Fuel now costs Nigerians more than seven times its former price, where is the subsidy dividend?

By Daniel Nduka Okonkwo

Oil-producing jurisdictions have adopted different approaches to ensuring that natural-resource wealth benefits their populations. Alaska distributes annual dividends to eligible residents from the earnings of its Alaska Permanent Fund, while Norway invests petroleum revenues through its Government Pension Fund Global to preserve national wealth and support public spending over time. Iran, meanwhile, introduced cash transfers alongside its 2010 energy-subsidy reforms to cushion households against higher energy prices. Although these models differ in structure and purpose, they raise an important question for Nigeria: what tangible benefits have ordinary citizens received from the resources released by petrol subsidy removal? Since President Bola Ahmed Tinubu announced the policy in May 2023, higher fuel costs have placed additional pressure on transport, food prices, and household purchasing power. The public-interest test is whether verifiable records demonstrate that the resulting fiscal gains have translated into meaningful improvements in citizens’ lives.

Nigeria’s subsidy debate is therefore about more than the justification for removing government support for petrol. It concerns the scale of the resources released, their subsequent allocation and expenditure, and the extent to which citizens have benefited. The government has defended the reform as necessary to reduce fiscal pressure and redirect public resources towards other priorities. Yet the success of such a policy cannot be established by the announcement of savings alone. It must be assessed against documented expenditure, actual disbursements, and measurable outcomes.

Subsidies operate across several sectors, but their financial structures and intended beneficiaries differ. Petrol subsidy removal changed the relationship between government expenditure, fuel pricing, and public revenue. Electricity subsidies cover part of the gap between regulated customer tariffs and the cost of supplying power. Food interventions seek to make selected staples more affordable, while agricultural support, tax concessions, and student loans pursue different economic and social objectives. These programmes cannot be treated as a single account. Each requires scrutiny of its funding, disbursement, beneficiaries, and measurable outcomes.

The cost of petrol remains one of the most visible indicators of the pressure on Nigerian households following subsidy removal. The scale of the former subsidy was substantial. The Nigerian National Petroleum Company Limited put its 2022 subsidy expenditure at N4.39 trillion, while a Finance Ministry study estimated N3.74 trillion for the same year. Before the policy change in May 2023, petrol was sold at approximately N189 per litre at many outlets, although prices varied by location and supply conditions. Prices subsequently rose sharply. By October 2026, reported pump prices at NNPC stations ranged from approximately N1,355 to N1,435 per litre, while the Dangote refinery’s reported Lagos depot price reached N1,348 per litre on 15 October. These figures represent more than seven times the pre-removal pump price in some comparisons. They are dated market observations, not a uniform national price, and exchange rates, crude oil prices, distribution costs, and other market conditions also influence retail prices. Nevertheless, the consequences for households and businesses dependent on road transport are clear: petrol consumes a substantially larger share of many budgets, with further effects on transport fares, food distribution, and operating costs.

In August 2026, the Federal Ministry of Finance published its economic reform scorecard, setting out the government’s account of the fiscal effects of reforms between June 2023 and December 2025. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele presented the figures on 19 August, estimating that subsidy savings across the Federation amounted to N15.8 trillion. Of this amount, the Federal Government’s share was N5.43 trillion, while states received N6.52 trillion and local governments N3.88 trillion. Oyedele explained that the savings did not arrive as a single credit labelled subsidy savings but were reflected in Federation Account revenue collections. The scorecard, therefore, does not support the claim that the entire N15.8 trillion accrued to the Federal Government or remained in a single federal account. The figures establish the government’s reported fiscal position, but the distribution of additional revenue across the three tiers of government does not, by itself, establish the benefits ultimately delivered to citizens.

The same scorecard presents a more complicated picture of the Federal Government’s finances. It records N20.4 trillion in incremental federal resources, comprising N5.43 trillion in the Federal Government’s share of estimated subsidy savings, N3.12 trillion in other incremental revenue, and N11.85 trillion in incremental borrowing. Borrowing, therefore, accounted for approximately 58 per cent of these additional resources, compared with about 27 per cent from subsidy savings. Over the same period, the government recorded N30.64 trillion in incremental expenditure pressures, of which N20.404 trillion was funded from the additional resources and the balance from the existing revenue base. The largest items included N9.39 trillion for wage adjustments, minimum-wage increases, and allowances; N9.37 trillion for the increased naira cost of external debt service following exchange-rate depreciation; N6.47 trillion for strategic infrastructure; and N3.14 trillion for electricity subsidy costs. Domestic debt service added another N1.24 trillion, bringing the reported increase in debt-service costs to N10.61 trillion, approximately N4.14 trillion more than the amount allocated to strategic infrastructure. Oyedele acknowledged that the higher federal wage bill alone exceeded the Federal Government’s entire share of the estimated savings. The scorecard also lists N423.8 billion for social welfare transfers, approximately 1.4 per cent of the incremental expenditure pressures. These figures show that the reform’s fiscal consequences cannot be assessed by quoting the headline savings alone.

The figures also raise questions about expenditure priorities, funding adequacy, and measurable public benefits. They do not, by themselves, establish whether every expenditure was efficiently executed or whether citizens received benefits proportionate to the economic costs they absorbed. The published scorecard provides the government’s explanation of its fiscal position; it is not a substitute for independently verifiable payment records, project audits, and beneficiary data. The infrastructure figures make this distinction particularly important. According to reports on the scorecard, the Lagos-Calabar Coastal Highway received N2.23 trillion, the Sokoto-Badagry Superhighway N1.11 trillion, and the Trans-Sahara Superhighway N489.3 billion. Together, these three projects accounted for nearly 60 per cent of the strategic infrastructure allocation. To assess the public value of this expenditure, citizens need verifiable information on contract sums, actual disbursements, project milestones, completion status, and independent assessments of what has been delivered. Similarly, the reported wage expenditure establishes the scale of the government’s personnel costs, but does not show whether workers’ income gains kept pace with increases in transport, food, and housing costs.

The Federal Government’s ertilizer rice programme provides a more direct example of the distinction between an announced intervention and actual access to relief. In 2024, the government announced plans to sell 30,000 metric tonnes of milled rice at N40,000 for a 50-kilogramme bag in response to rising food prices. The sale was initially scheduled to begin on 1 August 2024 but was suspended before the programme was eventually flagged off in September. Access was organised through identification and eligibility requirements. Buyers were verified using their National Identification Numbers, public servants were checked through the Integrated Personnel and Payroll Information System, and purchases were limited to one bag per person. In Sokoto, beneficiaries were also required to present an ATM card loaded with the purchase price. Information Minister Mohammed Idris acknowledged at the time that supplies were insufficient. These arrangements established the intended price, quantity, and access conditions; they did not, on their own, establish how many eligible Nigerians eventually obtained rice at the announced price.

Records reported about Sokoto State further demonstrate why a local allocation must not be mistaken for a national distribution total. The Federal Ministry of Information and National Orientation reported that Sokoto was allocated 19,800 bags, equivalent to 990 metric tonnes, or 3.3 per cent of the announced national quantity. Of these bags, 12,870 were reserved for state civil servants, while the balance was intended for federal civil servants and private-sector workers. These figures describe the reported allocation to Sokoto, not the quantity distributed throughout Nigeria. A credible national assessment requires a reconciled distribution record showing the quantities delivered to each state, stock received and sold, prices charged, unsold balances and the number of beneficiaries served. Without these records, the programme’s actual reach cannot be established from the headline announcement. Nor does restricted distribution, without further evidence, prove corruption or deliberate exclusion. The central issue is whether the public record demonstrates that the intervention reached its intended beneficiaries at the announced price.

Electricity subsidy records provide a sharper illustration of the difference between a financial obligation and an actual payment. According to the Nigerian Electricity Regulatory Commission, the Federal Government’s electricity tariff subsidy obligation reached approximately N1.928 trillion in 2025. This comprised N536.4 billion in the first quarter, N514.35 billion in the second, N458.75 billion in the third, and N418.79 billion in the fourth. However, the media review of sector figures found that only N76.95 billion was recorded as paid towards the 2025 subsidy, leaving an estimated N1.85 trillion unfunded. The reported payment represented approximately four per cent of the annual obligation. These figures must be distinguished carefully: N1.928 trillion describes the reported obligation, while N76.95 billion represents the amount reported as paid. An assessed liability cannot be presented as though the same amount has already been disbursed. The obligation continued into 2026. NERC reported N358.32 billion for the first quarter and N321.26 billion for the second, bringing the first-half total to N679.58 billion, approximately 35 per cent below the corresponding period in 2025. NERC attributed the second-quarter decline mainly to a 3.40 per cent fall in electricity offtake by distribution companies, rather than a change in tariffs, which remained frozen at July 2024 levels.

Daniel Nduka Okonkwo is an investigative journalist, human rights advocate, and policy analyst.