Why Restoring Fuel Subsidy Could Cost Nigeria More Than ₦21 Trillion Yearly

I come in peace. I believe the APC should be voted out because it has failed on corruption and on moving Nigeria away from oil dependence. However, I do not think restoring fuel subsidy is financially sustainable. Using a Dangote Refinery ex-gantry price of about ₦1,185 per litre and pump prices of up to ₦1,450 in some cities, a nationwide pump-price target of ₦200 would require a subsidy of roughly ₦1,250 per litre. At estimated daily consumption of 48 million litres, that comes to about ₦60 billion daily, or ₦21.9 trillion in one year. The situation could become worse if smuggling returns. At consumption levels of around 90 million litres daily, the subsidy bill could rise to about ₦112.5 billion per day, or more than ₦41 trillion yearly. This would force the government to borrow heavily or divert funds from already allocated public services. A lasting solution should focus on reducing distribution costs through pipelines, supporting local production with tax incentives, and strengthening border controls. Subsidies cost money, and Nigeria must be honest about where that money will come from.

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