Energy experts and economists have backed the proposal by former Vice President Atiku Abubakar for a review of the Federal Government’s petrol subsidy policy, urging President Bola Tinubu to introduce targeted measures to cushion the hardship caused by the removal of the subsidy.

The experts, who spoke separately on the development, however, warned against a blanket return to the old subsidy regime, stressing the need for transparency, accountability and proper implementation of any intervention.

They argued that while the removal of subsidy was necessary, the Federal Government had not adequately managed its consequences, particularly the rising cost of petrol, transportation, food and other essential goods.

Atiku, the presidential candidate of the African Democratic Congress, had recently proposed the return of petrol subsidy if elected in 2027, arguing that Nigerians had not sufficiently benefited from the savings generated by the removal of the subsidy.

He said his proposed intervention would be targeted, capped, budgeted, time-bound and independently audited, with the objective of supporting domestic production and shielding consumers from excessive petrol price shocks.

Atiku argued that the economic circumstances confronting Nigerians had changed substantially since Tinubu announced the removal of petrol subsidy in May 2023, making it necessary to reassess existing policy prescriptions.

He proposed that qualifying public and private Nigerian refineries would receive domestic crude at a preferential price, subject to strict production, efficiency, transparency and domestic-supply conditions. Atiku acknowledged that supplying crude below its market-equivalent value represents a real opportunity cost to the Federation and said his plan would account for that cost openly rather than pretend it does not exist.

He proposed that no refinery would receive subsidised crude without a corresponding independently verified quantity of petroleum products being supplied to the Nigerian market under a transparent pricing formula reflecting the benefit of the preferential crude price.

The proposal has triggered a fresh debate, with the Federal Government and the All Progressives Congress opposing the idea and warning against a return to what they described as the corruption and fiscal burden associated with the former subsidy regime. Tinubu said it was a display of ignorance and that the proposal could erode current economic gains.

The Federal Government and the ruling APC warned against any attempt to restore petrol subsidy, arguing that reversing the policy would reopen the fiscal pressures, distortions and economic uncertainties that forced the country to abandon the regime in the first place.

The APC National Chairman, Prof Nentawe Yilwatda, and the Minister of Information and National Orientation, Mohammed Idris, separately responded to former Vice President Atiku Abubakar’s proposal for a reversal of the subsidy removal.

Yilwatda described Atiku’s position as a “deeply troubling policy U-turn,” accusing the opposition of making an election-season promise without explaining how the huge cost of subsidising petrol would be financed.

According to him, the timing of the proposal, coming about four months before the 2027 general election, raised questions about whether the opposition had developed a coherent economic programme capable of addressing Nigeria’s structural challenges.

“Economic policy cannot be reduced to election-season promises. Nigerians deserve to know precisely where the money will come from, what sectors will bear the cost and whether such a policy can be sustained without reopening the fiscal pressures that necessitated reform in the first place,” Yilwatda said.

Experts speak

However, speaking on Atiku’s proposal, the Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, described it as workable and viable, arguing that the current petrol price was too high for a country where a large proportion of the population is struggling with extreme poverty and hunger.

“Well, for me personally, it’s a workable and viable policy because it is quite unfortunate that in a country like Nigeria where 80 per cent of its citizens are poor, you allow the masses to pay N1,300 for petrol at the pump. So, you need to understand that if, without any intervention, without any government intervention, citizens will not be able to survive N1300 at the pump.

“And unfortunately, the naira-for-crude deal isn’t showing or isn’t working. The CNG too, it’s not working. CNG is the government initiative to cushion the effects, but it is not working. The motorists are getting it at a cheaper rate, but they still allow Nigerians to pay higher fares. That means CNG too has not worked,” he said.

Jeremiah said the limited number of CNG stations across the country also raised questions about the effectiveness of the Federal Government’s intervention. He added, “So I believe an alternative vision or policy by Atiku can work. But where the problem is, is implementation. It’s a policy that could work.”

The Petroleumprice.ng boss said the government could consider directing part of the revenue from crude oil sales towards intervention in the prices of petroleum products.

“All over the world, during this crisis between Iran and the US, most countries of the world intervened on the prices of petroleum products. Some have adopted this Atiku’s model, and that helps the countries to cap and control prices, pending when it will be resolved,” he added.

The expert noted that the government is now getting windfalls on crude sales, calling on the government to look into the rising prices of wet products, particularly petrol and diesel, as a way of reducing the burden on consumers.

“So I think a bit of the windfalls should be used for direct intervention in petroleum products. What they’re supposed to do is that the wet products, that is petrol and diesel, that people are used to, could be subsidised. And this Atiku’s model, I think, is a workable and viable one at the moment, but it needs to be properly implemented for it to work,” he stated.

The debate comes against the backdrop of the sharp increase in petrol prices since the removal of subsidy in May 2023. The PUNCH reported in June that petrol prices had risen from N175 per litre in May 2023 to about N1,300 per litre by May 2026, representing a 643 per cent increase over three years.

President Tinubu announced the end of the petrol subsidy regime in his inaugural address on May 29, 2023, saying the subsidy had become unsustainable. The decision immediately pushed up petrol prices and subsequently increased transportation and living costs.

But the information minister, Idris, argued that subsidy removal had released trillions of naira for distribution among the three tiers of government and created fiscal space for infrastructure, social investment and other government obligations.

According to the minister, figures presented under the Federal Government’s Reform Scorecard showed that subsidy savings mobilised N15.8tn for the Federation between June 2023 and December 2025.

He said about N5.43tn accrued to the Federal Government, while states and local governments received approximately N6.52tn and N3.88tn respectively. Idris, however, clarified that the N15.8tn did not represent money sitting in a separate government account, but resources released within the broader fiscal system and made available to the three tiers of government.

Speaking, an energy expert, Dan Kunle, said the removal itself was not necessarily the problem, but the failure to properly manage its aftermath. While saying subsidy removal was not totally bad, Kunle argued that seeking an alternative as proposed by Atiku is also not a bad idea.

“My take is like this: because we are human beings, my take is 50-50, yes and no. If you try something and it didn’t work well, it means maybe the approach and the strategy you used to remove the subsidy and manage the consequences were weak. The courage to remove was good enough, but to manage the post-removal effect, maybe, was poorly managed,” he stated.

Kunle said the savings from subsidy removal should have been accompanied by a coordinated strategy to mitigate its effects on Nigerians. He faulted the government for failing to adequately manage the economic consequences of the policy at the national, state and local government levels.

“Since they removed the subsidy and there was not enough effective management of the consequences and the fallout effect, there was no strong team to manage it along with the economic situation at the national level down to the state and local government level.

“So, the fallout has become so enormous for the people, for the ordinary people of Nigeria to carry. And the elites that are running the government in Nigeria and political office holders are enjoying. Because their allowances and the vehicles are still bought for them. Luxury was still provided for them from that saving.

“So, you and I will say, ‘Since I have seen the situation in the last three years with this policy, why not try it this way?’ So, any new person will say, “If I become president, I will subsidize another way. That’s why I say it’s 50-50. We can’t blame the person proposing something else. He should only articulate how he’s going to manage his own new approach of subsidy management,” Kunle posited.

He said the debate should not simply be framed as a question of bringing back the old subsidy regime, but rather finding a more effective model of intervention.

“Because it’s not about bringing back the subsidy; that may be a wrong word. It’s about saying, ‘Oh, I will manage the subsidy regime in another fashion, in another model,” he said.

Kunle argued that Nigeria would need to increase crude oil production substantially before it could dedicate a significant volume of crude to domestic refineries at subsidised prices.

He said such a model could potentially bring petrol prices down, but warned that Nigeria’s current production levels and existing crude commitments made the proposal difficult to implement immediately.

“In the scenario we have today, you are doing only 1.6 million barrels, 1.7 million barrels. Where is the room for you to dedicate 500,000 or 600,000 barrels to the domestic refineries when you have already committed the 1.6 million to various buyers and sellers all over the world for the next three to seven years?” he asked.

Kunle said any government seeking to revisit the subsidy policy proposed by Atiku would first have to increase crude oil production.

“So, even if President Tinubu wants to realign his subsidy policy, he has to address one fundamental issue first. If he wins a second time and he wants to realign the policy, the first thing he must do fundamentally is to increase investment in crude production, onshore and offshore, so that he can hit 2 million barrels and above,” he said.

He, however, warned against making Nigerians permanently dependent on subsidised commodities, advocating job creation and productivity instead. He said the government should focus on job creation, agriculture, cheaper credit and electricity rather than relying mainly on palliatives.

Kunle also criticised the Federal Government’s continued investment in the rehabilitation of the nation’s moribund refineries, describing them as outdated assets.

“Why is he going back to the refineries? He should have asked them to sell as they are. Privatise them as they are. Any buyer will go and do total rebuilding, tear down everything, and put a value. So, what is he doing there? Why is he still going back to such pedestrian, old and rotten plants? Those refineries are museums. Left to me today, they will never produce efficiently.”

He went further to challenge the government’s ability to achieve high utilisation from the refineries.

“My brother, if in the next three years those refineries can produce at 80 or 90 per cent capacity in three years’ time, come to me for N500,000. Write it down,” he stressed.

Meanwhile, an economist, Prof Akpan Ekpo, said the subsidy regime had serious flaws but argued that Nigerians who are currently suffering should not be made to bear the consequences of the alleged corruption associated with it.

“Subsidy was clearly a scam, but the people suffering now are not the people involved in the scam. So we should have discussed what will be the adverse effect before removing it,” he stated.

Ekpo said the government failed to sufficiently prepare for the consequences of the policy, describing the lack of planning before the announcement as a major problem.

According to Ekpo, the president did not call the experts to discuss the implications of subsidy removal before announcing it.

“And what the economists call the announcement effect was the problem. He announced it without looking at any study, and that’s why we are now doing damage control,” he asserted.

He said subsidies could be directed either towards consumers or producers, stressing that production subsidies being proposed by Atiku could potentially reduce the cost of production and ultimately lower pump prices.

“Subsidy is on two sides of the economy. You can subsidise consumption or subsidise production. If you subsidise production, you are hoping that the firms or the suppliers will pass on the benefit to consumers in terms of lower pump prices,” he stated.

Ekpo, however, said he did not support a complete reversal of the subsidy removal, instead advocating targeted intervention for vulnerable Nigerians.

“I don’t support a complete reversal of the policy, but if any reform you carry out and the middle class is wiped out and there is so much poverty, you can rejig it. By rejigging it, I mean that the government has a duty to now do what we call targeted subsidy,” he said.

Ekpo proposed the use of vouchers to help Nigerians who need assistance with the cost of petrol. “Vulnerable people. You can give them vouchers to buy petrol at a reduced price, and the government redeems that voucher,” he suggested.

Ekpo also suggested that part of the savings from subsidy removal could be transferred directly to households rather than distributed entirely through government budgets.

“The savings you’ve made from subsidy removal, you don’t have to give all of them to states and local governments. You can give some to Nigerians’ households, through vouchers,” he added.

The don said millions of Nigerians had bank accounts through which direct financial support could be provided.

On Atiku’s proposal, Ekpo said the concept of moving subsidy from consumption to production appeared plausible but required more details. “If the current government says they cannot rejig the current subsidy model, it is wrong because economics is the study of alternatives.

“I have not seen the detail of Artiku’s plan, but when you have a policy for three years, it has wiped out the entire middle class, and has put Nigerians almost six per cent or so in poverty, you can rejig it; even the World Bank supports what we call targeted subsidy, and we can afford it. You don’t need to give all the savings to states,” he noted.

He also raised concerns about whether refiners would automatically pass the benefits of cheaper crude on to consumers, warning that commercial operators would naturally seek to maximise profits.

Meanwhile, an energy economist, Prof Adeola Adenikinju, said production subsidy was preferable in principle to consumption subsidy, but warned that Nigeria’s history of special interests could undermine such a system.

“I understand what Atiku is trying to say, which is that a production subsidy is better than a consumption subsidy. You incentivise the producer so that he can then go ahead to lower the final price,” he said.

He warned, however, that the major challenge would be ensuring that the system remained transparent and competitive, saying the process could be hijacked. “Once some people hijack that process, it becomes perpetually entrenched,” he opined.

Adenikinju said any production subsidy would require a mechanism to prevent vested interests from capturing the system and keeping it in place indefinitely. He said the better approach would be to ensure that Nigerians could clearly see how the savings from subsidy removal were being spent.

“So there’s no way you can guarantee that that process or that system will be done in a transparent and competitive way. The history of subsidy suggests that there’s always a way by which interests will hijack it. But we have also argued that when you remove subsidy, you don’t put the money in the general budget, because people wouldn’t ever be able to see what the benefits are from the removal of subsidy,” he mentioned.

According to him, the government should create a dedicated mechanism through which savings from subsidy removal could be channelled into projects and programmes with direct benefits to Nigerians.

“In the past, the way this was done in many countries is that you put it in a specialised fund, and then you can see what you spend those things on.”

He listed infrastructure, railways, education and healthcare among areas where Nigerians should be able to see the benefits of the subsidy reform instead of sending the same to state governors.

“We’re just seeing government officials and politicians living big, and the states getting more money, but what are they doing? They are constructing flyovers instead of spending money on what will affect the lives of people? I don’t support the reintroduction of subsidy either directly or indirectly through production subsidy,” he mentioned.

Adenikinju also advocated improved mass transportation, saying the government should do more to reduce the burden of transportation on households.

“Another thing that I thought would be very important is the issue of mass transit. And one of the major ways through which, first of all, we provide paths for the economy is through transportation.”

He criticised the government’s CNG intervention as insufficient, particularly because of the limited availability of CNG facilities.

“The CNG the government is promoting. In a lot of places, we don’t even see those CNG buses. They aren’t there; they are very insufficient to be able to cushion the effects on the poor people.”

The renewed debate over subsidy comes as the Federal Government faces increasing pressure to demonstrate how savings from the policy have benefited ordinary Nigerians.

The PUNCH reported that the Federal Government spent N30.64tn on economic reforms and interventions in the 30 months following the removal of the petrol subsidy, while the reforms generated N15.8tn in savings for the Federation.

The government pointed to increased allocations to states and infrastructure projects as part of the benefits of the reform. The PUNCH reported that FAAC allocations reached a record N3.007tn in July 2026, with states receiving significantly higher revenues following the removal of the subsidy.

However, the debate has remained contentious, with the Federal Government insisting that reversing the policy would undermine the fiscal gains achieved since 2023. Information and National Orientation Minister, Mohammed Idris, argued that restoring the subsidy would reverse economic gains, including the reported N15.8tn savings.

The experts, while differing on the appropriate model, agreed that the central issue was how to ensure that Nigerians benefit from the savings and reforms without recreating the corruption and fiscal problems associated with the former subsidy system.

Across various social media platforms, Nigerians lamented the current economic hardship, saying they would support whoever promises to turn things around.

Nonetheless, Idris disclosed that at the federal level, the fiscal space had supported investments in strategic infrastructure, human capital and social programmes. The minister cited approximately N6.47tn in additional expenditure on strategic infrastructure, including projects in transport, housing, agriculture and security.

He also said more than 10 million Nigerian households had benefited from social transfers, while more than N400bn had been committed to programmes including the Nigerian Education Loan Fund, the MOFI Real Estate Investment Fund and the Nigerian Consumer Credit Corporation.

Idris said reversing the subsidy reform would also threaten gains in the petroleum sector at a time when Nigeria was witnessing an expansion in domestic refining capacity. He recalled that Nigeria spent about $10bn on fuel subsidies in 2022, at a time when oil production was declining, and government revenues were under pressure.

The minister argued that the subsidy regime had become increasingly difficult to sustain, with resources that could have been deployed to education, healthcare, infrastructure and social protection being channelled into keeping petrol prices artificially low.

The Federal Government also warned that returning to the old system could recreate fuel scarcity, encourage arbitrage and deepen the country’s fiscal difficulties.

According to Idris, the government’s Reform Scorecard projected that, without the reforms, petrol scarcity could have returned and prices on the black market could have risen above N3,000 per litre.

“We are not claiming that the reforms have solved all of Nigeria’s economic challenges; there is indeed still much work to be done to translate improved fiscal capacity into better services, jobs, infrastructure and living standards.

“But the proper response to the hardship associated with reform is not to dismantle the reform; it is to accelerate the benefits,” the minister said.