More than three years after President Bola Tinubu declared that “fuel subsidy is gone” during his inauguration speech, the policy remains one of the most contested issues in Nigerian politics, with the government defending it as the country’s economic rescue and the opposition promising to reverse it.
On May 29, 2023, Tinubu used his inaugural address in Abuja to end a subsidy scheme that had propped up petroleum prices for decades.
He told Nigerians that the subsidy could no longer be justified and that the savings would be redirected to infrastructure and welfare programmes.
The declaration came as he inherited an economy from predecessor, late President Muhammadu Buhari marked by high inflation, widespread unemployment and a shrinking oil sector.
Nigeria, despite being a major crude producer, has long relied on imported refined products sold at government-fixed prices, a system that consumed trillions of naira annually.
The subsidy cost the treasury an estimated N4.3 trillion in 2022 alone, with a further N3.36 trillion budgeted for just the first half of the following year.
Marking three years in office, Tinubu told visiting state governors on May 29, 2026, that ending the subsidy had pulled Nigeria back from the brink of bankruptcy.
He acknowledged the decision had been painful but argued it was necessary to stop fiscal collapse. Citing improvements he attributed to the reforms, the president pointed to agricultural growth, revived infrastructure projects and governors no longer needing federal bailouts to pay salaries.
He credited the trust built with citizens and state leaders for helping the country weather the transition.
The Government’s Scorecard
The clearest official accounting came on August 19, 2026, when the Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele released what he called Nigeria’s Reform Scorecard, an attempt to quantify both the gains and costs of the subsidy removal alongside a parallel currency reform.
According to the scorecard, subsidy savings generated N15.8 trillion for the federation between June 2023 and December 2025, with N5.4 trillion going to the federal government and N10.4 trillion shared among states and local governments.
Combined with N3.1 trillion in independent revenue and N11.9 trillion in new borrowing, the federal government’s total incremental resources reached N20.4 trillion, money Oyedele said funded N30.64 trillion in additional spending, led by public-sector wage increases, external debt servicing and infrastructure.
Oyedele said the exercise was built around comparing pre-reform trends against current data and a projected “no-reform” scenario for 2026.
Twenty-five indicators spanning fiscal health, external stability, investment, social welfare and growth were assessed, he said, to show not just what changed but what the reforms are estimated to have prevented, including a wider gap between official and black-market exchange rates and a larger number of states unable to pay salaries.
He also acknowledged the costs directly: the central bank’s benchmark interest rate has climbed from 18.5 percent to 26.5 percent, and pump prices have risen sharply from roughly N185 to between N1,100 and N1,400 per litre.
Food inflation, while easing to 17.52 percent by June 2026 from 24.82 percent, remains what the minister called “unfinished business.”
On broader indicators, the scorecard cited headline inflation easing to 15.91 percent from a May 2023 baseline of 22.41 percent, foreign reserves rising to $52.5 billion, and a stock market that has grown roughly fivefold in capitalisation.
Oyedele also pointed to a sovereign credit rating upgrade from S&P Global and Nigeria’s exit from international financial watchlists as evidence of restored global standing.
The Opposition’s Pledge
The scorecard’s release was quickly overshadowed by a political flashpoint. On August 20, 2026, former Vice President Atiku Abubakar, the African Democratic Congress candidate for the 2027 election, said he would restore the fuel subsidy if elected.
Speaking in a Facebook Live session and in a separate interview conducted partly in Hausa, Atiku said he had not originally opposed removing the subsidy but questioned where the resulting savings had gone, asking whether the money had improved healthcare, education or security.
He said anyone found to have diverted subsidy funds should be made to return the money.
Atiku later reiterated the pledge while meeting the Osun State leadership of his party in Abuja, framing it as a plan for “targeted” relief rather than a return to the old import arrangement.
He argued that rising fuel costs feed directly into higher transport and food prices, squeezing household budgets, and said restoring subsidised fuel would help protect Nigerians’ purchasing power.
The Presidency’s Rebuttal
The presidency dismissed the pledge as political posturing. Presidential media adviser Sunday Dare said Atiku’s position was contradictory and accused him of trying to mislead the public for votes.
Dare argued that reversing the subsidy removal would undo the economic recovery the government says is underway and called on Nigerians to reject the proposal.
Government Response Measures
Alongside the fiscal debate, the government has pointed to its Compressed Natural Gas programme as a direct response to the pain caused by removing the subsidy.
Minister of State for Petroleum Resources (Gas) Ekperikpe Ekpo said the Presidential Initiative on CNG, launched in 2023, has attracted more than $2 billion in investment and is already lowering fuel costs for transport operators and businesses.
He said Tinubu had directed the construction of 500 additional CNG refuelling stations, bringing the planned national network to 1,000, and urged more state governments to join the programme.
What’s Next
With the 2027 election approaching, the subsidy question is set to remain a central dividing line between the ruling party and the opposition.
The government says it intends to keep the naira’s exchange rate unified, push inflation toward single digits and expand cash transfers and agricultural support to address what it concedes is still unresolved hardship for many households.
Atiku, meanwhile, has made restoring the subsidy a core plank of his campaign, betting that continued economic pain will outweigh the government’s macroeconomic gains in the eyes of voters.
