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matthew·Business·

Fuel Subsidy: Could Nigeria Keep Borrowing to Sell Petrol Below Cost?

Nigeria’s former fuel-subsidy model can be reduced to a simple calculation: borrow ₦10 to buy petrol, sell it for ₦3, and let government cover the remaining ₦7. The problem was not only that petrol was sold below its real cost. Government was increasingly borrowing to finance the gap. That turned cheap fuel into deferred public debt. Subsidy removal in 2023 brought severe pain through higher transport fares, food prices and household expenses. However, the core question remains: how long could Nigeria keep borrowing to sustain petrol prices far below cost? Government must now show that higher revenues are being converted into better transport, infrastructure, education, jobs and meaningful household relief. Removing subsidy may have addressed an unsustainable system, but Nigerians still deserve to see the promised benefits.

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P
peter

If government borrowed to cover the gap, what was the realistic long-term plan for keeping petrol below cost?

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Y
yemi

What sustainable funding source did supporters of the subsidy expect to replace repeated borrowing?

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N
nuru

The ₦10 purchase and ₦3 sale example makes the fiscal pressure easy to understand; borrowing only delays the bill.

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H
hala

Still, the calculation alone does not settle the debate, because sudden price changes can hit households hard.

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P
prince

Any support scheme should be clearly funded, time-bound, and regularly reviewed instead of relying on more borrowing.

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