Nigeria removed a petrol subsidy the way a patient goes under the knife for a diseased organ: with agony, but with the promise that the pain would eventually pass and the body would be healthier for it.
Three years on, President Bola Tinubu’s May 2023 subsidy removal has left the country’s economy scarred, with inflation biting, transport costs elevated, and households squeezed, triggering one of the country’s sharpest cost-of-living shocks
And now, as recovery limps along, a chorus of presidential aspirants for 2027 is proposing putting the diseased organ back inside the body
Never mind that the surgery happened because the organ was failing. Never mind that reinsertion carries its own risks, arguably worse than the original disease.
The pain of recovery has made the pain of the operation feel like the only pain that matters, and politicians are offering to reverse it.
This development is the emotional logic behind the subsidy-revival pledges now anchoring at least two campaigns ahead of Nigeria’s 2027 presidential election.
Atiku Abubakar, the presidential candidate of the African Democratic Congress, has made restoring a ‘targeted’ subsidy his signature promise, framing it as a production-linked scheme, crude sold cheap to domestic refiners who would, in turn, sell refined fuel cheap to consumers.
Omoyele Sowore of the African Action Congress has gone further, arguing that Nigeria never really escaped subsidy in the first place, that propping up the naira and cushioning fuel costs amounts to the same thing under a different name.
Both men are betting that a population still nursing subsidy-removal pain will vote for the anaesthetic, but BusinessDay’s findings showed the anaesthetic itself may be unaffordable.
The arithmetic of putting it back
For most analysts, the question a subsidy revival campaign owes voters is who pays the difference between what petrol actually costs and what government wants Nigerians to pay for it?
Data gleaned from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed Nigeria’s average daily petrol consumption hovers at 51 million litres in April 2026.
A visit to Nigerian National Petroleum Company Limited (NNPC Limited) petrol stations showed the retail price of petrol currently at N1390 in Lagos and N1400 in Abuja.
Suppose a revived subsidy dropped the effective pump price back toward the N500-N600 range last seen as politically tolerable before 2023, the zone Atiku’s campaign gestures toward when it talks of crude-for-refined-product arrangements that make fuel ‘affordable.’
That implies a subsidy of roughly N800 a litre. Multiply by 51 million litres a day: about N40.8 billion a day. Annualised, that is over N14 trillion a year, before accounting for the consumption surge that cheap fuel would almost certainly trigger, since Nigeria’s 2022 experience showed usage claims jumping alongside price gaps as arbitrage and smuggling widened.
A N14 trillion subsidy bill is larger than the entire capital budget Nigeria typically allocates across health, education and infrastructure combined in a fiscal year.
It is a sum that has to come from somewhere: higher deficit financing, which means more government borrowing crowding out private credit; a weaker naira, since the central bank would again need to find and defend foreign exchange for a market it no longer directly subsidises; or a silent reallocation from health and education budgets toward NNPC’s subsidy line, as happened for a decade under the old regime.
In each version, the ‘relief’ at the pump is financed by pain somewhere else in the household budget, inflation, currency depreciation, or crowded-out public services.
Olu Fasan, a visiting fellow in international trade at the London School of Economics, said the subsidy pledge is where the gap between campaign rhetoric and governing reality is widest.
Fasan described the ADC candidate’s approach of subsidy revival as a ‘kitchen-sink’ strategy, the tactic, as he puts it, of throwing every popular grievance at the electorate ‘regardless of what works or doesn’t’.
‘That’s precisely what Atiku is doing by promising to tackle every conceivable vexed issue if he becomes president next year,’ Fasan said in an opinion article seen by BusinessDay.
He noted that Atiku’s language, that ‘the subsidy will follow the barrel,’ with local refiners required to sell at government-set prices in exchange for discounted crude, sounds tidy on a campaign stage.
Fasan explained that the production-linked subsidy Atiku describes would require the government to police how much of a subsidised crude allocation actually reaches consumers as cheaper fuel, a monitoring problem Nigeria has never solved even in simpler subsidy regimes, let alone one where ‘crude is only a part of refining’s cost element.’
Fasan points to Dangote Refinery’s own experience, after NNPC was ordered in 2024 to supply crude in naira, as proof that even direct government instructions to guarantee feedstock have not reliably worked.
‘Has Atiku investigated why NNPC can’t supply enough crude to domestic refineries?’ Fasan asked. ‘Would his government compel NNPC to supply crude it doesn’t have, perhaps due to international commitments?’
Olusegun Onigbinde, co-founder of the Lagos-based budget transparency group BudgIT, in an earlier post on X, formerly known as Twitter, rejected the idea that reversal is fiscally possible at all.
‘Subsidy cannot be returned,’ he wrote on X. ‘It’s too wasteful to close the funding gap, and Nigeria does not have the production levels to directly provide a discount to Nigerians.’
Onigbinde’s preferred path runs through currency stability rather than price control, using healthier reserves to strengthen the naira, protecting the roughly N1,000-to-dollar band he said keeps federal allocations to states manageable, and building a dedicated social-safety-net fund rather than a blanket fuel discount.
‘Creating a Federation-dedicated fund for safety nets should be explored, and FG needs a comprehensive plan to provide nudges and incentives to states for quality fiscal performance,’ Onigbinde said.
He added, ‘Reiterating that benefits have accrued to states is not enough because there’s still a huge trust deficit as well as asymmetry on how funds directly benefit citizens’.
Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said an annual subsidy bill approaching N20tn would compete directly with funding for infrastructure, education, healthcare, security, agriculture and social protection, while potentially widening the fiscal deficit and increasing borrowing and debt-service pressures.
Yusuf warned that restoring the old subsidy regime could therefore replace the current energy-price challenge with a much larger fiscal, debt, foreign-exchange and investment problem.
He said higher government borrowing could crowd out private-sector credit, sustain high interest rates and weaken investment, productivity, job creation and economic growth.
Rather than returning to universal petrol subsidy, the CPPE urged the government to ensure that the fiscal gains from subsidy removal are translated into visible improvements in citizens’ welfare.
‘Citizens must see tangible benefits through improved public transportation, electricity, healthcare, education, food security, infrastructure and social protection,’ Yusuf stated.