By Segun Adesemoye
The decision did not come without controversy. Previous administrations had recognised the growing burden of fuel subsidy and made attempts to phase it out, but the policy remained politically difficult to dismantle. Tinubu’s administration ultimately proceeded with its removal, setting the country on a new and painful economic path.
There is no denying that the removal brought serious hardship.
Petrol prices rose sharply, transportation costs increased and the prices of food, goods and essential services followed. Workers saw the purchasing power of their incomes decline, small businesses faced higher operating costs, and many families were forced to cut back on their daily needs.
These realities must not be ignored. Nigerians have made enormous sacrifices, and supporting fuel subsidy removal should never mean denying or dismissing their suffering.
However, the hardship created by the reform does not automatically make the old subsidy system sustainable or worthy of restoration.
A SYSTEM THAT BECAME TOO COSTLY
Fuel subsidy was originally intended to make petrol affordable for Nigerians. Over the years, however, the system became increasingly expensive, difficult to manage and vulnerable to abuse.
Nigeria's subsidy regime was associated with questionable claims, smuggling, opaque payments and significant pressure on public finances. The World Bank estimated that petrol subsidies cost Nigeria more than ₦8.6 trillion between 2019 and 2022. It also found that the poorest 40 per cent of Nigerians purchased only about three per cent of subsidised petrol, highlighting how disproportionately the benefits could flow to higher-income consumers.
Nigeria’s low domestic petrol prices also created strong incentives for cross-border smuggling, with subsidised fuel finding its way into neighbouring countries where it could be sold at higher prices.
This exposed a fundamental weakness in the system.
A policy designed to protect ordinary Nigerians was consuming enormous public resources while failing to effectively target those who needed assistance the most.
The question, therefore, should not simply be whether Nigerians want cheaper petrol. Of course they do.
The more important question is whether subsidising petrol for everyone is the most effective and sustainable way for government to protect the poor. It is not.
WHY THE DECISION WAS NECESSARY
Nigeria could not indefinitely devote enormous public resources to maintaining an artificially low petrol price while struggling to finance infrastructure, healthcare, education, electricity, security and employment.
In his 2023 inaugural address, President Tinubu argued that the subsidy had increasingly favoured the rich over the poor and that the resources should instead be redirected towards infrastructure, education, healthcare and jobs.
That argument deserves serious consideration.
Leadership is not always about taking the most popular decision. Sometimes, it requires taking a difficult decision whose immediate consequences are painful but whose long-term objective is to protect the country from a deeper crisis.
The removal of subsidy has also created an opportunity for Nigeria to rethink its petroleum industry and reduce its long-standing dependence on imported refined products.
The growth of domestic refining capacity, including the emergence of the Dangote Refinery and efforts to rehabilitate government-owned refineries, offers Nigeria an opportunity to retain more value within the country, conserve foreign exchange and strengthen energy security.
But this opportunity will only matter if it translates into real economic benefits for Nigerians.
GOVERNMENT MUST DELIVER ON ITS RESPONSIBILITY
Removing subsidy was only the beginning of the reform. The real test is what government does with the resources freed from the old system.
Nigerians cannot continue to make sacrifices indefinitely without seeing tangible improvements in their lives.
The benefits of reform should be reflected in reliable electricity, efficient public transportation, affordable healthcare, better education, agricultural development, job creation, infrastructure and targeted support for vulnerable households.
Increased revenue available to the federal, state and local governments must not simply disappear into recurrent expenditure. Citizens should be able to see the impact in their communities.
Government must also demonstrate fiscal discipline.
It is difficult to ask ordinary Nigerians to endure rising living costs while public officials continue to enjoy privileges and lifestyles that appear disconnected from the economic realities facing the population.
The sacrifice must be shared.
PROTECTING NIGERIANS MUST REMAIN A PRIORITY
The fact that subsidy removal was necessary does not mean government should leave Nigerians to bear its consequences alone.
The reform must be accompanied by effective social protection.
Rather than returning to a universal subsidy that benefits rich and poor alike, government should develop better-targeted interventions for vulnerable Nigerians.
Affordable mass transportation, support for small businesses, agricultural assistance, skills development, employment programmes and direct social protection can provide more meaningful relief than subsidising every litre of petrol consumed in the country.
The government must also intensify efforts to control inflation and create an environment in which businesses can survive and expand.
A sound economic reform can lose public confidence when the benefits are delayed, poorly distributed or obscured by waste and weak implementation.
NIGERIA MUST NOT RETURN TO THE PAST
Restoring the old subsidy system may provide temporary relief at the pump, but it would also risk returning Nigeria to the same cycle of enormous public expenditure, borrowing pressures, smuggling, weak accountability and fiscal uncertainty.
The answer to today’s hardship is therefore not to revive an inefficient system simply because Nigerians are hurting.
The answer is to make the reform work.
Government must ensure that the resources saved are transparently managed and invested in areas that improve the productive capacity and quality of life of Nigerians.
President Tinubu deserves recognition for taking on a reform that successive administrations struggled to fully implement. But commendation for taking the decision should not mean giving government a blank cheque.
The administration must now demonstrate that the sacrifice Nigerians have made is producing results.
Fuel subsidy removal must not become an excuse for endless hardship. It must become the foundation for a more transparent, productive and self-reliant Nigerian economy.
Nigeria must not return to the old subsidy regime.
But neither should the sacrifices of Nigerians be taken for granted.
The success of the reform will ultimately be measured not by the amount of money government saves, but by whether ordinary Nigerians can eventually see, feel and benefit from the better economy those savings were meant to create.
Segun Adesemoye is the President of the Yoruba Heritage Group. He writes from Onajin Street, Ondo.