Consider Comfort Okon, who has sold frozen fish and stockfish from the same corner stall in Onitsha’s main market for thirteen years, and who keeps a small transistor radio propped against a bag of crayfish for company through the slow hours of the afternoon.
In the last full week of August 2026, that radio gave her three materially different answers to the same question in the space of three days from the same camp. On the first day, an aide to former Vice President Atiku Abubakar announced that an Atiku government would restore the petrol subsidy and phase it out later.
The next day, a second aide corrected the first, insisting there would be no fixed date for ending it at all. The day after that, Atiku himself came on air to say his position had never changed, and that he would restore what he called a targeted subsidy if elected in 2027.
Comfort, who has personally lived through one subsidy removal, one partial reinstatement she barely noticed, and three years of watching a locally built refinery fail to make petrol any calmer, did not bother changing the price of her fish. “When one full grown man cannot decide what he wants to sell me,” she said to no one in particular, packing ice around a carton of Titus fish, “I cannot decide what to sell him either.” Somewhere in the same week, the Federal Government announced, with considerable pride, that subsidy removal had freed ₦15.8 trillion for the country since 2023. Comfort’s scale did not move.
This is not really a debate about whether to bring fuel subsidy back. Every mainstream economist drawn into the argument has rejected a full return to the old opaque, uncapped regime; even Atiku’s campaign describes a targeted, capped, transparently budgeted intervention rather than the blank cheque Nigeria used to write fuel importers.
The real argument, buried under three U-turns in 72 hours, is what actually happened to the ₦15.8 trillion subsidy removal freed up, why the Federal Government alone spent nearly double that, and whether the stubbornly unmoved poverty rate shows the money went to the wrong places.
Nigeria has run this experiment before. Jonathan’s January 2012 subsidy removal (₦65 to ₦141/litre) triggered Occupy Nigeria and a partial reversal to ₦97 within about two weeks. Buhari’s 2016 increase (₦87 to ₦145) faced no comparable backlash in relative terms and was never reversed. Tinubu’s May 29, 2023 removal pushed the price from about ₦175 (about $0.38) to ₦488-₦557 in the immediate aftermath, past ₦1,000 by October 2024’s full deregulation, with no reversal in three-plus years, already the longest-surviving removal in Nigerian history.
Atiku Abubakar, running for president in 2027, pledged to restore some version of subsidy, then three campaign voices described it three different ways within three days: aide Paul Ibe said restore then phase out; aide Phrank Shaibu called that unauthorised, insisting no fixed end date; Atiku himself said his position had never changed, describing a ‘targeted subsidy’ paired with domestic refining and mass transit investment other measures to reduce living costs.
The Presidency countered with three objections: a Federation Account revenue hole from below-market crude sales; market competition distortion favouring some refiners over modular ones; and revived cross-border fuel smuggling once a price gap reopens. The Independent Media and Policy Initiative (IMPI), a policy think tank, warned on August 25 that the proposal alone could bankrupt Nigeria and chill the infrastructure financing the Dangote refinery’s own potential $5 billion IPO listing depends on.
Economists have mostly converged elsewhere; on a position the loudest voices keep talking past. Dr. Ayo Teriba argues the real question was never subsidy versus no-subsidy, but what is subsidised and how, proposing direct support to vulnerable Nigerians rather than fixing petrol’s price for everyone.
Professor Akpan Ekpo rejects full reversal but backs a voucher system letting vulnerable households and transport operators buy petrol at a reduced price, government redeeming the difference, alongside direct cash transfers. Both share a premise the shouting match keeps losing: whether the state helps by distorting the price for everyone, or by directing money at those who actually need it.
The government’s own accounting, published for the first time, is more revealing than either political side has let on. Between June 2023 and December 2025, removal released ₦15.8 trillion (about $10.5 billion) to the Federation, split ₦5.4 trillion federal, ₦6.5 trillion states, ₦3.9 trillion local governments. Federal spending over the same period reached ₦30.64 trillion (about $20.4 billion), financed by adding ₦3.1 trillion in extra revenue and ₦11.9 trillion in fresh borrowing to its ₦5.4 trillion savings share, a ₦20.4 trillion resource pool still over ₦10 trillion short of what was spent, a gap the government’s own reconciliation does not fully explain even though federal expenditure is financed from a much broader fiscal envelope. Finance Minister Taiwo Oyedele has acknowledged savings never appeared as a distinct Federation Account line at all, showing up indirectly through customs and tax collections instead.
That accounting covers only a third of the money, the easier third to defend. Of the ₦15.8 trillion, ₦10.4 trillion, close to two-thirds, went to states and local governments, with no comparable public outcry and breakdown. Adewale-Smatt Oyerinde of Nigeria Employers’ Consultative Association (NECA) said on Channels TV, August 20, that state finance commissioners owed citizens the same accounting the Federal Government had just given. Nigeria’s 36 governors, meeting in Abuja on August 26-27, answered instead with a new Compressed Natural Gas (CNG) transit programme with a promise that states would support CNG vehicle conversions, fleets and related infrastructure culminating in lower fuel cost; Bayelsa’s Governor Douye Diri called the accountability question a debate for another day.
Inside the ₦30.64 trillion: wage adjustments and the new minimum wage took ₦9.39 trillion (about $6.3bn); external debt servicing, swollen by Naira depreciation, took an almost identical ₦9.37 trillion (about $6.25bn); strategic infrastructure took ₦6.47 trillion (about $4.3bn); electricity subsidies ₦3.14 trillion (about $2.1bn); domestic debt servicing ₦1.24 trillion (about $827M).
Social welfare transfers, the incremental social-welfare initiatives closest to what Teriba and Ekpo propose, (precisely in NELFUND/student-loan programme, MOFI Real Estate Investment Fund and CREDICORP/consumer credit) received ₦423.8 billion (about $282 million), roughly 1.4% of total spending. A house cannot be called generous for the crumbs it lets fall from a table set for itself. Debt servicing alone consumed ₦10.6 trillion, more than two-thirds of everything removal raised.
Economists call this pattern the flypaper effect: a fiscal windfall sticks where it lands, absorbed into government’s own wages, debt service and capital projects, rather than flowing through to citizens. Mancur Olson, the American economist, explained why: concentrated claimants, civil servants, bondholders, contractors, capture a windfall more easily than 140 million poor Nigerians (living below the $4.20-a-day poverty line for lower-middle-income countries) with no comparable lobby machinery.
Other countries show this is a choice, not a law of nature. Indonesia’s 2005 Bantuan Langsung Tunai cash transfer reached up to 19.2 million households at $2.3 billion, close to a quarter of that year’s savings, more than eight times Nigeria’s 2.7%. India’s PAHAL scheme, Pratyaksh Hanstantrit Labh – literally, Direct Benefit Transfer of LPG subsidy, launched 2015, made direct transfers to 170 million-plus LPG consumers, though its own savings claims are disputed. This is one of the clearest relevant international examples.
The human case for scepticism sits in the poverty numbers. Nigeria’s poverty rate rose from a baseline of 51% before the 2023 reforms to 56% (2023), 61% (2024), 63% (2025, about 140 million people), projected to stay near 63% through 2026 despite macro stabilisation. Real GDP growth genuinely improved, from 3.38% (2024) to 3.87% (2025) to a projected 4.1-4.2 percent (2026, IMF).
Growth, improving while poverty holds near two-thirds of the population is the entire debate in miniature, and the real minimum wage, despite nearly quadrupling nominally, remains below its level a decade ago. Even though this is sometimes so, Nigeria’s medicine should not be her poison.
Poverty reduction is largely a subnational job: primary healthcare, schools, rural roads and social registers are state and local government fiscal responsibilities, making their ₦10.4 trillion at least as relevant as the Federal Government’s ₦423.8bn welfare line. BudgIT data show why: combined revenue available to Nigerian states rose from ₦4.84 trillion (2022) to ₦15.53 trillion (2025), 221%, yet education’s budget share fell from 14.85% to 12.35%, health’s from 7.8% to 6.65%, and states borrowing to cover deficits rose from 19 to 25 out of 36 states despite the windfall.
History gives Atiku’s promise a mixed verdict: a man who changes his cap three times before the market opens has not yet decided which harvest he is selling. Jonathan’s 2012 reversal eroded within years; Buhari’s 2016 increase was never reversed, and the definitive full removal did not arrive until Tinubu’s in 2023. No Nigerian government has ever reversed a subsidy removal once market pricing took hold, either reassurance that Atiku’s pledge is rhetoric rather than deliverable policy, or a warning of uncharted fiscal territory if he wins and tries it anyway.
A full return to blanket, price-fixing subsidy is out of question as it does not survive the arithmetic: Nigeria already borrowed ₦11.9 trillion just to cover the gap between savings and spending, and a fresh ongoing crude discount to domestic refiners on top of that, without a new revenue source, is not credible however carefully capped. But the purse that boasts of what it kept says nothing of what it owed before counting began, and the real failure was letting direct compensation remain a 1.4% which seems an afterthought.
Firstly, the Federal Government should publish a distinct, audited subsidy-savings ledger rather than letting savings arrive indirectly through tax collections. Secondly, future allocation should rebalance meaningfully toward direct transfers, not a rounding error. Thirdly, any future preferential crude arrangement should be capped and time-bound from the outset. Fourthly, the debt-servicing math, which quietly consumed two-thirds of total savings, deserves its own public reckoning instead of being left out of the argument entirely.
Fifthly, states and local governments, which received close to two-thirds of total savings, should publish their own category-level ledger, given the governors’ answer has been a new transport programme, and not an account of the ₦10.4 trillion received.
Comfort Okon’s radio will keep delivering contradictory verdicts on the subsidy question all the way to 2027, regardless of who eventually wins the argument. What her scale actually needs is not a debate about whether ₦15.8 trillion was saved, but a credible account of why, of the ₦30.6 trillion that followed it out the door, only a little over ₦400 billion found its way to people like her.
Akinola Morakinyo (Ph. D) writes on MINT economies from the Department of Economics, Finance & Quantitative Analysis, Kennesaw State University, GA, USA.
