SUBSIDY REMOVAL: A BONANZA FOR GOVERNORS, BURDEN FOR NIGERIANS – By Terver Akase
For the first time since oil was discovered in Nigeria in 1956, the Federal Government removed subsidy from fuel on May 29, 2023.
What really is fuel subsidy and what does its removal mean?
Fuel subsidy removal means the government has stopped paying part of the cost of fuel, allowing petrol prices to reflect their true market value.
Previously, the government used public funds to keep fuel prices artificially low by covering the gap between the actual cost and the pump price. Now that the subsidy is removed, fuel prices have risen because consumers (you and I) are bearing the full cost, influenced by global oil prices, exchange rates, and distribution expenses.
Fuel subsidy removal has shifted the financial burden from government to the people, while it has made resources abundantly available to the governments at all levels.
On May 29, 2023, as President Bola Ahmed Tinubu stood before the nation and declared that fuel subsidy was gone, many Nigerians did not need economic theories to understand what was coming. For the trader who relies on public transport, the farmer who moves produce to the market, the civil servant who already stretches a thin salary, and the student who counts every naira, that single announcement would soon reshape daily existence.
The days that followed confirmed those fears. Transport fares doubled and, in some places, tripled. Food prices rose almost immediately, as did the cost of household items, school fees, and rent. Every journey, every meal, every basic decision began to cost more. Families adjusted by skipping meals, postponing medical care, withdrawing children from private schools, and abandoning small comforts that once made life bearable. Subsidy removal was no longer an abstract policy; it was now real!
Yet, while ordinary Nigerians were learning new ways to survive, state governors were learning new ways to spend, live large and in affluence. The same policy that drained the pockets of the masses began to fill the coffers of the states.
Each month, governors now receive significantly higher allocations from the Federation Account amounting to about 800% from what the states were receiving before May 29, 2023. For example, a state which was receiving an average of N4.5 billion monthly allocation now receives well above N40 billion. This is not hidden knowledge. Imo State Governor Hope Uzodimma openly described subsidy removal as “a direct blessing” to sub-national governments, acknowledging that more money now flows to the states as a result of the policy.
There is nothing inherently wrong with states receiving more funds. In fact, that was part of the promise: that money saved from subsidy would be redirected to development, closer to the people. But for millions of Nigerians, that promise remains painfully unfulfilled. From Abuja to the states, there is little evidence that the extra revenue has translated into cheaper transport, better hospitals, improved schools, or effective support for small businesses battered by inflation.
Instead, many governors have chosen a forlorn path. Large sums are poured into flashy “legacy projects” that carry their names and political fingerprints; projects that look impressive from a distance but barely touch the lives of ordinary people. Meanwhile, critical sectors such as primary healthcare, public education, agriculture, and social welfare continue to suffer neglect. The priorities appear less about easing human suffering and more about cementing political image and personal gain for the governors.
The disconnect has grown so obvious that President Tinubu himself felt compelled to urge governors to “wet the grass” to ensure that the benefits of increased revenue are felt at the grassroots. That appeal, coming from the same president who removed subsidy, speaks volumes. It is an admission that the pain has been real, widespread, and inadequately addressed by those now holding the resources meant to soften the blow.
What Nigerians are witnessing is not shared sacrifice, but uneven reward. Subsidy removal has produced a cruel imbalance: governors are financially better off, while the people they govern are materially worse off. The policy has effectively transferred economic pain from government balance sheets to household kitchens, while the financial relief has stopped at the doors of state government houses.
For the market woman who pays more to bring goods to her stall, the commuter who spends half of daily earnings on transport, and the family choosing between food and medicine, subsidy removal feels less like reform and more like abandonment. It raises a disturbing question: how can a policy be judged successful when it enriches those in power but deepens the suffering of the governed?
Until state governors can show, in clear and tangible ways, that the money gained from subsidy removal is being used to reduce hardship and restore dignity to everyday life, the policy will remain deeply unpopular.
While I commend President Tinubu for the courage to break the chaìns of corrùption that held the country’s energy sector through subsidy payments, I appeal to Mr President to find a way to ensure that the resources improve the living conditions of ordinary Nigerians instead of serving as inyaregh ki u gomna (personal funds of state governors).
****Terver Akase is a Nigerian journalist, political analyst, and former media aide to Benue State Governor Samuel Ortom.
He served as Chief Press Secretary and Special Adviser on Media and Publicity.
