2 Years After the Fuel Subsidy: Who Wins and Who Loses?

In the 730 days since President Bola Tinubu cut Nigeria’s fuel subsidy, the Treasury has booked a ₦3.9 trillion windfall, but the price of a 12.5 kg cooking-gas cylinder has jumped more than 100 %, and petrol that once cost ₦190 now sells for as high as ₦905 per litre.

With the proclamation of ‘’Subsidy is gone’’ from the first day the President assumed office, Nigerians have been on the lookout for what would come out of it.

Why the Subsidy had to go according to the president

Before 2023, the government was spending 32 % of every naira it earned just to keep petrol cheap. The World Bank called it “more than the budgets for health, education and social protection combined” and warned that the bill was driving Nigeria toward a fiscal cliff.

Eliminating the subsidy, along with floating the naira two weeks later, was sold as a reset: plug leakages, close the FX arbitrage gap, and let market prices spur new refining capacity.

The clear-cut winners

The Federal Treasury net savings and higher crude royalties helped swing the balance-of-payments from a $3.3 bn deficit to a $6.83 bn surplus in 2024. Dangote’s 650,000 bpd plant is now the domestic price-setter, recently trimming pump prices in Lagos to ₦875 as imports remain costlier.

Unifying exchange rates and tighter CBN policy have begun to rebuild reserves ($40.2 bn at end-2024) and restore foreign-portfolio inflows. 

Some silent losers

• Households: Headline inflation peaked above 30 % before easing to 23.7 % in April 2025; food prices still bite the hardest.
  
• Wage Earners: With transport fares tripling, many workers now spend over half their income commuting to work.
  
• Small Businesses: High diesel and logistics costs squeeze already-thin margins, forcing some MSMEs to downsize or close shop.
  

Mixed grades for the economy

• External Accounts: The CBN credits the BOP turnaround to “disciplined monetary policy and greater investor confidence.
  
• Petrol Supply: Scarcity queues are now rare, aided by new mini-refineries in Edo, Delta and Abia.
  
• Exchange Rate: The naira briefly touched ₦2,000/$ before clawing back to the ₦1,300–1,400 band progress, but still painful for importers.

Practical way to Spread the Gains

1. Targeted Transport Relief – Fast-track CNG buses on Lagos–Abuja commuter routes to slash fares by up to 40 %.
   
2. Scale Up Cash Transfers – Digitise enrollment so the promised ₦500 bn palliative fund reaches the poorest 20 % before next school term.
   
3. Speed Up Refinery Fixes – Getting even one of NNPCL’s dormant plants running at 60 % capacity could shave another ₦50–₦70 off pump prices.
   
4. Transparent Savings Ledger – Publish a quarterly “subsidy-savings report” so citizens see exactly where the extra revenue goes. Transparency builds trust.
   

What to note

Two years on, ending the fuel subsidy has plugged a gaping fiscal hole and nudged Nigeria’s external accounts into the black. 

Yet the victory lap feels hollow on streets where transport, food and cooking-gas costs keep rising. 

Lasting success depends on converting Treasury gains into everyday relief quickly. Otherwise, the reform will be remembered less for what it saved and more for what it cost.