When on May 29, 2023, President Bola Tinubu announced the termination of Fuel Subsidy, there was no doubt in the minds of Nigerians about the implication of that decision. Given the years of intellectual and secular debates over the issue, President Tinubu’s announcement was even seen by many as a bold step towards economic reforms. Therefore, the sudden rise of petrol prices from the old subsidized price of about ₦185 per litre to higher prices, did not come as a total surprise. Neither were other rises like in transport fares, cost of food distribution and cost to fuel-dependent businesses to generate electricity, among others.
For millions of households, the reform became synonymous with a sharp increase in the cost of living, because all the cost of that decision was passed onto them. However, juxtaposed against the argument from government that Nigeria could no longer afford to spend enormous sums subsidizing petrol consumption and the assurance that the money realized from that decision would be better deployed to infrastructure, education, healthcare, security, social protection and other productive purposes, the people were ready to bear what they believed would be a short-term burden.
More than three years later, however, Nigerians are yet to feel the expected impact. This prompts the simple but profound question: Have Nigerians received sufficient value for the pain? A report published by The PUNCH on Friday, September 4, 2026, provides a sobering backdrop to that question. Nigerians spent approximately ₦11.3 trillion on petrol between January and July 2026, according to an analysis of data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). During those seven months, approximately 10.37 billion litres of petrol entered the domestic market. Simply put, Nigerians spent this enormous sum while actually consuming considerably less petrol.
According to the NMDPRA figures cited by The PUNCH, petrol consumption declined during the period, with July recording the lowest monthly volume at about 1.11 billion litres. Yet Nigerians still spent approximately ₦1.33 trillion that month. Paradoxically, petrol averaged about ₦830 per litre in January and February before rising to ₦1,100 in March, ₦1,250 in April and ₦1,300 in May. It subsequently moderated to around ₦1,200 in June and July. This can only mean that Nigerians are buying less petrol but spending vastly more money to do so. The more important question in the ongoing subsidy debate, therefore, is not whether subsidy itself was good or bad economics, but what has happened to the enormous resources liberated by its removal.
According to the Federal Government’s reform scorecard, the removal of petrol subsidy mobilized ₦15.8 trillion in resources for the Federation between June 2023 and December 2025. It says approximately ₦5.4 trillion accrued to the Federal Government, while ₦10.4 trillion was shared among states and local governments through the Federation Account. In economic terms, this ₦15.8 trillion represents resources that government says became available because it stopped financing the petrol subsidy. So, it would be misleading to suggest that Nigerians paid ₦11.3 trillion for petrol in 2026 while government simply pocketed ₦15.8 trillion in subsidy savings. Nevertheless, together they illuminate the central dilemma, which is: Nigerians made a sacrifice. Government gained fiscal space. What did Nigerians receive in return?
Undoubtedly. there was a compelling economic case for ending the subsidy. For years, Nigeria spent enormous sums keeping petrol prices artificially low while simultaneously struggling to fund basic public services. The subsidy also encouraged excessive consumption, created opportunities for arbitrage and smuggling, and placed considerable pressure on government finances. Information and National Orientation Minister, Mohammed Idris, recently put this in perspective when he posed the question whether Nigeria should restore subsidy or maintain higher allocations to states and local governments, continue funding roads, rail and power, sustain student loans and consumer credit, and strengthen healthcare, education and social protection.
But that moves the question from how much has been saved through subsidy removal to what Nigeria has done with the fiscal space created by that removal. And, perhaps, more importantly: Can the average Nigerian see and feel the benefit? To answer this question fairly, it is necessary to assess the sacrifices Nigerians have to make, what government gained and finally, what Nigerians got back. First, Nigerians lost access to artificially cheap petrol; which translated into higher transport fares and increased logistics costs, high cost of production for businesses, especially those dependent on petrol-powered generators, and higher expenditure on transportation and other goods and services for households. The government, on its side, says subsidy removal mobilized ₦15.8 trillion between June 2023 and December 2025, with the Federal Government receiving ₦5.4 trillion and states and local governments receiving ₦10.4 trillion.
The third, and perhaps, most important is what Nigerians got back. Government points to increased allocations to subnational governments, infrastructure spending, wage adjustments, social programmes, student financing, power and other interventions. These are legitimate benefits. But they need to be measured against the scale of the sacrifice. A road project, new railway, a higher minimum wage, Student loans, Improved security and electricity are all valuable, agreed. But Nigerians need to know how much of the subsidy savings has been converted into these benefits, where are they located, how many people have benefited, and what has been the measurable improvement in their lives? That is the accountability test.
One of the weaknesses of the subsidy debate is that it is often conducted in the language of government accounts rather than household economics. From the perspective of a government accountant, eliminating a multitrillion-naira subsidy may be an undeniable fiscal achievement. But from the perspective of a commercial driver, what matters is the price of petrol, the cost of maintaining his vehicle and what passengers can afford to pay. And for the farmer, it is the cost of moving produce to market, for the manufacturer, the cost of powering machinery, for the civil servant, the cost of getting to work, and for the family, it is whether monthly income can afford food, transport, rent, school fees and electricity.
This is why the ₦11.3 trillion petrol expenditure figure is so significant. It brings the subsidy debate down from the abstract world of fiscal policy to the concrete reality of household expenditure. Truth is that while lower consumption could indicate greater efficiency, less waste, increased use of alternative fuels and changing consumer behaviour, it could also mean that some people are unable to afford as much petrol as they used to buy. When petrol prices rise dramatically, a household may reduce journeys, commercial operators may make fewer trips and small business may reduce operating hours while a family may use a generator less frequently, not because electricity has improved, but because petrol has become too expensive.
Consequently, falling petrol consumption should not automatically be celebrated as evidence of reform success. The government must distinguish between efficiency-driven reduction in demand and hardship-driven reduction in demand. Government must also demonstrate that the sacrifice was not simply a transfer of economic burden from the public purse to the pockets of ordinary Nigerians.
If Nigerians surrendered cheap petrol in exchange for fiscal stability, then fiscal stability must eventually produce better infrastructure, cheaper and more reliable energy, stronger public transportation, improved healthcare and education, more productive businesses and greater household purchasing power. Otherwise, the reform risks being remembered not as the beginning of a more efficient Nigerian economy, but as an exercise in moving the burden of subsidy removal from the government’s books to the citizen’s wallet.
