The Presidency has warned that any attempt to restore Nigeria’s petrol subsidy regime could undermine the Nigerian National Petroleum Company Limited and reverse some of the economic changes introduced since subsidy removal in 2023.
The warning was issued by the Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, amid renewed debate over whether the government should provide greater relief to Nigerians through intervention in petrol prices.
Onanuga argued that bringing back the subsidy would place additional financial pressure on NNPC and potentially weaken the company’s ability to operate as a commercially oriented energy company.
The Presidency’s position comes after renewed calls from some political figures for government intervention in petrol pricing. In September, NDC vice-presidential candidate Rabiu Kwankwaso said an administration led by Peter Obi would introduce fuel subsidy in a different form if elected in 2027. The NDC and Obi’s camp subsequently backed the proposal.
Kwankwaso has argued that government should seek ways of reducing the burden of high petrol prices on Nigerians while avoiding the problems associated with the previous subsidy regime.
The renewed disagreement therefore reflects two different approaches to managing petrol prices: maintaining the market-oriented system adopted after subsidy removal or introducing some form of government intervention to reduce the price paid by consumers.
President Tinubu announced the removal of petrol subsidy during his inauguration on May 29, 2023. The policy subsequently resulted in a sharp increase in petrol prices and contributed to higher transportation and living costs, while the government maintained that the previous arrangement was placing unsustainable pressure on public finances.
The Federal Government has repeatedly defended the decision. In August, Information and National Orientation Minister Mohammed Idris argued that restoring the subsidy would undermine Nigeria’s improving fiscal position and potentially reduce investor confidence. He said subsidy removal had created additional resources for the three tiers of government.
The minister said approximately N15.8tn in resources accrued to the Federation between June 2023 and December 2025, although he stressed that the figure represented resources released through the Federation’s wider fiscal system rather than a separate pool of cash.
The government has also pointed to investments in infrastructure, social programmes and other sectors as areas that could benefit from the additional fiscal space created by the removal of petrol subsidy.
Other economic groups have raised concerns about the financial implications of reversing the policy. The Centre for the Promotion of Private Enterprise estimated earlier this month that a return to universal petrol subsidy could expose the government to an annual bill of about N19.16tn, based on its assumptions about petrol consumption and the subsidy required per litre.
The organisation warned that such expenditure could compete with funding for infrastructure, education, healthcare, security, agriculture and social protection.
The Presidency’s latest warning also comes as the government promotes compressed natural gas as an alternative to petrol and diesel.
Tinubu recently ruled out a return to petrol subsidy, saying Nigeria should instead accelerate its transition to cheaper domestic energy sources, particularly CNG. The President said the government had been developing a CNG transportation ecosystem as part of efforts to reduce transportation costs.
According to the President, more than 120,000 vehicles had been converted to CNG, with more than 400 certified conversion centres and over 90 refuelling stations operating across the country.
The government has argued that expanding CNG-powered transportation could allow Nigerians to benefit from lower operating costs without returning to a petrol subsidy system.
However, the debate over subsidy remains closely connected to the immediate financial pressure faced by households and businesses. Petrol prices affect transportation, food distribution, production and the cost of services across the economy.
While the government says subsidy removal is necessary for fiscal sustainability, proponents of some form of subsidy intervention argue that government should provide relief where high energy costs are placing excessive pressure on citizens.
The latest warning from the Presidency therefore adds another layer to the growing economic and political debate over Nigeria’s fuel policy.
For the Tinubu administration, the focus remains on sustaining market reforms while expanding alternative energy and transportation systems. For advocates of a new subsidy arrangement, the central argument is that government intervention could provide consumers with immediate relief.
The disagreement is expected to remain a significant economic issue as Nigeria approaches the 2027 general elections, with political parties and candidates likely to present different proposals for addressing fuel prices, energy security and the cost of living.
