By Lemmy Ughegbe, Ph.D
Nigeria has returned to a debate it thought it had settled three years ago.
Petrol subsidy is again at the centre of national politics, following former Vice President Atiku Abubakar’s proposal for a new government intervention in the sector, and President Bola Tinubu’s sharp rejection of it.
Predictably, the matter is fast becoming another Tinubu versus Atiku contest ahead of 2027. Nigerians should resist that simplification.
The more useful question is this: was subsidy itself Nigeria’s problem, or was the real problem the kind of subsidy Nigeria operated?
History matters here. During the 2023 campaign, there was remarkable agreement among the three leading candidates on this contentious question.
Tinubu wanted petrol subsidy removed. Atiku wanted it removed. Peter Obi wanted it removed.
They differed over method, sequencing and how ordinary Nigerians should be protected from the shock, but none campaigned for indefinite retention of the existing regime.
Even before any of them took office, President Muhammadu Buhari’s administration had begun writing subsidy out of Nigeria’s fiscal future: the 2023 budget funded it only until June that year.
The fiscal clock was already ticking. What Tinubu did was announce its death dramatically.
At his inauguration on 29 May 2023, he declared that fuel subsidy was gone. Those four words came to define the opening phase of his Presidency. Petrol prices rose within days as NNPC adjusted pump prices.
This history matters to the argument now unfolding.
Atiku cannot credibly argue that subsidy should never have been removed. He campaigned for its removal, and once promised to do so within his first hundred days in office. Neither can Peter Obi.
The legitimate debate, then, is not principally whether subsidy should have gone. It is how it should have gone: how quickly, what should have preceded its removal, what protections should have accompanied it, and whether some carefully targeted intervention can now be justified.
The three major candidates agreed on the destination in 2023. What Nigeria never properly debated was the journey.
The old subsidy regime had become impossible to defend. It was enormously expensive, opaque and vulnerable to abuse. Nigeria subsidised imported petrol under a system in which actual domestic consumption was itself disputed, while cross-border smuggling meant taxpayers likely subsidised consumption outside the country.
Something had to change. But the manner of change matters.
Tinubu’s announcement triggered an immediate adjustment whose effects moved rapidly through the economy. Petrol became more expensive. Transport costs rose. Food prices followed. Businesses absorbed higher operating costs, and household purchasing power came under severe pressure.
Three years later, economic hardship remains a major issue as Tinubu seeks re-election. That is why Atiku’s latest proposal, which he calls the Atiku Economic Recovery Plan, deserves examination rather than instant dismissal.
Importantly, he insists he is not proposing a return to the old open-ended import subsidy regime. His plan is for a targeted, capped, budgeted, time-bound, and independently audited production-support mechanism tied to domestic refining, under which, in his words, the subsidy would “follow the barrel.” The stated aim is to raise local production while cushioning consumers from severe price shocks.
That is materially different from simply reviving the old subsidy. But different does not automatically mean workable.
The Tinubu administration is entitled to interrogate the proposal.
How much will it cost? Where will the money come from? How will government ensure that support to producers actually reaches consumers as lower prices? How will abuse be prevented? And how does Nigeria ensure a supposedly temporary intervention does not quietly become another permanent entitlement?
Atiku must provide convincing answers. But Tinubu must answer questions too. The most important is this: what have Nigerians received in exchange for the sacrifices demanded by subsidy removal?
Atiku’s camp has pressed the government for specifics, demanding an account of roughly ₦30 trillion in Federation Account revenues, and pointing to a ₦12.8 trillion Service-Wide Vote buried in the 2026 budget. The Presidency disputes that framing, but the questions themselves are fair.
Improved government revenue matters, but it is not an end in itself; economic reform must improve human welfare. If government accounts grow healthier while households grow poorer, citizens deserve to know when those gains will reach their daily lives.
There is also a conceptual error Nigeria should avoid. Not every subsidy is bad economics. Governments everywhere subsidise agriculture, transport, energy, healthcare and education. The relevant questions are: what is being subsidised, why, for whom, at what cost, and towards what measurable outcome?
A subsidy that permanently finances inefficiency, corruption, fictitious consumption and arbitrage is indefensible. But a transparent, temporary intervention designed to stimulate domestic production, protect vulnerable consumers or correct a specific market distortion cannot simply be dismissed because it carries the word “subsidy.”
The choice cannot be between the recklessness of yesterday and the hardship of today. There must be room for intelligent policy between the two extremes.
Perhaps the great weakness of the 2023 transition was not the decision that subsidy had to end. There was already remarkable political consensus around that. The greater question was preparedness.
Were mass transportation alternatives ready? Was an effective social protection architecture in place? Was domestic refining sufficiently established? Were the consequences for food, transport and small businesses properly anticipated?
Reform without cushioning can easily feel like punishment. But cushioning without fiscal discipline can just as easily recreate the subsidy trap. That is why the renewed debate should be welcomed.
Tinubu should resist treating every alternative as economic ignorance. Atiku should resist offering an attractive policy label without credible numbers to back it up.
Nigerians deserve more than campaign slogans from either side. The question for 2027 should therefore not simply be: are you for subsidy or against it? That question belongs to yesterday.
The questions now should be: what exactly will you subsidise? Who benefits? How much will it cost? How will it be funded? How will corruption be prevented? What measurable benefit will Nigerians receive? And when does it end?
Those are the questions Nigeria should have answered comprehensively before 29 May 2023. Perhaps that is why subsidy has returned to haunt our politics. We ended the old arrangement. We never really finished the debate.
Dr Lemmy Ughegbe, FIMC, CMC
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