The removal of fuel subsidy altered the purchasing power of Nigerians and rejigged their lifestyle. In this report, CHIKA OKEKE examines plans by the Federal Government to ease burden on households.
From depreciating naira to dwindling foreign reserves and haphazardly remitted crude oil revenue, corruption infested every sector of the economy, driven by excess desire for unquestionable wealth.
These modified the economic outlook, introducing prolonged unemployment and exposing the weak government policies.
But on May, 29, 2023, President Bola Ahmed Tinubu ruled out the payment of subsidy on Premium Motor Spirit (PMS) from the third quarter of 2023.
He argued that based on the budget he inherited from the past administration of late President Muhammadu Buhari, subsidy was supposed to end by June, 2023. It implied that the subsidy ceased to exist from July 2023.
Before 2023, the Nigerian National Petroleum Company Limited (NNPCL) deducted subsidy payments directly at the source, leaving minimal revenue to share among the three tiers of government at Federation Account Allocation Committee (FAAC) meetings.
As at 2023, Nigeria spent more than $850 million monthly on fuel subsidy as revealed by the Nigerian National Petroleum Company Limited, NNPCL.
The announcement of fuel subsidy removal marked the beginning of hardship in a country that sold a litre of petrol between N180 to N195 in 2023, which currently sells ₦1400 to ₦1,500 in 2026.
To stabilise the already battered economy, President Tinubu's administration embarked on major reforms to address age-long economic challenges like the removal of fuel subsidy, exchange rate unification and introduction of a new tax regime.
For the past three years, the economy recorded exponential growth as seen in Nigeria’s Reform Scorecard titled “The Benefits, Costs and Harm Prevented."
The scorecard was presented by the Minister of Finance and Coordinating Minister of the Economy, Prof Taiwo Oyedele in August, 2026.
Oyedele had disclosed that savings from fuel subsidy removal and foreign exchange harmonisation increased accretion to the Federation Account through higher oil and non-oil receipts, and reduced encumbrances on future revenue.
He stated that the N15.8 trillion generated from the removal of fuel subsidy and the liberalisation of the foreign exchange in three years benefited Nigerians in 10 different ways.
More benefits
Currently, Nigeria consumes roughly 50 million litres of petrol a day, while returning to the subsidy era is expected to cost over N20 trillion yearly.
The subsidy savings resulted in wage increases and timely payment of salaries and pensions; settlement of pension arrears and gratuities owed to retirees; wealth creation for millions of Nigerians through capital market gains and transformative infrastructures development nationwide.
This is in addition to student loan schemes (NELFUND), and affordable consumer /SME credit; subsidised mortgage and housing schemes, plus social transfers to the most vulnerable, up to 15million households; agricultural interventions strengthening food security; as well as fuel availability and energy scarcity despite global shocks.
Already, Nigeria’s total incremental spending rose to ₦30.64 trillion between June 2023 and December 2025, irrespective of the gains recorded in subsidy removal.
Discounted relief
To lessen the burden placed on households, the Federal Government offered a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited (NNPCL), with priority for public transporters nationwide.
As petrol price rises nationwide, the Federal Government is optimistic that the discount will ameliorate the plight of Nigerians, proposing a N1,350 per litre on the ex-gantry or landing cost of petrol, to keep pump prices stable, even as the price is subject to review monthly.
While addressing journalists on 'Fuel Prices and the Subsidy Question' in Abuja, Oyedele noted that global crude or the exchange rate should not impact on pump prices.
Prof Taiwo Oyedele
The minister announced ten measures to ameliorate the high burden of fuel prices on Nigerians, which he said would not fully relieve the pressure on households.
They are margin discount at NNPC stations, forward sales of crude to domestic refineries, price modulation, removing illegal levies, more direct support and a faster Compressed Natural Gas (CNG) rollout.
This is in addition to an excess profit tax, less red tape, establishment of National Strategic Fuel Reserve and better traffic and logistics management.
The minister was emphatic that none of the measures restores a blanket subsidy, adding that reversing the subsidy would amount to creating longer term harm for a short-term cure.
Though analysts endorsed the discount described as a temporary relief, questioning the rationale behind the hasty decision, three years after Tinubu removed subsidy on PMS.
They are optimistic that the decision was reached to enable the President to attract sympathy votes from Nigerians ahead of his second tenure, while inflation continues to bite hard on the economy.
Global shock
By mid-September, shipping through the Strait of Hormuz was running at roughly 13 percent of its pre-war level. Brent crude is trading at over USD 100 a barrel, almost 50 percent higher than before the war.
Oyedele said that the elevated fuel prices is caused by a global shock and felt everywhere.
Diesel exports from the Middle East and Russia are down 75 percent from a year ago. Also, crude tanker rates from West Africa reached record highs in September as the world scrambled for supply outside the Gulf.
Between June 2023 and December 2025, the Federation Account received N15.8 trillion, being proceeds from subsidy removal. Out of the lump sum, states and local governments got N10.4 trillion.
Oyedele added: "By the International Energy Agency’s (IEA) count, more than 50 countries have adjusted energy taxes; Nigeria has done even more by granting a full waiver of taxes and duties on petrol, worth over N3.3 trillion for the year, up to 30 September 2026.
CNG fallout
A recent data released by the Nigeria Customs Service (NCS) revealed that imports of CNG–powered vehicles including tricycles, electric vehicles and renewable energy equipment doubled since May 2023, with duty waivers of over N100 billion.
More than 120,000 vehicles now run on CNG, served by over 400 conversion centres, 96 refuelling stations and 18 Liquefied-to-Compressed Natural Gas (L-CNG) stations.
This was intended to reduce the cost of transportation, even as the government yanked off taxes on electric vehicles and solar equipment, while slashing import duties on all vehicles.
The Federal Government is also working on a comprehensive package to reduce inflation to a sustainable single digit, in the near future.
A motorist, Mr Kennedy Ufot said that he converted his car engine to CNG to save cost for his family upkeep but regretted that the decision resulted in more expenditure.
Ufot noted that his car engine knocked on two different times, which his auto technician attributed to CNG conversion.
Another motorist, Mrs Linda appealed to the Federal Government to reconsider reversing the subsidy withdrawal, which she linked to escalating food prices, house rents, tuition fees and unemployment.
Resilience
Irrespective of the narratives surrounding fuel subsidy removal, the nation's number image maker had been working assiduously to counter the tales and reassure Nigerians of better days ahead.
The Minister of Information and National Orientation, Alhaji Mohammed Idris said that the briefing reflected President Tinubu’s ongoing commitment to open communication, ensuring that Nigerians are regularly informed about the government policies and the true state of our economy.
He noted that at 63, Nigeria remains a nation of enormous promise, sustained by the resilience, enterprise, and optimism of its people. Emphasising on Tinubu's Independence Day broadcast, he informed that Nigeria is transitioning from reform to prosperity.
"History reminds us of our extraordinary capacity to overcome adversity whenever we are called upon to address structural distortions, strengthen public finances, and redirect national resources toward critical priorities that support sustainable growth," he added.
Idris informed that the economy currently stands on a stronger foundation than it did when President Tinubu took office in May 2023, creating a more enabling fiscal environment for investments and businesses to flourish.
The President's tall ambition is to build a $1 trillion economy by 2030, to be driven by production and investment, while creating opportunities for the youth, industrial growth, improvement in agriculture and tangible living standards for Nigerians.
Countering Tinubu's economic trajectory, analysts informed that the Federal Government should have built a new refinery from the subsidy savings to overcome hardship and inflation.
PETROAN's demand
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has extensive grassroots presence and direct relationship with petroleum consumers.
National President of PETROAN, Dr. Billy Gillis-Harry was hopeful that the discount could provide significant economic relief if transparently and efficiently implemented with clear guidelines on the exact discount per litre, eligible beneficiaries, monitoring mechanisms and distribution channels.
He stated that the policy could reduce the cost of moving agricultural produce from rural communities to urban markets.
This is expected to help moderate the prices of food and other essential commodities, particularly where transportation and logistics account for a significant portion of the final cost.
PETROAN informed that lower transportation costs could support small businesses, traders, farmers, manufacturers and other productive sectors that depend heavily on road transportation.
Gillis-Harry praised the Federal Government for recognising the strategic importance of transportation to the Nigerian economy.
Beyond the transportation sector, he said: "When transport operators spend less on petrol, commuters could benefit from more affordable fares, traders could move goods at lower costs, farmers could access markets more efficiently, and businesses could reduce logistics expenses."
The PETROAN National President stated that the success of the policy should not only be measured by the volume of petrol sold at a discount but also by its actual impact on transportation fares, food prices, business operating costs and household purchasing power.
He enjoined NNPCL, transport operators, petroleum marketers, relevant government agencies and other stakeholders to cooperate fully to ensure that the intervention achieves its intended objectives.
While requesting for 30 percent share of the discounted petrol for onward distribution to the grassroots, the association pleaded with the Federal Government to carefully assess the outcome of the programme and inflationary pressures.
Analysts argued that the reversal of fuel subsidy may not be feasible given the rise in the Federal Government's incremental spending.
Till date, Nigerians are still struggling to scale through the weighty effect of subsidy removal despite the impressive economic performance.
NNPCL's support
The NNPCL reaffirms its commitment to supporting the Federal Government’s efforts to provide relief for Nigerians amid elevated global crude oil prices arising from the Middle East conflict and the resulting impact on domestic petrol prices.
Chief Corporate Communications Officer of NNPC Ltd, Andy Odeh said that before the announcement, NNPC Limited had introduced a sales discount on 1 October 2026 to commemorate Nigeria’s 66th Independence Anniversary.
"This will now continue until 31 October 2026 across NNPC Retail stations nationwide. This discount is a customer relief initiative and does not represent the reintroduction of petroleum subsidy.
It is the responsibility of the government to guarantee employment for uncountless or the enabling environment for Nigerians keen on engaging in successful enterprise. Without providing sustainable means of livelihood for its citizens, the nation cannot achieve the desired development.
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