UTE-ERUMU, Nigeria — In a policy commentary released from Ute-Erumu, political analyst Dr. Festus Goziem Okubor has mounted a defense of President Bola Ahmed Tinubu’s decision to eliminate Nigeria’s petroleum subsidy, characterizing the May 29, 2023 announcement as a decisive measure that ended decades of fiscal depletion and structural corruption.
According to Okubor, the petroleum subsidy regime had become economically unsustainable, costing the nation ₦4 trillion in 2022 and projected to exceed ₦6 trillion in 2023—a sum larger than the individual federal budgets of several neighboring West African nations. Okubor argued that previous attempts to dismantle the subsidy under former presidents Olusegun Obasanjo and Goodluck Jonathan were repeatedly rolled back or diluted due to political resistance and social unrest. He highlighted the contrast between past policies and President Tinubu’s unscripted “subsidy is gone” declaration on Inauguration Day, noting that it bypassed prolonged committee consultations to immediately halt government-funded fuel under-recovery deductions.
While acknowledging the immediate inflation and household price shocks triggered by deregulation, Okubor emphasized the positive macroeconomic shifts that followed. Monthly allocations from the Federation Account Allocation Committee (FAAC) to states and local government areas routinely surpassed pre-2023 levels by 40% to 60%, providing regional governments with increased fiscal liquidity. Additionally, the removal of price controls prevented severe fuel supply shortages during recent global oil market volatility caused by geopolitical conflicts in the Middle East. Okubor also credited the administration’s market-driven policy with creating the economic conditions necessary for large-scale domestic refining projects, such as the 650,000-barrel-per-day Dangote Refinery, to operate commercially without state price distortions.
Looking toward the broader economic trajectory, Okubor described the dismantling of the subsidy as an essential structural overhaul necessary to break Nigeria’s resource curse. He asserted that while short-term economic adjustments remain painful for citizens, the removal of the subsidy dismantled entrenched rent-seeking networks and established a foundation for long-term domestic energy independence.
