Nigeria is once again being invited to choose between two kinds of pain: the fiscal disaster of an open-ended petrol subsidy and the crushing hardship of removing it without an adequate protection plan. President Bola Ahmed Tinubu insists that returning to subsidy would be economic suicide.
Former Vice President Atiku Abubakar argues that economic reform cannot be celebrated while millions of citizens are being pushed deeper into poverty.
Both men have touched different sides of the truth. The real question is whether Nigeria must choose between bankrupting the government and impoverishing the governed.
When President Tinubu declared on May 29, 2023, that “subsidy is gone,” he confronted a system that had become economically indefensible.
The subsidy was consuming money that should have built roads, hospitals, schools, railways and power infrastructure. It also encouraged inflated consumption figures, cross-border smuggling and a vast network of rent-seeking.
According to the World Bank, the estimated cost of Nigeria’s petrol subsidy in 2022 was equivalent to about 5.2 per cent of Gross Domestic Product and roughly three-quarters of the revenue flowing into the Federation Account.
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No serious country could continue indefinitely on that road.
The International Monetary Fund and the World Bank therefore applauded the direction of the reform. Their argument was straightforward: a blanket fuel subsidy is poorly targeted.
The wealthy man with several vehicles and generators consumes far more subsidised petrol than the widow in a rural community. In theory, removing the subsidy and investing the savings in public transportation, electricity, healthcare, education and targeted welfare should produce a fairer and more productive economy.
But economic reforms do not take place in textbooks. They take place in homes, markets, workshops and motor parks.
In Nigeria, petrol is not merely a commodity purchased by vehicle owners. It is part of the price of food transported from the farm, the fare paid by workers, the cost of running a barber’s shop, the generator of a small clinic and the survival expense of millions of businesses operating without dependable electricity.
Removing the subsidy suddenly, while simultaneously liberalising the foreign exchange market, transmitted a powerful shock through almost every corner of the economy.
The figures are sobering. The National Bureau of Statistics reported that the average retail price of petrol was ₦238.11 per litre in May 2023. By February 2026, it had risen to ₦1,051.47; more than four times the pre-removal average.
The same NBS currently puts headline inflation at 15.43 per cent and food inflation at 20.31 per cent under the rebased Consumer Price Index. Falling inflation does not mean that prices are falling; it only means that already high prices are rising more slowly. A bag of food that has moved beyond the reach of a household does not suddenly become affordable because the inflation rate has moderated.
The social consequences are equally troubling. The World Bank’s latest Nigeria assessment estimates that economic growth reached about 4 per cent in 2025 and that foreign reserves improved. Yet it also estimates that another seven million Nigerians fell into poverty during that year, raising the proportion living below the national poverty line to approximately 63 per cent. It further observed that the planned cash-transfer programme for 15 million vulnerable households was implemented more slowly than expected.
That is the uncomfortable contradiction at the heart of Tinubu’s reforms: the macroeconomic indicators may be stabilising, but a large proportion of the population has not felt the stability.
Government revenues have certainly increased.
In May 2023, the three tiers of government shared ₦786.161 billion through the Federation Account Allocation Committee. By July 2026, the monthly distribution had risen to a record ₦3.007 trillion. That is almost four times the May 2023 figure, although inflation, exchange-rate changes, taxes and other revenue movements mean that the increase cannot be attributed solely to subsidy removal.
This is where Atiku’s criticism finds fertile ground. Increased government allocations are not, by themselves, evidence of national development. If Abuja, the states and the local governments receive bigger cheques while citizens eat less, businesses close and public services remain unchanged, then the reform has not yet completed its journey from government accounts to human welfare.
Atiku has recently argued that his proposal is not a resurrection of the old, corrupt and limitless subsidy arrangement. He describes it as a targeted, capped, time-bound and independently audited production support mechanism, tied to domestic refining and designed to moderate extreme price shocks. That qualification is important. It is materially different from simply fixing a cheap pump price and allowing the government to absorb an unknown bill.
Atiku is right that Tinubu’s reform was insufficiently sequenced. The social register should have been cleaned up, mass transit expanded, refineries and competitive fuel-supply channels strengthened, and cash support delivered before the full shock reached the population.
However, Atiku must also recognise the danger in reopening the subsidy door. In Nigeria, what begins as a temporary intervention often becomes a permanent entitlement and eventually another feeding bottle for politically connected interests.
There is also an unresolved transparency problem. The IMF’s 2026 assessment of Nigeria stated that the removal was effectively completed only in late 2024 and estimated the potential savings at up to 2 per cent of GDP.
More disturbingly, it noted that these savings did not appear to have accrued clearly to the 2025 federal budget. That observation demands a detailed public explanation. Nigerians who have paid for reform through higher transport fares, food prices and operating costs are entitled to know precisely how much was saved and where the money went.
My independent position is that Tinubu was right about the destination, while Atiku is substantially right about the defective sequencing, weak cushioning and continuing opacity. But returning to a universal petrol-consumption subsidy would be a costly retreat.
What Nigeria needs is neither the old subsidy bazaar nor the cold application of economic theory. It needs a legally enforceable Development Dividend Compact. A fixed percentage of the fiscal gains from subsidy removal should be transparently dedicated to affordable mass transit, reliable electricity, primary healthcare, basic education, agricultural logistics and direct support for clearly identified vulnerable households. Every naira saved and every project funded should appear on a publicly accessible dashboard, independently audited and broken down by federal, state and local government expenditure.
A temporary intervention may be justified only where it supports domestic production, expands refining capacity or prevents a genuine emergency. Such support must be capped, budgeted, time-limited, competitively administered and incapable of being manipulated through fictitious importation or consumption figures. Nigeria should subsidise production and productivity, not indefinite consumption.
For a developing African country with widespread poverty, unreliable electricity and weak public transportation, reform must have both an economic brain and a human heart. Fiscal discipline without social protection breeds anger and instability. Social protection without fiscal discipline eventually destroys the economy it seeks to protect.
The ultimate test is not whether Tinubu defeats Atiku in the argument, or Atiku defeats Tinubu at the polls. The test is whether Nigeria can convert the sacrifices of its people into visible development. If citizens continue to bear the pain while governments merely share larger allocations, subsidy removal will be remembered not as reform, but as a transfer of hardship from the treasury to the people.
Nigeria must not restore the old subsidy. But neither must it continue with reform that produces impressive figures in Abuja and empty cooking pots across the country. The subsidy may be gone, but government’s duty to protect the people can never be removed.
