Nigeria’s 2027 presidential campaign has barely begun and the country’s politicians have already reached for one of the oldest instruments in the electoral cupboard: the promise of cheap fuel. Former vice-president Atiku Abubakar has made the restoration of petrol subsidy a prominent part of his campaign pitch, arguing that Nigerians have endured the pain of subsidy removal without seeing commensurate benefits and asking, in effect, where the money has gone. His question is legitimate.
His proposed answer is not. Atiku is right to ask what happened to the fiscal gains from subsidy reform. He is wrong to imply that the appropriate remedy is to resurrect the very subsidy whose cost, opacity and distortions helped make reform unavoidable.
That is not economic statesmanship. It is a cheap electoral gimmick dressed up as social policy. The subsidy was never free petrol. It was a fiscal transfer, with government absorbing the difference between the market cost of petrol and the price paid at the pump. Before its removal, the system was enormously expensive and notoriously difficult to police. The World Bank estimated that ending the subsidy could save about ₦2 trillion in 2023 and more than ₦11 trillion by 2025 relative to continuing it. It also warned that poor households needed targeted compensation because higher petrol prices would otherwise push vulnerable Nigerians deeper into poverty. Therein lies the crucial distinction that Atiku has preferred to obscure: the failure was not necessarily removing the subsidy. The failure was failing to make Nigerians feel, see and measure the dividend from its removal. That is a very different indictment.
The subsidy was removed; the social contract was not replaced.
The economic case against the old subsidy remains formidable. Cheap petrol sounds like assistance to the poor. In practice, an untargeted subsidy subsidizes everyone who buys petrol, including people who consume vastly more fuel than poorer Nigerians. It also encourages waste, including the use of petrol for private generators, and created opportunities for smuggling and rent-seeking. The World Bank has documented these distortions and warned about the risks of returning to the old arrangement. The IMF likewise says reforms since 2023; including ending fuel subsidies, have improved Nigeria’s fiscal and external position. But it has simultaneously delivered a rather devastating rebuke to the government’s implementation: the estimated savings from subsidy removal had not clearly accrued to the budget in 2025, while tracking precisely where the savings went remained a challenge.
That is the real scandal. Not that Nigeria stopped paying people to consume petrol. But that Nigerians were asked to endure the pain of reform without receiving a sufficiently visible, credible and targeted replacement. The IMF’s prescription is hardly radical: ensure the savings reach the budget, protect growth-enhancing investment and accelerate cash transfers to households experiencing food insecurity.
In other words: stop subsidizing petrol and start subsidizing people’s ability to live. That is the policy debate Atiku should be having. The savings from subsidy removal should be converted into a national cost-of-living program whose benefits Nigerians can actually touch. That means mass transit that makes commuting cheaper; reliable electricity that reduces the obscene dependence on petrol and diesel generators; agricultural productivity that lowers food costs; health and education spending that reduces household expenditure; targeted cash transfers; and infrastructure that reduces the cost of moving goods from farm to market.
It also means investing in domestic refining and a genuinely competitive petroleum market so that Nigerians are not perpetually exposed to the fiscal consequences of importing refined fuel. The logic is straightforward. If a Nigerian spends less on electricity because the grid works, less on transport because public transit works, less on food because agricultural logistics work, and less on healthcare because public hospitals work, the government has reduced the cost of living without having to subsidize every liter of petrol consumed. That is a much more intelligent subsidy. The World Bank’s recommendation is similarly pointed: continue moving towards a competitive petrol market while directing targeted assistance towards vulnerable Nigerians. The objective should therefore not be cheap petrol. It should be a cheaper life. Those are not synonymous.
But Atiku has identified a genuine political failure. It would be intellectually lazy to dismiss his argument merely because subsidy restoration is economically problematic. He has identified the Achilles heel of the reform: the government has not convincingly demonstrated that the savings are being converted into broad improvements in living standards. Indeed, the government’s own account illustrates the complexity. The Federal Government says that between June 2023 and December 2025, estimated subsidy savings amounted to ₦15.8 trillion for the federation, with ₦5.4 trillion accruing to the federal government and ₦10.4 trillion shared among states and local governments. But the Finance Minister has also said that much of the fiscal benefit was absorbed by higher debt-servicing costs and increased government expenditure. That may be fiscally defensible. It is politically inadequate.
A mother whose food bill has doubled is unlikely to be comforted by an explanation about sovereign debt dynamics. A bus driver whose operating costs have soared does not experience improved fiscal buffers. A small manufacturer facing high energy costs cannot eat macroeconomic stability. Reform must eventually graduate from spreadsheet virtue to household reality. That is where the Tinubu administration deserves its harshest scrutiny. Yet Atiku’s answer risks replacing one problem with another. Reinstating the subsidy would restore a visible benefit at the pump while recreating an invisible liability in the public finances. It would consume resources that could otherwise finance precisely the interventions Nigerians need most. It would also send a dispiriting signal about Nigerian economic policy: reforms survive only until the next election. That is a dangerous precedent.
If every painful but necessary reform can be reversed whenever politicians smell electoral opportunity, investors will discount Nigerian policy commitments accordingly. Governments will become reluctant to undertake difficult reforms; citizens will learn to wait for the next politician promising to reverse them; and the country will remain trapped in the fiscal cycle that produced the original problem. There is, moreover, something politically cynical about asking citizens to remember only the price of reform while forgetting the cost of the system that preceded it. Atiku should therefore answer a more demanding question than “Where is the subsidy money?” He should tell Nigerians: How much would reinstatement cost each year? Where would the money come from? Which hospitals, schools, roads, power projects or social programs would be sacrificed to finance it? How would he prevent smuggling and diversion? And why should a wealthy Nigerian with three cars receive the same subsidy per liter as a poor household? Until those questions are answered, subsidy restoration is less a policy than a campaign sedative.
Nigeria does not need to choose between cruel reform and irresponsible populism. It can retain subsidy removal while demanding something much more important from government: visible, transparent and targeted use of the fiscal space it creates. Publish the savings. Track them. Ring-fence a meaningful share for poverty reduction and productivity-enhancing investment. Expand cash transfers. Build mass transit. Fix electricity. Reduce food-production and logistics costs. Invest in healthcare and education.
Publish measurable outcomes. And make the political class explain, naira by naira, what citizens received in return for the pain. That would turn subsidy reform from an act of fiscal amputation into an instrument of national renewal.
Atiku is right about one thing: Nigerians deserve to know where the money went. But his proposed remedy confuses the failure to spend the savings well with the wisdom of abandoning the reform that generated them. Nigeria’s problem is not that petrol has become too expensive for government to subsidize. It is that life has become too expensive for ordinary Nigerians to endure. The answer should therefore be neither sentimental subsidy nor austerity without compensation. It should be a much harder bargain: No more subsidizing petrol for everybody. Start subsidizing the Nigerian citizen’s ability to live, work and prosper. That would be reform with a social conscience; and a considerably better campaign promise than yesterday’s cheap-petrol politics.