ABUJA, Nigeria — Oyo State Gov. Seyi Makinde has rejected calls for Nigeria to restore its former petrol subsidy, arguing instead that the country should overhaul the way crude oil supplied to domestic refineries is priced so Nigerians can benefit from cheaper fuel. Makinde, the Allied Peoples Movement presidential candidate, made the remarks Monday while opening his campaign office in Abuja.
Makinde said his proposal had been misunderstood as support for returning to the subsidy system, under which the government absorbed part of the cost of petrol to keep retail prices artificially low. “That is not my position,” Makinde said. He argued that Nigeria should focus on reducing the underlying cost of producing fuel rather than subsidizing the final price at filling stations.
The governor questioned why crude oil supplied to Nigerian refineries should effectively be priced without giving consumers a clear advantage from Nigeria’s position as one of Africa’s largest oil producers. He said the benefit of domestic crude production should be reflected earlier in the refining process, rather than through government intervention after production and distribution costs have accumulated.
Makinde also called for greater transparency in how petrol prices are calculated. He said Nigerians should be able to see the costs associated with crude allocation, refining, transportation, distribution, taxes and retail margins. “Nigeria’s oil must provide a real and measurable benefit to Nigerians,” he said.
President Bola Tinubu ended the longstanding petrol subsidy shortly after taking office on May 29, 2023, saying the arrangement had become financially unsustainable. The move sharply increased petrol prices and contributed to higher transportation, food and business costs, making energy policy one of Nigeria’s most politically sensitive economic issues.
Tinubu’s government has defended the reform, saying money previously used to support the subsidy has strengthened government finances. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said in August that subsidy removal mobilized about 15.8 trillion naira in resources for the federation between June 2023 and December 2025. About 5.4 trillion naira went to the federal government, while roughly 10.4 trillion naira was distributed to states and local governments, according to the government’s figures.
The debate has become increasingly important ahead of Nigeria’s 2027 presidential election. Opposition politicians have questioned whether ordinary Nigerians have received enough benefit from the money saved after subsidy removal, while the federal government argues that returning to widespread subsidies could recreate the fiscal pressures that prompted the policy change.
Makinde’s position attempts to chart a middle course: keeping the subsidy abolished while seeking a pricing structure that gives locally refined fuel an advantage. His proposal comes as Nigeria’s domestic refining industry expands, led by the Dangote refinery, which has become a major supplier to the Nigerian market and is planning a multibillion-dollar expansion that could double its refining capacity by 2029.
The issue also has implications beyond Nigeria. Africa’s most populous country is a major crude producer but has historically depended heavily on imported refined petroleum products. Greater domestic refining could reduce exposure to foreign exchange swings and international supply disruptions, though crude prices, transportation costs, taxes and global energy markets would continue to influence what motorists ultimately pay.
For millions of Nigerians, however, the debate is more immediate. Petrol prices affect public transportation, food distribution, electricity generation for homes and businesses and the cost of operating small enterprises. Makinde said any new system should make those costs understandable to the public and allow Nigeria’s natural resources to translate into tangible economic benefits
