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.

Use The App To Win ₦1m

Stories are shared by community members. This article does not represent the official view of NaijaWorld — the author is solely responsible for its content.