Why Nigeria Should Not Return to Fuel Subsidy
Atiku Abubakar’s suggestion that fuel subsidies could return if he is elected raises serious questions about fiscal responsibility. Before the policy was removed in May 2023, Nigeria was reportedly spending more than ₦4 trillion yearly on a system sustained by borrowing, foreign-exchange pressure, smuggling and arbitrage. We should not ignore the hardship caused by higher petrol prices. However, bringing back a broad subsidy could place an even heavier burden on public finances. With debt servicing already consuming a large share of government revenue, Nigerians deserve clear answers on how a subsidy costing more than ₦5 trillion annually would be funded without worsening inflation, debt or taxes. The old system also encouraged cross-border smuggling because petrol was far cheaper in Nigeria than in neighbouring countries. Price controls below landing costs could again push marketers out of the market and revive fuel queues. Rather than return to an expensive blanket subsidy, government should focus on targeted support such as CNG transport, student loans, social investments and improved infrastructure. The priority should be managing the transition better, not restoring a policy that proved difficult to sustain.
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.