Why Nigeria Should Not Return to Petrol Subsidy

I believe the debate over petrol subsidy removal and President Bola Tinubu’s economic reforms is necessary because Nigerians are living with the consequences. However, using the Rule of 70 to predict Nigeria’s future growth assumes a constant rate and overlooks the purpose of reform: changing the conditions that have held the economy back. Petrol subsidy once helped moderate prices, but it became increasingly costly as Nigeria relied on imported fuel. It drained trillions of naira, encouraged smuggling and arbitrage, distorted foreign-exchange demand, and weakened incentives to invest in local refining. The key question is not whether Nigerians need relief, but whether an untargeted petrol subsidy is the best and most sustainable way to provide it. Subsidy removal has created fiscal space and, alongside foreign-exchange reforms, has helped address major structural distortions. The government must now ensure that the gains translate into real relief through cash transfers, affordable transport, student financing, consumer credit, support for businesses, skills programmes and stronger social protection. Reversing the policy would restore the same fiscal burden and market distortions that held the country back. Nigeria should focus on making the post-subsidy economy work for citizens through transparency, productive investment, better public services and targeted support for vulnerable households.

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