08/10/2026
FUEL DISCOUNT IS NOT FUEL SUBSIDY: LET’S GET THE ECONOMICS RIGHT
The Federal Government’s ₦15 petrol discount has absolutely nothing to do with the calls by Atiku and some other opposition presidential candidates for a return to fuel subsidy. It is a temporary palliative measure, similar to interventions being adopted by governments in other parts of the world to cushion citizens from the impact of volatile global energy prices.
Why are some people calling a palliative measure a return to fuel subsidy? It appears they either do not understand what fuel subsidy means—or are deliberately confusing the two for political reasons.
I personally do not believe the ₦15 discount announced by President Tinubu’s administration is a response to Atiku’s subsidy campaign. The timing and circumstances suggest something broader: governments around the world are responding to the pressure created by rising and volatile Brent crude prices, and Nigeria cannot afford to pretend that the global energy crisis does not exist.
Just three days ago, for instance, President Donald Trump permitted red-dyed diesel to be used on highways during the current period of pressure, while some diesel-related taxes were suspended until the end of the year.
In France, President Emmanuel Macron called for the release of 100 million barrels of crude from countries with sufficient reserves to increase market supply.
Spain has announced fuel-tax cuts and reduced VAT on fuel from 21% to 10%, while Germany has also moved to reduce energy-fuel taxes to ease the burden on consumers.
So, what should Nigeria do? Sit back and watch while countries with stronger economies and higher minimum wages are introducing measures to protect their citizens?
Of course not.
The ₦15 discount may not be enough, and Nigerians are justified in wanting greater relief. But the intervention nevertheless shows that the Nigerian government is responding to an extraordinary global energy situation rather than simply watching from the sidelines.
And yes, Atiku's call for a return to subsidy may give the Tinubu administration a political headache. But let us not rewrite history: a call made since August 19 cannot logically be presented as the reason for an intervention driven by today's global energy realities.
There is a fundamental difference between bringing back a permanent, costly fuel subsidy regime and introducing a temporary price-relief measure to cushion citizens during a period of global volatility.
Confusing the two may make for good political headlines, but it does not make good economics.
Fuel discount is not fuel subsidy. The distinction matters.
