For nearly half a century, Nigeria lived under the spell of fuel subsidies. It was a peculiar kind of covenant: a state that could not provide stable electricity, efficient transport, or affordable housing, promised its citizens one thing: cheap petrol. It was inefficient, it was corrupt, and it drained public finances, but it became the closest thing Nigerians had to a social contract.
“If citizens are asked to sacrifice, then leaders must bleed first. Only then can reform be seen as a shared burden rather than a unilateral punishment.”
When President Bola Ahmed Tinubu announced the immediate removal of the subsidy on his inauguration day, he was hailed in some circles as courageous. After all, no Nigerian leader since 1973 had dared to confront the subsidy monster head-on. But courage is not the only lens through which history should judge that decision. Another, perhaps more honest, lens is fiscal desperation. By mid-2023, Nigeria was borrowing heavily just to pay salaries and service debt. The country had no money left to sustain subsidies. What looked like bold reform was, in reality, an inevitability forced by bankruptcy.
That distinction matters. If subsidy removal is celebrated as courage, we risk missing the harder question: what comes after the breaking of this covenant?
Since June 2023, the Federal Accounts Allocation Committee (FAAC) has recorded significantly higher disbursements to states, thanks to the savings from subsidy removal. Supporters of the policy point to these windfalls as proof of reform working. But history gives little reason for comfort. Nigeria has seen oil booms before, and most of the money was squandered. Governors expanded their convoys, built vanity projects, and abandoned them when oil prices crashed. To assume that higher FAAC allocations will automatically translate into improved welfare is a dangerous false assumption. Without accountability, transparency, and citizen pressure, the extra billions may vanish into the same black hole that swallowed past windfalls.
Critics also point to the manner and timing of the announcement. Tinubu’s declaration on inauguration day, without prior consultation or a safety net in place, turned reform into punishment. Overnight, transport fares doubled, food prices soared, and workers’ wages lost value. Labour unions staged protests, while millions of households slipped deeper into poverty. Reform is always painful, but good policy cushions the blow. In this case, the government removed the shield before building the safety net. The result was chaos, not confidence.
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For decades, defenders of subsidy argued that, however wasteful, it was one of the few policies that gave ordinary Nigerians a taste of state support. Petrol powers not only cars but also generators, grinding machines, and water pumps. In a country where over 40 percent live below the poverty line, cheap fuel functioned as an indirect welfare scheme. Removing it without a credible alternative was seen not as reform, but as betrayal. Critics insist that instead of abolishing subsidy outright, Nigeria could have tackled oil theft, expanded refining capacity, widened the tax net, and cut wasteful governance. But the government chose the quickest fix: pass the pain to the people.
If subsidy was the old covenant, what replaces it? This is the gap in Nigeria’s reform story. A serious government would use the billions saved to build a new social contract: affordable healthcare, reliable electricity, mass transit, targeted cash transfers, or even a food security programme. Instead, Nigerians are told to endure pain today for an uncertain tomorrow. The question at every dinner table is simple: how long must families wait before reform translates into relief?
Subsidy removal on its own is not reform; it is a gesture. True reform lies in what follows: investing in infrastructure, cleaning up the power sector, reducing the cost of governance, and restoring trust in public spending. Without these, subsidy removal will be remembered not as a turning point, but as a betrayal of national hopes.
Nigeria’s leaders love to claim that “the era of waste is over.” Yet convoys still choke Abuja streets, lawmakers still award themselves perks, and corruption still bleeds the treasury. If citizens are asked to sacrifice, then leaders must bleed first. Only then can reform be seen as a shared burden rather than a unilateral punishment.
In the end, the true measure of subsidy removal will not be FAAC figures, government press statements, or applause from international lenders. It will be judged at the dinner table. If families eat better, travel cheaper, and live with dignity, the policy will stand as a hard but necessary rebirth. If not, history will record it as just another Nigerian gesture: bold in announcement, empty in delivery.
Nigeria has broken the oil covenant. The urgent task now is to write a new one: one built not on cheap petrol, but on justice, accountability, and shared prosperity. Anything less will turn subsidy removal into the most expensive broken promise in the nation’s history.
