The debate over petrol subsidy removal has erupted into a pro-poor storm of ideas ahead of the 2027 presidential election, with former Vice President and the African Democratic Congress (ADC) presidential candidate, Atiku Abubakar defending a targeted subsidy intervention to ease the burden of high fuel and living costs, while economists and energy experts reject a return to the old regime but demand that savings from subsidy removal be transparently channelled into healthcare, education, roads, electricity, domestic refining and other measures that directly improve the lives of Nigerians.
The renewed controversy followed Atiku’s declaration that, if elected president in 2027, his administration would restore a form of petrol subsidy aimed at lowering energy costs and easing the burden of high fuel prices on Nigerians.
While the Presidency dismissed the proposal as evidence of economic ignorance and a desperate political manoeuvre, Atiku has fired back at President Bola Tinubu, accusing his administration of removing petrol subsidy without adequate safeguards for citizens while failing to provide sufficient transparency over the savings generated.
Atiku, through his Senior Special Assistant on Public Communication, Phrank Shaibu, argued that his proposal was not a return to the allegedly corrupt and open-ended subsidy regime of the past, but a targeted, capped, budgeted and independently audited production-support mechanism tied to domestic refining.
At the same time, energy experts who spoke to THISDAY opposed a return to the old subsidy structure, warning that it was fiscally unsustainable and had encouraged corruption and the collapse of Nigeria’s refineries.
They, however, faulted the manner in which the subsidy was removed and urged the federal government to ensure that the savings are transparently channelled into healthcare, education, electricity, roads, public transportation, social protection and domestic refining.
Dattijo Kabir Muh’d, a legally trained scholar of Islamic law, Northern Nigerian history, and Hausa culture, wrote on Facebook: “Atiku has changed the trajectory of the campaign. He has put the APC on the defensive. Even if he is lying, he has hit the APC hard. He has now successfully gained the attention of the poor.
“With the effects of subsidy removal, the APC needs more than oral defence. They must ensure that the poor start to see real changes before the elections. If nothing changes, the poor will never be convinced by oral defence.
“I think this will be hotter than we expected. Atiku is surrounded by geniuses. Bayo is now sleepless, sharing every post that tends to support subsidy removal. It is beginning to get interesting.”
The Centre for Promotion of Private Enterprise (CPPE) warned that restoring petrol subsidy in whatever form could undermine investment in private refineries and send conflicting signals to investors.
The Allied Peoples’ Movement (APM) challenged the federal government’s reported N15.8 trillion subsidy-removal savings figure, insisting that the savings exceeded N27 trillion and demanded a detailed account of the funds.
Former Vice President Fires Back at Tinubu
Atiku, in a statement issued by Shaibu, strongly rejected Tinubu’s criticism of his subsidy proposal, arguing that the economic circumstances that existed when the subsidy was removed in 2023 had changed significantly.
He accused the administration of imposing simultaneous fuel-price, exchange-rate and cost-of-living shocks on Nigerians, saying the resulting hardship could not be presented as evidence of successful economic reform.
According to him, increased government revenues and higher allocations from the Federation Account cannot be considered a sufficient measure of economic progress when households and businesses continue to struggle with rising costs.
Atiku argued that the administration should be judged by improvements in the living standards of Nigerians rather than by the size of government revenues.
He also challenged the federal government to explain what happened to the savings generated from subsidy removal, arguing that Nigerians had yet to see sufficient evidence of the benefits of the policy.
Atiku maintained that his proposed intervention would be fundamentally different from the previous subsidy regime.
He said the policy would be “targeted, capped, budgeted, time-bound and independently audited,” with support tied to domestic production and safeguards against arbitrage.
He also questioned the continued appearance of energy-security costs and petroleum under-recoveries in the accounts of the Nigerian National Petroleum Company Limited (NNPCL), despite the government’s position that petrol subsidy had been removed.
Atiku cited figures he said were contained in NNPC’s audited accounts, including approximately N17.5 trillion in energy-security costs and petroleum under-recoveries, comprising about N7.13 trillion classified as energy security and N8.67 trillion in under-recoveries.
He asked why such costs persisted if subsidy had been completely eliminated.
Atiku also criticised the argument that one of the benefits of subsidy removal was the increase in allocations to state governments through the Federation Account Allocation Committee (FAAC).
He argued that increasing allocations to governments while households faced higher transport, food and other living costs amounted to transferring financial pressure from government accounts to citizens.
He further called on the Presidency to account for what he described as approximately N30 trillion in Federation Account revenues, deductions, savings and transfers, as well as the N12.8 trillion Service-Wide Vote contained in the 2026 budget.
Speaking further, Shaibu maintained that Atiku was not advocating a return to the old subsidy architecture based on imported petroleum products, middlemen and unverifiable claims.
He said the Atiku Economic Recovery Plan (AERP) 2027 proposed shifting government support from imported refined products to domestic production.
Under the proposed arrangement, he explained, qualifying local refineries would receive crude at subsidised rates, refine it locally and supply the resulting products to the Nigerian market at lower prices.
Shaibu said the model would allow government to monitor the crude from allocation through refining and distribution, using technology to prevent diversion and arbitrage.
He argued that lower domestic refining costs would translate into cheaper petrol and subsequently reduce transportation, food, energy and production costs.
According to him, the proposal would therefore be a production subsidy rather than a blanket subsidy on consumption.
Atiku has also said the intervention would be capped, budgeted and independently audited, with participating refineries required to pass the benefit of preferential crude pricing to consumers.
Shaibu maintained that the proposed intervention should be assessed by its impact on the wider economy rather than simply by its fiscal cost.
He argued that lower fuel prices would reduce transportation costs, which would in turn affect the prices of food and other goods.
He also questioned how the savings from subsidy removal had been deployed, particularly in the areas of education, healthcare and employment.
Experts Reject Return to Old Regime
Despite presidential candidate’s defence, leading energy and economic experts who spoke to THISDAY rejected a return to the former petrol subsidy system.
The Group Chief Executive Officer of HSI Energies Limited and former Chairman of the Society of Petroleum Engineers (SPE) Nigeria Council, Chikezie Nwosu, said the debate should focus less on restoring subsidy and more on ensuring that the resources saved from its removal are used to improve the welfare of Nigerians.
Nwosu said the subsidy was necessary to remove because the previous system had impoverished the country while benefiting a limited number of individuals.
However, he criticised the manner in which the policy was implemented, arguing that the government should have phased the removal and allowed citizens to see tangible benefits from the savings before completing the process.
He proposed that subsidy savings should be directed towards healthcare, education, electricity, water and roads.
Nwosu also advocated a nationwide health insurance scheme under which citizens would make modest contributions while government provides support for those unable to afford healthcare.
On education, he called for grants to reduce the cost of secondary and tertiary education rather than relying heavily on student loans.
He also urged greater investment in electricity and existing road infrastructure, citing the persistent congestion on the Benin-Agbor road as an indication of the need to prioritise the rehabilitation of existing roads.
Nwosu further proposed a dedicated fund that would provide low-interest financing to local refiners to build and expand their facilities.
He said such a fund could be structured in a way that ring-fences resources for specific sectors and requires states to account for the use of any funds received.
Partner at Zera Advisory, Joe Nwakwue, also opposed a return to the old subsidy regime, but said subsidies could be deployed selectively where they produce clearly defined outcomes.
“We cannot reverse the subsidy removal,” Nwakwue said, arguing that any intervention should be targeted, time-bound and designed with an automatic exit mechanism.
He warned against returning to what he described as the poorly designed and poorly implemented subsidy system of the past.
According to him, subsidy should be tied to outcomes rather than activities and should not become an open-ended government obligation.
He nevertheless acknowledged that the removal of subsidy had imposed significant pain on Nigerians and said the government must find ways to minimise those effects.
A Fellow of the Nigerian Association for Energy Economics (NAEE), Prof. Wumi Iledare, said the central question should be whether subsidising petrol consumption remained the most efficient and equitable way to protect Nigerians from energy-price shocks.
He warned that when government sells petroleum products below their economic cost, the cost does not disappear but is ultimately borne through government revenue, taxation, borrowing or reduced expenditure on other priorities.
Iledare said any proposal to restore subsidy must clearly answer questions about the amount per litre, annual fiscal cost, funding source, monitoring mechanism and exit strategy.
He noted that while subsidy removal had increased transport, food and logistics costs, the savings should be translated into productive investments that improve living standards.
He also warned against replacing dependence on imported refined products with a domestic monopoly.
According to him, the objective should be competition rather than merely localisation, noting that a universal petrol subsidy was a blunt poverty-alleviation tool because those who consume more petrol receive more benefits.
He advocated targeted interventions including compressed natural gas (CNG), public transportation and social protection.
Teriba, Nwani Differ
Chief Executive Officer of Economic Associates, Dr Ayo Teriba, said the debate should not be reduced to a simple choice between subsidy and no subsidy.
Teriba argued that the more important questions were what was being subsidised and how the subsidy was being administered.
He warned that price subsidies could encourage wasteful consumption and lead to inefficient economic decisions.
He said government could instead provide targeted support to vulnerable Nigerians without artificially fixing the price of petrol.
An economist, Dr Vincent Nwani, however, was more categorical in opposing a return to petrol subsidy.
Nwani, argued that Atiku had not adequately explained how his proposal would work alongside the economic reforms implemented since 2023.
He warned that reversing the policy could amount to resetting the economy to the conditions that existed before May 29, 2023, with implications for wages, public finances and other areas of the economy.
According to him, Nigeria could face another round of economic shocks if the subsidy policy was reversed.
He said if he were taking over as president, he would not return to fuel subsidy but would seek alternative ways of addressing the hardship caused by its removal.
CPPE Warns of Return of Corruption
The Chief Executive Officer of the CPPE, Dr Muda Yusuf, described the proposal to restore petrol subsidy as retrogressive and potentially dangerous for the downstream petroleum sector.
Yusuf argued that the former subsidy regime had contributed to the collapse of Nigeria’s refineries and had been associated with widespread corruption.
He said it would be contradictory for government to encourage private investment in domestic refining while simultaneously reintroducing petrol subsidy.
“You cannot be talking about encouraging domestic refining and at the same time be talking about resuscitating petrol subsidy,” he said.
Yusuf urged the government to focus instead on strengthening domestic refining, attracting investment into the downstream sector and improving government revenue.
He also called for greater investment in electricity, renewable energy and electric vehicles to reduce Nigeria’s dependence on petrol.
APM Challenges N15.8trn Figure
Meanwhile, the APM has rejected the federal government’s reported N15.8 trillion figure for savings from subsidy removal, insisting that the actual savings exceeded N27 trillion.
In a statement by its National Publicity Secretary, Yusuf Abubakar, the party questioned the disparity between the N15.8 trillion figure cited by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and an earlier estimate of about $20 billion, equivalent to approximately N26.9 trillion, which the party attributed to the former finance minister.
The APM said the conflicting figures raised questions about the actual amount saved from subsidy removal and demanded that the Federal Government provide a comprehensive account.
The party also questioned the reported allocation of N5.4 trillion to the Federal Government and N10.4 trillion shared among states and local governments.
It demanded a detailed breakdown showing the amount received by each state and local government, the dates of disbursement and the specific purposes for which the funds were spent.
The party further criticised the reported use of N9.39 trillion from incremental resources generated through subsidy savings, independent revenue and borrowing for workers’ salaries and students’ loans.
The APM accused the government of failing to adequately demonstrate how subsidy-removal savings had translated into improved living conditions.
The party argued that Nigerians continued to face high living costs, unemployment and infrastructure deficits despite the increased government revenues following the reforms.
With the 2027 campaign season now underway, the subsidy debate has consequently shifted from a question of whether the policy should simply be restored or retained to a broader contest over how Nigeria should make energy affordable, protect vulnerable citizens, encourage domestic refining and ensure that the financial gains from reforms translate into measurable improvements in living standards.
Chuks Okocha , Dike Onwuamaeze, Sunday Ehigiator and Peter Uzoho
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