Moving Fuel-Subsidy Debate Beyond Idealogical Slogans – THISDAYLIVE

Iyobosa Uwugiaren argues that, amid the renewed debate over fuel subsidy recently ignited by candidate of the African Democratic Congress  in the January,  2027 presidential poll, Atiku Abubakar, Nigeria should be asking: What kind of subsidy provides the greatest protection to the poor at the lowest possible cost to taxpayers? In other words, Nigeria’s fuel-subsidy debate should move beyond ideological slogans.

The renewed debate over fuel subsidy has exposed one of the country’s most difficult economic policy questions: should the government allow petrol prices to be determined almost completely by market forces, or should it intervene to protect citizens from the full effects of international oil prices, exchange-rate volatility and domestic production costs?

Former Vice-President and African Democratic Congress (ADC) presidential candidate, Atiku Abubakar has answered that question in favour of intervention. He has recently reaffirmed that, if elected in 2027, he would restore a form of fuel subsidy, arguing that Nigeria is sufficiently endowed with oil resources to protect its citizens from excessive energy costs.

His proposal has, justifiably, generated controversy. Critics, especially government supporters, have argued that subsidy is fiscally expensive, encourages corruption, disproportionately benefits richer Nigerians who consume more petrol, and diverts public resources from infrastructure, healthcare and education.

These criticisms cannot simply be dismissed. To be sure, the previous subsidy regime was deeply compromised by allegations of fraud, opaque accounting and weak controls.

But there is another side to the argument. Many economists have argued that the failure of the previous subsidy regime does not necessarily prove that the idea of subsidising energy is inherently…