The debate over fuel subsidies has re-emerged as a significant fault line in Nigeria's 2027 presidential election. President Bola Tinubu, who removed the subsidy in May 2023, argues that its restoration would be economically reckless, citing the financial burden and opportunities for abuse under the previous system. The Finance Ministry claims that subsidy removal and foreign exchange liberalization generated N15.8 trillion in additional resources for the federation between June 2023 and December 2025, with N5.4 trillion for the federal government and N10.4 trillion distributed to states and local governments.
In contrast, former Vice President Atiku Abubakar has made the restoration of fuel subsidies a central plank of his 2027 campaign. He contends that the subsidy removal has not delivered expected benefits to ordinary Nigerians, leading to a rising cost of living without significant improvements in public services. However, the ruling All Progressives Congress (APC) has criticized Abubakar's proposal, warning that it could reverse economic gains and lead to fiscal pressures, impacting wages, education, infrastructure, and overall state financial stability.
The presidency emphasizes that restoring the subsidy would mean either diverting funds from infrastructure, state allocations, or increasing borrowing and debt. They point out that the real cost of petrol is estimated between N1,200 ($0.89) and N1,300 ($0.96) per liter, and someone would have to cover the difference if the subsidy were reimposed. Since the subsidy's removal, monthly allocations to federal, state, and local governments have significantly increased, with gross federal account revenue reaching N5.15 trillion (about $3.8 billion) in July 2026 alone, enabling initiatives like a doubled minimum wage.
