proposal has reopened a conversation many believed had been settled after the 2023 reforms. Whether Nigerians embrace his alternative model may depend less on campaign rhetoric than on detailed answers to practical questions about funding, implementation and accountability.
For the Tinubu administration, defending subsidy removal will require more than citing fiscal gains. It will increasingly depend on convincing Nigerians that the resources released by reform are translating into tangible improvements in living standards.
For voters, the debate is no longer simply about whether petrol should be cheaper. It is about choosing between competing economic philosophies: one prioritising immediate consumer relief and the other emphasising fiscal sustainability and long-term structural reform.
At bottom, the renewed support for Atiku Abubakar’s subsidy proposal is driven as much by public distrust as by economic hardship. For many Nigerians, the debate is no longer simply about whether fuel should be subsidised; it is about confidence in government. While the Tinubu administration insists that the petrol subsidy ended in 2023 and has highlighted the fiscal benefits of the reform, many citizens remain unconvinced because they say they have not seen corresponding improvements in their daily lives. Persistent inflation, rising transportation costs, widespread poverty and deteriorating public services have reinforced the perception that the sacrifices demanded of Nigerians have yielded little tangible benefit.
Adding to the scepticism are recurring reports alleging that subsidy-related payments have continued even after the government declared the subsidy regime abolished. Although the government has offered explanations for some of these reports, their emergence has fuelled public suspicion and raised questions about transparency and accountability in the management of the downstream petroleum sector. For many Nigerians, these reports have created the impression that while citizens continue to bear the burden of higher fuel prices, the financial practices associated with subsidy have not been completely eliminated.
Government Moves to Ease Transport Burden
Perhaps recognising the growing public dissatisfaction over the high cost of living, the Tinubu administration has announced a fresh initiative aimed at reducing transportation costs, one of the most visible consequences of fuel subsidy removal. President Bola Tinubu recently disclosed that the Federal Government and governors elected on the platform of the All Progressives Congress (APC) have agreed to work towards lowering intra-state transport fares from October 1, 2026, by leveraging the lower operating costs of Compressed Natural Gas (CNG) and electric vehicles. A joint Federal-State implementation committee has also been established to drive the initiative.
According to the President, vehicles powered by CNG consume between 60 and 80 per cent less fuel than those running on petrol, and the government wants these savings passed directly to commuters through lower fares. He disclosed that more than 120,000 vehicles have already been converted to CNG nationwide, while over 100,000 additional conversion kits are being processed. The Federal Government is also expanding conversion centres and plans to increase the number of CNG refuelling stations to 1,000 across the country.
The announcement is widely seen as part of the administration’s broader strategy to demonstrate that the long-term benefits of subsidy removal are beginning to materialise. Transportation accounts for a significant portion of household spending and directly influences the prices of food and other goods. A reduction in transport fares could therefore help moderate inflationary pressures if fully implemented.
However, many Nigerians remain cautiously optimistic. Similar promises of palliative measures and economic relief have been made since subsidy removal in 2023, but many citizens say they have yet to experience meaningful improvements in their daily lives. Analysts also note that the success of the October 1 target will depend on the availability of CNG-powered vehicles, adequate refuelling infrastructure, state government commitment, and whether transport operators actually transfer lower operating costs to commuters. Until commuters begin paying less at bus stops and transport terminals, many Nigerians are likely to judge the initiative by its implementation rather than its promise.
Whether these perceptions are entirely accurate or not, they underscore a broader challenge facing the government: restoring public trust. As the subsidy debate gathers momentum ahead of another election cycle, the contest may ultimately be decided not only by competing economic proposals but also by which side can more convincingly demonstrate transparency, accountability and a credible pathway to improving the welfare of ordinary Nigerians.
Whichever argument prevails, the petroleum subsidy debate remains a test of Nigeria’s ability to balance social welfare with economic discipline in an era of changing energy realities.
