By Yemisi A. Olagunju
President Bola Ahmed Tinubu has repeatedly taken credit for removing the fuel subsidy, most recently during his birthday iftar. By his own account, he wanted to safeguard the future of the country’s youth and redirect critical funds toward national development. Indeed, if properly managed, this policy shift may be one of the most significant decisions of his presidency. Yet for it to truly improve the lives of Nigerians—and not become just another unfulfilled promise—three crucial conditions must be met.
- Ensuring the Savings Actually Serve Nigerians
The Claim:
A core argument for removing the subsidy was to free up funds previously spent on subsidizing petroleum products and reinvest them in public infrastructure, education, and healthcare. These funds, distributed across the three tiers of government, should—in theory—improve the average Nigerian’s quality of life.
The Skeptic’s Eye:
- Accountability Gap: History has shown that money “saved” at the federal level does not always translate into tangible projects on the ground. Without robust oversight, those funds could just as easily vanish into bureaucratic or political black holes.
- Transparency vs. Political Interests: How will citizens track these funds to ensure the money actually goes toward building roads, revitalizing schools, and stocking clinics? Will there be easily accessible public records, or will Nigerians have to rely on opaque press releases?
- Timing and Visibility: Even if these investments occur, infrastructure improvements and better healthcare systems take time to materialize. How soon should Nigerians expect to see dividends? A lack of immediate results might foster skepticism and erode public trust.
Possible Path Forward:
- Detailed Public Audits: Publish regular, itemized breakdowns of how the subsidy savings are being allocated.
- Citizen Monitoring: Encourage civil society and media to investigate whether local governments truly receive—and responsibly spend—their share of the funds.
- Federal–State Coordination: Clear agreements on performance metrics and public reporting can help curb the misuse of funds at every level of government.
- Preventing Market Capture by Private Oligarchs
The Claim:
By transitioning from state-controlled fuel pricing to a free-market regime, Nigeria expects competition to lower costs and improve fuel availability. This would, in theory, shift the locus of economic power from government bureaucrats to market forces that better serve the public interest.
The Skeptic’s Eye:
- Oligopoly Danger: In many sectors, “free market” can be a euphemism for private cartels—small groups of large players that collude to keep prices high and quality low. If these non-state actors capture the market, the removal of subsidy merely swaps one form of exploitation for another.
- Limited Access: Even if prices stabilize, there is no guarantee they will settle at a level affordable to the average Nigerian, especially if key distribution channels are controlled by a handful of powerful interests.
- Regulatory Independence & Empowerment: Institutions like the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Federal Competition and Consumer Protection Commission (FCCPC) must be strong and independent. If they lack the will or capacity to enforce fair competition, or if they can be easily influenced by big industry players, the public bears the cost.
Possible Path Forward:
- Robust Regulatory Frameworks: Strengthen antitrust measures to ensure no cartel can dominate supply lines or manipulate prices.
- Active Enforcement: FCCPC and NMDPRA must have not only the mandate but also the political backing (and funding) to investigate and penalize anti-competitive behavior swiftly.
- Periodic Market Reviews: Conduct regular assessments of market dynamics to detect early signs of collusion or price fixing, publishing results so the public can hold regulators and operators accountable.
- NNPCL as a World-Class NOC
The Claim:
As the national oil company (NOC), the Nigerian National Petroleum Company Limited (NNPCL) has a unique role. It must operate on a commercial basis, earn profits, and drive growth while also serving the national interest. Ideally, NNPCL should compete with the likes of Saudi ARAMCO, Petrobras, or other successful state-owned oil giants.
The Skeptic’s Eye:
- Structural Baggage: NNPCL’s deep-rooted legacy challenges—ranging from allegations of corruption to political interference—raise questions about how quickly or thoroughly it can transform.
- Operational Transparency: Are the company’s books open enough to track revenue, expenditures, and deals? If not, inefficiencies or profit leakages can persist unseen.
- Professionalism vs. Patronage: The biggest risk is capture by “moneybags” with political influence. If patronage networks steer NNPCL’s decisions then true reform is a distant dream.
Possible Path Forward:
- Corporate Governance: Clearly defined board responsibilities, strengthened whistleblower protections, and ensure the top leadership is chosen through transparent, merit-based processes.
- Comparative Benchmarks: Continually compare NNPCL’s performance using internationally tracked benchmarks by other NOCs and IOCs in the entire value chain, from exploration and production, through trading returns to refining and distribution, setting aggressive but achievable targets for operational efficiency and transparency.
- Public Reporting: Build confidence through quarterly publication of key performance metrics—production rates, refining output, revenues, etc.—in an easily digestible format for public scrutiny.
Why These Conditions Matter
Removing subsidy in itself does not automatically guarantee Nigeria’s socioeconomic transformation. In fact, history is rife with examples of economic policies that looked promising on paper but failed to deliver real benefits for ordinary citizens. Success will hinge on political will, robust institutions, and unyielding public engagement. If these three conditions—transparent use of savings, an open and fair downstream market, and a reformed NNPCL—are not met, the policy will be seen as mere lip service.
Looking Ahead: Will President Tinubu Stay the Course?
Given the magnitude of challenges, skeptics may ask whether President Tinubu has the political capital and willingness to push through uncomfortable reforms and hold powerful interests in check. Yet these very obstacles underscore why the subsidy removal could indeed prove to be a defining move—if it triggers a chain reaction of accountability, market liberalization, and corporate governance reforms.
An Appeal to Public Vigilance:
- Civically engaged Nigerians must continue to demand transparency.
- Legislators and independent bodies must carry out thorough oversight.
- The press must bring to light failures or corruption at local, state, or federal levels.
Without sustained public scrutiny, the initial fanfare over “subsidy removal” may become just another headline in the annals of unfulfilled promises. With that scrutiny, however, there is a chance—just a chance—that Nigeria can pivot toward a more sustainable, equitable path in its oil and gas sector and beyond.
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A Defining or Diminishing Legacy?
President Tinubu’s pride in subsidy removal will be justified only if it translates into meaningful change. An “intelligent skeptic” might argue that Nigeria’s history of policy mismanagement offers plenty of reasons to doubt big promises. But an “optimistic pragmatist” can point out that those very doubts are why public pressure, transparent governance, and strong institutions are absolutely essential. If the three conditions outlined above are met, the subsidy removal might indeed become a landmark step for Nigeria’s future. If they are not, the country risks another cyclical disappointment, where short-term relief gives way to deeper dysfunction in the long run.
In the end, it will be up to Nigerians—journalists, civil society, local communities, and government agencies—to push this reform from rhetoric into reality, ensuring that the President’s claims and commitments do not evaporate in the heat of political expediency. In that collective endeavor, Nigeria’s leadership can prove its seriousness about charting a new course, one that truly safeguards the destiny of its youth and the prosperity of generations to come.