Amid a sharp rise in petrol prices and worsening economic pressure on Nigerians, stakeholders remain divided over whether the administration of Bola Ahmed Tinubu should introduce palliatives or reconsider fuel subsidies to ease the burden.
The latest spike in global oil prices—triggered by a 24-day conflict involving Iran, the United States, and Israel—has pushed crude oil above $100 per barrel, far exceeding Nigeria’s 2026 budget benchmark of $64. While this development has boosted national oil revenues, it has simultaneously intensified domestic economic strain.
Petrol prices have surged by approximately N492, representing a 56 percent increase, with pump prices now ranging between N1,367 and N1,390 per litre as of March 23, 2026, up from N875 before February 28. The ripple effects have been immediate, driving up transportation and food costs and significantly eroding the purchasing power of citizens—particularly those earning the N70,000 minimum wage.
Calls for government intervention have grown louder. The Centre for the Promotion of Private Enterprises (CPPE) has urged authorities to implement a coordinated policy response to curb energy-driven inflation. Its Chief Executive Officer, Muda Yusuf, warned that the ongoing Middle East crisis could reverse Nigeria’s disinflation trend, which stood at 15.06 percent in February.
Similarly, the President of the Nigeria Labour Congress, Joe Ajaero, called on the government to act proactively.
“The government is making huge revenues from the crisis… it should use part of these funds to cushion the impact on citizens,” he said, cautioning against waiting for industrial unrest before taking action.
At the state level, Oyo State has approved a N10,000 wage allowance for civil servants as a temporary relief measure.
However, opinions remain sharply divided among experts. A professor emeritus of petroleum economics, Wumi Iledare, dismissed calls for reinstating fuel subsidies, describing them as economically flawed and unsustainable.
“Consumer fuel subsidies tend to create market inefficiencies and significant welfare losses,” he stated, noting that past subsidy regimes diverted resources from critical sectors such as healthcare, education, and infrastructure.
Instead, Iledare advocated for targeted social interventions, improved governance in the energy sector, and strategic use of increased oil revenues. He also proposed measures such as crude oil discounts for local refineries, including the Dangote Refinery, and the removal of import duties or VAT on petroleum products to reduce costs.
In contrast, civil society voices have pushed for more immediate relief. Auwal Rafsanjani, Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), criticized the government’s response as lacking compassion and urgency.
“Nigerian leaders need to have a package for relief to mitigate the suffering of Nigerians in all ramifications,” he said, warning that the absence of pro-poor policies could worsen the crisis.
Rafsanjani further argued that the gains from subsidy removal have yet to translate into tangible relief for citizens, pointing to a growing disconnect between political leadership and the realities faced by ordinary Nigerians.
As economic pressures mount, the debate over the best path forward—whether through subsidies, targeted interventions, or broader reforms—continues to highlight the complexity of balancing fiscal sustainability with social welfare.
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