K. BOLANLE ATI-JOHN contends that fuel subsidy will be central to Nigeria’s choice in 2027
Before dawn each morning, a commercial driver in Kano calculates how much petrol he can afford, how many passengers he must carry, and what will remain after paying the vehicle owner and meeting the day’s expenses. Let us call him Musa. The calculation has become increasingly unforgiving. Fuel consumes more of his earnings. Passengers resist higher fares because their own incomes have not kept pace. At home, food, rent, medicine and school fees wait for whatever survives.
Musa hears President Bola Tinubu insist that removing fuel subsidy rescued Nigeria from fiscal collapse and created the foundation for recovery. He also hears Atiku Abubakar promise a targeted production subsidy, arguing that a wealthy country should not abandon its citizens to unbearable living costs.
Atiku’s promise speaks to Musa’s suffering; it has not yet earned his trust. He remembers that politicians often change their convictions when they change their positions, and he wants relief without a return to fraudulent import claims, smuggling and opaque payments. He is angry with Tinubu, but he is not certain that reversing Tinubu is the same as rescuing Nigeria. Tinubu’s argument may possess economic logic. It has not yet made Musa’s life bearable.
Musa is a representative figure, but his dilemma is real, and it is shared by millions of Nigerians standing between endurance and exhaustion. Their unresolved judgment may decide the 2027 presidential election because what separates the two candidates’ accounts of the same national pain is not simply their politics. It is whether either can close what might be called the reform legitimacy gap: the distance between macroeconomic figures that describe a country recovering and household experience that describes a country still struggling. A gap this wide is not settled by better statistics. It closes only when citizens can trace a visible line from their sacrifice to something they can actually feel: cheaper transport, functioning clinics and safer roads. Every argument that follows, from Tinubu’s fiscal case to Atiku’s production subsidy, is ultimately a claim about whether that line exists.
No economic decision is more closely associated with President Tinubu than his declaration on 29 May 2023 that fuel subsidy was gone. Prices rose almost immediately, and transportation and production costs followed as foreign exchange reforms weakened the naira and amplified the cost of imported goods and petroleum products.
The President’s case is that the old subsidy regime was fiscally unsustainable, vulnerable to corruption, and destructive of investment. His administration points to higher public revenues, increased Federation allocations, improved external balances, stronger reserves, expanding domestic refining and renewed investor confidence, arguing that reversing course would revive the very distortions Nigeria struggled to escape. This is a serious argument. The old system consumed vast public resources, encouraged smuggling, rewarded questionable import claims and disproportionately benefited those who consumed more petrol. No responsible analysis should romanticise it.
This essay proceeds from the view that Nigeria needed to end the old, untargeted and opaque subsidy system. But necessity did not excuse the failure to prepare adequate social protection, public transportation and transparent accounting before transferring the shock to citizens. That was not merely an implementation weakness; it was a failure of statecraft. Citizens were asked to make an immediate sacrifice, and the protections arrived slowly and unevenly, while public transportation remained inadequate and food and operating costs rose rapidly, even as the political system demanding their sacrifice showed little willingness to reduce its own cost.
Tinubu is therefore not merely defending a reform. He is defending a governing philosophy that asked Nigerians to endure present hardship for future stability, and his electoral challenge is to show that the promised future has begun to enter the lives of the people who financed it.
Atiku has recognised the political opening, but his published proposal now goes beyond a bare promise to restore subsidy. His economic plan would shift public support from imported petrol to domestic production: qualifying public and private refineries would receive crude at preferential prices, subject to verified production, domestic supply and consumer pricing obligations. The proposal also promises an annual fiscal ceiling approved through the federal budget, independent auditing, disclosure of the opportunity cost to the Federation, sanctions for diversion, and periodic reviews designed to reduce support as refining capacity and competition expand. In Atiku’s formulation, the subsidy would follow the barrel, and no refinery would receive discounted crude without passing a measurable benefit to Nigerian consumers.
This is materially different from the old system of open ended import claims and retrospective under recovery, and it deserves serious examination rather than casual dismissal. But a detailed proposal is not yet a proven policy. Atiku has not yet specified the numerical fiscal ceiling he envisages, the discount to market value at which crude would be supplied, or which institution would verify refinery intake, production yields and consumer price transmission across petrol, diesel and the other products drawn from the same barrel. These are not footnotes. They are the difference between an attractive policy framework and an executable public programme.
Before those arrangements can work, the proposal must establish that the required crude is actually available. Atiku must identify what volume could be committed to preferential domestic supply after contractual production entitlements and existing financing obligations have been met. He must also demonstrate that the reduction in demand for imported petrol would save more foreign exchange than Nigeria would surrender through discounted domestic crude. Since refiners may carry foreign currency debts and can sell products abroad, the plan must explain how a public concession would be converted into a measurable reduction in domestic prices rather than retained as refinery income.
There is also the question of state capacity. A targeted subsidy is only as credible as the institutions that identify eligible producers, verify production, enforce price transmission and prevent political capture. Nigeria’s recurring difficulty has not been confined to designing policies; it has been the capacity and integrity required to administer them. Powerful refinery owners may be better organised than dispersed consumers, and regulators may be exposed to political pressure. A discount intended for Nigerians could become private profit unless every allocation and product yield is independently reconciled, and a substantial price gap with neighbouring countries could revive cross border diversion.
Malaysia’s 2024 shift to a targeted diesel subsidy offers an instructive comparison, not as a template for Nigeria but as evidence of the administrative machinery targeting requires. Malaysia raised the general market price while retaining subsidised rates for specified sectors, issuing fleet cards to eligible logistics vehicles and providing cash assistance to qualifying individuals, farmers and smallholders. Official figures subsequently showed a 23 per cent fall in daily diesel sales at petrol stations, which the government attributed substantially to reduced misappropriation and cross border smuggling. The lesson is not that targeting is impossible. It is that targeting depends on unglamorous but indispensable machinery: reliable eligibility records, traceable transactions, audits and enforcement. Nigeria has repeatedly underinvested in precisely that machinery.
Atiku must therefore demonstrate not only that his model is conceptually different, but that the Nigerian state can build and sustain the verification apparatus it depends on. Hardship has won him attention; administrative credibility, fiscal specificity and institutional safeguards must now win him trust.
What Exactly Was Removed? The government carries its own burden of explanation. The Petroleum Industry Act 2021 already pointed Nigeria towards market pricing. Section 205 provides that wholesale and retail petroleum product prices should follow unrestricted free market conditions, while Section 64(m) makes NNPC the supplier of last resort for energy security reasons and provides for the associated costs to be borne by the Federation. Tinubu’s announcement therefore advanced a statutory direction that predated his presidency. But implementation revealed a more complicated reality than the finality of the words “subsidy is gone” suggested.
The chronology matters. Subsidy removal was announced in May 2023 and pump prices rose immediately. As the naira depreciated, private marketers struggled to obtain the foreign exchange required for imports, and NNPC remained the dominant supplier. Through 2024, NNPC continued to incur a price support differential. Dangote Refinery began producing petrol that September, and successive pump price increases in September and October moved the market closer to cost reflective pricing.
NNPC Limited’s 2024 audited financial statements record ₦7.13 trillion as energy security cost incurred during the year, of which roughly ₦4.67 trillion was defrayed within 2024, leaving a closing receivable of ₦8.67 trillion. The accounts attribute this to the gap between the exchange rate used to freeze the price of imported petrol at Nigeria’s coastal terminals and the prevailing rate when those imports were actually settled. NNPC states that the amount was charged monthly against sums due to the Federation.
The comparative entry for 2023 was approximately ₦4.84 trillion. That number must be handled carefully because the year includes both the months before the May announcement and those that followed it. Without a monthly allocation, the accounts do not show how much of the 2023 cost arose on either side of the policy declaration.
The figure has since entered partisan debate, but the accounting note should be examined on its own terms. Note 25.2.3 attributes the energy security cost to the exchange rate differential used to hold down the coastal price of imported petrol. It does not identify the ₦7.13 trillion as pipeline surveillance expenditure. The more serious transparency problem lies elsewhere: NNPC has not publicly disclosed the monthly calculations, import volumes, modulation rates, approving authorities and reconciliations that produced such an enormous obligation to the Federation. The audited figure is therefore clear enough to establish the existence of public price support, but not detailed enough to show Nigerians exactly how the cost accumulated.
Government has since altered part of the petroleum revenue architecture. Executive Order 9, issued in February 2026, redirected specified petroleum receipts to the Federation Account, discontinued NNPC’s 30 per cent management fee on profit oil and profit gas, and removed its role in collecting and managing the Frontier Exploration Fund. The measure shows that the administration recognises the problem created when public revenue is retained before distribution. But it is a forward looking response. It neither supplies the missing reconciliation for the 2023 and 2024 energy security costs nor demonstrates, without evidence of implementation, that every deduction has ceased.
None of this proves the old subsidy system continued unchanged. It does show that the May 2023 declaration began a removal process without instantaneously or permanently extinguishing every form of public price support. Government must therefore provide a complete chronology: what precisely ended in May 2023, what subsequently remained or returned, who approved the exchange rate mechanism used to freeze the coastal price, and how much of the recognised cost was ultimately charged against Federation revenue. If citizens paid far more at the pump while the Federation still absorbed part of the supply difference, they are entitled to know what was removed, when, and what replaced it.
The subsidy debate has been framed almost entirely as a contest between the President and his challengers, yet the revenue consequences extend across the Federation. State and local governments received higher nominal allocations after the reforms, and governors must explain what that additional revenue produced: public transportation, healthcare, schools, agriculture, water, rural roads and meaningful protection for vulnerable households. They must also explain how much simply disappeared into recurrent expenditure. The President made the defining announcement and bears the greatest political responsibility, but governors cannot collect the fiscal dividend and leave him alone with the political cost. Accountability must follow the money.
Nigeria is being invited to choose between two extremes: restoring an opaque universal subsidy, or accepting socially indifferent market pricing regardless of its human consequences. That is a false choice. A capable state can maintain transparent market pricing while protecting vulnerable citizens through targeted transportation support, efficient mass transit, assistance for food and agricultural logistics and direct household protection. It can publish the pricing template, disclose every public intervention, independently verify consumption, and impose a statutory ceiling and expiry conditions on any support programme.
Domestic refining, particularly the emergence of Dangote Refinery and other local projects, can reduce freight costs, import logistics, settlement delays, some foreign exchange pressures and opportunities for fictitious import claims. But domestic refining does not make crude oil free. Nigerian crude retains a market value and an opportunity cost to the Federation, and Atiku’s proposed crude discount would deliberately transfer part of that value from Federation revenue to domestic refiners and, if the mechanism works, from refiners to consumers. That can be a legitimate policy choice only if the cost is transparent, capped, and demonstrably produces greater public value than the revenue surrendered.
Nigeria must also confront the failures that make petrol unnecessarily expensive in the first place: unreliable electricity, inefficient logistics, weak competition, inadequate storage, exchange rate exposure and decades of failed public refining. The deeper national question is not simply whether government or consumers should pay for expensive petrol. It is why an oil producing country repeatedly fails to build an efficient energy system, then presents its citizens with a choice between fiscal ruin and household ruin.
Tinubu currently owns the argument for stability. Atiku is attempting to own the argument for relief. Nigerians need both. Tinubu must prove that the sacrifices demanded of citizens produced something worth preserving. Atiku must prove that temporary production support can provide relief without constructing another machinery of waste, capture and fiscal irresponsibility. Other presidential candidates must move beyond criticism and present their own costed alternatives.
The decisive constituency may be neither committed Tinubu loyalists nor enthusiastic Atiku supporters. It may be citizens like our imagined driver in Kano, exhausted by present conditions, suspicious of the old subsidy system and unwilling to exchange one deception for another. As Musa prepares to vote, he is not asking for an economics lecture. He is asking which candidate understands the difference between imposing sacrifice and governing responsibly, and who can reduce his burden without mortgaging the country, concealing the cost or enriching another network of intermediaries.
Musa does not need to be an economist. He needs five questions. Call them the voter’s test. A candidate’s answers, or refusal to answer, will tell him much of what he needs to know.
What exactly will change, for whom and by what date? Not a mood or a direction, but a specific result for identifiable people within a stated period.
What is the most government will spend or surrender, and where will it come from? A serious public intervention must have both a limit and a funding source. A candidate who cannot name them has not completed the policy.
What publicly checkable number would show whether it is working? Not a feeling that conditions are improving, but a result that could confirm success or expose failure.
Who will verify that number, and where will the findings be published? The verifier must be independent of those implementing the policy, and the evidence must be available to the National Assembly, the press and the public. “Trust me” is not an accountability mechanism.
If the policy fails or exceeds its promised cost, what rule will correct, suspend or end it? A programme without such a rule can continue consuming public resources long after the evidence has turned against it.
These questions will not settle every argument among economists. They need not. They require each candidate to state his case in public, with costs, measures, safeguards and consequences that Musa can examine after the votes have been counted.
The petrol pump will matter in 2027 because it has become the place where Nigerians measure the distance between official promises and personal reality. Who can build an economy in which national stability and human survival are no longer presented as opposing choices?
Rear Admiral Ati-John (Rtd), psc(+), fdc(+), is a Distinguished Fellow of the National Defence College, Abuja. He writes on national security, governance and national development from Lagos.