The renewed campaign by former Vice President and African Democratic Congress (ADC) presidential candidate, Atiku Abubakar, to reintroduce a form of petrol subsidy ahead of the 2027 presidential election is gaining attention across parts of Northern Nigeria, with the proposal already generating strong debate among politicians, economists and financial experts.
Atiku, who initially did not oppose the removal of petrol subsidy by the Bola Tinubu administration, recently changed his position, arguing that the policy has increased the cost of living and pushed more Nigerians into hardship.
The ADC presidential candidate has questioned what has happened to the resources generated since the subsidy was removed, arguing that Nigerians have not seen sufficient benefits from the savings. He has maintained that, if elected in 2027, he would restore subsidy and ensure that Nigerians receive relief from high energy and transportation costs.
However, Atiku’s position has also generated criticism from supporters of the current administration and some economic commentators, who argue that returning to the subsidy regime could place a fresh burden on government finances.
The debate has become particularly important because the removal of petrol subsidy in May 2023 significantly increased funds available to the three tiers of government through the Federation Account. The Federal Government says the subsidy removal, together with other reforms, generated about ₦15.8 trillion for the Federation between June 2023 and December 2025, with approximately ₦10.4 trillion shared among state and local governments.
The increased allocations have provided states with greater fiscal space to meet their financial obligations. The Federal Ministry of Finance said states received about ₦9.17 trillion in additional allocations between June 2023 and December 2025, compared with what they would have received under the pre-subsidy-removal monthly allocation pattern.
In one recent example, Nasarawa State Governor Abdullahi Sule said the state’s monthly Federation Account allocation rose from about ₦4.5 billion to approximately ₦16 billion following the reforms. He said the increased revenue had enabled the state to undertake more development projects and respond to its obligations.
This has therefore raised a fundamental question for Atiku’s proposed policy: how would an incoming administration finance the subsidy while maintaining the increased revenue available to states and local governments for salaries, pensions, infrastructure and other responsibilities?
Atiku has subsequently sought to clarify his position, saying his proposed intervention would not simply revive the old subsidy arrangement. His camp says the plan would involve a targeted, capped and transparently budgeted intervention aimed at reducing energy costs, supporting domestic production and encouraging local refining.
The former vice president has also argued that the strength of an economy should not be judged only by government revenue, but by the purchasing power and welfare of citizens. He maintains that rising petrol prices have contributed to higher transportation and food costs, thereby placing additional pressure on households and businesses.
The Tinubu administration, however, has continued to defend the subsidy removal, arguing that the policy was necessary to prevent fiscal collapse and free resources for development. President Tinubu recently described calls for a reversal as evidence of a misunderstanding of the economy, while the Federal Government has highlighted the increased allocations to states and local governments as one of the consequences of the reform.
Beyond the political argument, the emerging subsidy debate is therefore likely to become one of the major economic issues of the 2027 presidential election. While Atiku’s proposal appeals to Nigerians struggling with the high cost of fuel, food and transportation, the critical issue for voters and economic experts may ultimately be how the proposed subsidy would be funded, controlled and sustained without reversing the fiscal gains recorded by the states and the Federal Government since 2023.
