Presidency defends subsidy removal, says Nigeria can’t return to old fuel regime

The Presidency has defended the removal of petrol subsidy, insisting that returning to the old regime would expose Nigeria to renewed financial challenges and undermine ongoing reforms in the petroleum sector.

The Special Adviser to the President on Information and Strategy, Bayo Onanuga, stated this on Thursday, August 20, 2026, while reacting to former Vice President Atiku Abubakar’s promise to restore petrol subsidy if elected president in the 2027 general election.

Onanuga said the subsidy system had become a major burden on public finances before it was discontinued in 2023, adding that it encouraged corruption, fuel import dependence and massive government spending.

Onanuga noted that the President Bola Tinubu administration’s decision to remove subsidy was aimed at redirecting resources towards critical sectors and strengthening the country’s economic foundation.

He said funds previously committed to subsidising petrol are now available to the three tiers of government, allowing states and local governments to improve infrastructure, pay salaries and implement development projects.

The presidential spokesman also highlighted the transformation of Nigeria’s petroleum sector, noting that the country has moved from relying heavily on imported refined products to increasing domestic production.

Onanuga said the coming on stream of the Dangote Refinery and other local refining projects has created new opportunities for energy security, foreign exchange savings, and industrial growth.

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He warned that restoring subsidy could reverse these gains by discouraging private investment in refining and pushing Nigeria back to dependence on imported petroleum products.

Onanuga challenged proponents of subsidy restoration to explain how the programme would be funded, asking whether it would require increased borrowing, reduced spending on public services or additional pressure on government revenue.

He stressed that while Nigerians continue to face challenges from rising energy costs, the solution should be sustainable policies that support local production and reduce costs rather than a return to a system that created long-term fiscal problems.

Onanuga, therefore, urged Nigerians to assess economic proposals based on their long-term impact, saying policies must be backed by clear funding plans and reflect the realities of the country’s current petroleum market.