Former Vice President Atiku Abubakar has reignited Nigeria’s fuel-subsidy debate with a proposal to replace the old import-subsidy regime with what his campaign describes as a targeted, independently audited production subsidy operating within a predetermined annual fiscal ceiling approved through the federal budget.
Atiku is right about one fundamental point: Nigerians cannot simply be asked to endure permanently high energy costs while being told that the benefits of subsidy removal will eventually trickle down to them. The sharp rise in petrol prices has placed enormous pressure on transportation, food, businesses and household purchasing power.
However, bringing back an uncontrolled, open-ended petrol subsidy would be economically dangerous.
His proposed production-subsidy model is certainly more defensible than the old import-subsidy arrangement because, in principle, it could be capped, audited and linked to domestic production rather than an unlimited government commitment to paying the difference between market prices and an artificially low pump price. But the details matter enormously.
The question Nigerians should therefore ask is not simply:
“Subsidy or no subsidy?”
The more important questions are:
How much will government spend? Who will receive the money? How will it be independently audited? How long will it last? What happens when the budget ceiling is reached? And, most importantly, will it make Nigerian refineries more competitive—or create another avenue for government resources to disappear?
That is where the real debate should be.
Five things that could happen if fuel subsidy is returned
1. Fuel queues could return
An artificially controlled petrol price can increase demand while discouraging suppliers when the government reimbursement mechanism fails to cover their actual costs. Nigeria has experienced this cycle before, with fuel shortages and long queues becoming recurring features of the old subsidy era.
A poorly designed subsidy could therefore recreate the conditions that produced those shortages.
2. Fuel smuggling could surge again
When petrol is significantly cheaper in Nigeria than in neighbouring countries, the price difference creates a powerful incentive for illegal cross-border trade.
Nigeria has historically struggled with subsidised petrol being diverted across borders. Reintroducing a large price distortion without strong controls could once again mean Nigerians' public money effectively subsidises fuel consumed outside Nigeria.
3. Government revenue could come under renewed pressure
One of the biggest concerns is the fiscal cost.
If government begins absorbing a significant portion of the cost of petrol, money that could otherwise support infrastructure, healthcare, education, transportation and other public services could again be redirected towards petroleum-price intervention.
The whole point of Atiku's proposed model is supposedly to avoid this by establishing a predetermined annual fiscal ceiling. That safeguard must therefore be real, enforceable and publicly auditable—not merely a political promise.
4. Domestic refining could be undermined
This is perhaps the most sensitive issue.
Nigeria is finally moving from decades of dependence on imported refined petroleum towards domestic refining. In early 2026, the Dangote Refinery accounted for approximately 62% of domestic petrol supply in January, rising to about 92% of reported daily supply in February as petrol imports were sharply reduced.
If government heavily subsidises imported petrol while local refiners operate without equivalent support, domestic producers could struggle to compete.
That does not mean Nigeria should create a monopoly for any refinery. Competition remains essential. But policy must also avoid destroying the very domestic refining capacity Nigeria has spent decades trying to establish.
5. Nigeria could risk returning to import dependence
Nigeria's strategic objective should be to become a competitive refining and energy-producing economy—not permanently dependent on imported petrol.
The Dangote refinery already has a capacity of hundreds of thousands of barrels per day and is increasingly supplying both Nigeria and international markets. Reuters reported in August 2026 that the refinery was attracting international investment while expanding its export activities.
The answer to expensive petrol should therefore not simply be to recreate the old system.
Nigeria should pursue cheaper domestic refining, reliable crude supply, transparent pricing, competition, efficient transportation and targeted assistance for vulnerable Nigerians.
Atiku's proposal deserves scrutiny rather than automatic dismissal. If it genuinely means a limited, transparent and independently audited production intervention, it is fundamentally different from the old open-ended subsidy system.
But Nigerians should demand the numbers before accepting the promise.
We should be moving forward—not returning to a system that failed to solve the structural problems of Nigeria's petroleum industry.
And as the 2027 election approaches, Nigerians have every right to examine Atiku Abubakar's economic programme critically and decide whether they believe he has presented a credible alternative for the country's future.
Ultimately, the responsibility lies with Nigerians: study the policies, examine the numbers and decide at the ballot box whether Alhaji Atiku Abubakar deserves to become President of Nigeria.
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