Economists and stakeholders in Nigeria’s petroleum sector have weighed in on the ongoing debate over fuel subsidy amid volatility in the prices of Premium Motor Spirit, PMS, and other petroleum products.
It was reported that the presidential candidate of the African Democratic Congress, ADC, and former Vice President, Atiku Abubakar, recently reignited the debate over fuel subsidy after declaring that he would restore the policy if elected president in 2027.
Atiku proposed the return of fuel subsidy as part of his economic recovery plan for Nigeria.
According to him, his proposal is based on subsidising fuel from crude oil production rather than refined petroleum product imports.
Atiku’s stance represents a major shift from his earlier position since 1999, when he advocated the removal of fuel subsidy.
The ADC presidential candidate’s position has stirred reactions from the incumbent administration of President Bola Ahmed Tinubu and other opposition leaders.
It was reported that President Tinubu’s first major policy announcement after assuming office on May 29, 2023, was the removal of fuel subsidy, which became widely associated with his remark, “fuel subsidy is gone.”
The policy took effect immediately, with attendant economic effects, as petrol pump prices rose significantly, contributing to higher inflation and increased living costs.
It was reported-+ that petrol prices rose from a national average of N545 per litre to between N1,230 and N1,299 per litre in Abuja and its environs as of August 24, 2026.
Three years after the removal of fuel subsidy, the Tinubu administration said the country saved N15.8 trillion from the policy between June 2023 and December 2025.
According to the Minister of Finance, Taiwo Oyedele, the Federal Government, states and local governments received N5.43 trillion, N6.52 trillion and N3.88 trillion, respectively, from funds mobilised through fuel subsidy removal.
He, however, noted that during the period under review, the Tinubu administration incurred additional expenditure of N30.64 trillion on wage adjustments, debt, infrastructure and electricity subsidies.
Meanwhile, Atiku criticised the Tinubu administration’s breakdown of fuel subsidy removal savings as unsatisfactory, insisting on the return of the policy if elected president.
However, the presidential candidate of the Nigeria Democratic Congress, Peter Obi, disagreed with Atiku over the return of fuel subsidy.
Speaking at the Nigerian Bar Association conference in Rivers State on Monday, the former Anambra State governor said the savings from subsidy removal had been mismanaged by the Tinubu administration.
“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.
Economists and stakeholders in the oil and gas sector, in separate interviews, provided fresh perspectives and shared their positions on the fuel subsidy debate.
Don’t return to blanket fuel subsidy – Oyedokun
Professor of accounting and economist, Godwin Oyedokun, while reacting, urged the Federal Government to focus on targeted subsidies for vulnerable Nigerians and productive sectors rather than returning to blanket fuel subsidy.
Oyedokun said the debate over fuel subsidy should go beyond the politics of the 2027 general elections, noting that while the return of subsidy could provide immediate relief to Nigerians, it could also recreate the fiscal challenges associated with the policy.
According to him, Atiku’s proposal could lead to lower costs of petrol, transportation and food in the short term.
However, he warned that a blanket subsidy could bring back the fiscal burden, leakages, smuggling and corruption that contributed to the unsustainability of the former subsidy regime.
“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,” he told in an interview on Monday.
Oyedokun said the central issue should not be whether Nigeria should have fuel subsidy or not, but how the government can cushion the impact of reforms on vulnerable citizens.
“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 stressed that Nigerians should not have to choose between economic stability and affordable living standards.
He said the success of the Tinubu administration’s fuel subsidy removal should ultimately be measured by whether the sacrifices Nigerians are making translate into improved 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 also urged political parties preparing for the 2027 elections to present voters with clear, costed and transparent energy policies.
He cautioned against turning fuel subsidy into an electoral slogan, saying Nigerians deserve to understand how each party intends to address fuel affordability while maintaining fiscal sustainability.
“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.
Fix Nigerian refineries, not fuel subsidy return – IPMAN
The spokesperson of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chinedu Ukadike, said the debate over fuel subsidy should focus on the revival of Nigeria’s refineries, including the Port Harcourt, Warri and Kaduna refineries.
Ukadike said restoring the country’s refineries and petroleum infrastructure would boost competition and help reduce petrol price volatility.
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 further advised Atiku to focus on reviving Nigeria’s domestic refining capacity rather than advocating for the return of fuel subsidy.
“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 told.
Fuel subsidy return means lack of love for Nigeria – PETROAN president
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Billy Gillis-Harry, also criticised calls for the return of fuel subsidy, describing the policy as a “loss of opportunity” for Nigeria.
Gillis-Harry said previous administrations borrowed nearly N2 trillion to fund fuel subsidies instead of investing the funds in human capital and national development.
According to him, the subsidy regime deprived Nigeria of resources that could have been deployed to develop the country.
“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 was discussed by all presidential candidates ahead of the 2023 election.
He argued that any attempt to restore the subsidy would undermine Nigeria’s interests.
“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 the government would finance a proposed reduction of petrol prices to N500 per litre.
“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.
