Subsidy, that toxic girlfriend that must never come back even at $200 dollar oil

There is a category of ex you don’t just break up with, you block, delete, mute, and spiritually excommunicate from your life.

No follow requests accepted, no 2am calls entertained, no “I’ve changed” speeches tolerated.

Nigeria and fuel subsidy need that kind of separation.

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Permanent. Irreversible. Non-negotiable. And the conversation we had on Drinks and Mics this week, along with the comments that kept rolling in afterwards, made clear that not everyone has arrived at this conclusion yet. So let’s settle it.

The Corruption Isn’t Up There, It Starts Right Here

We love to point fingers at Abuja whenever the subsidy conversation comes up, and honestly, Abuja deserves many of those fingers. But let me tell you something that stuck with me from a recent conversation.

A friend of mine recently switched his company’s fleet to BYD electric vehicles. We were standing outside admiring the cars when he mentioned, almost in passing, that his fleet team had been refilling pool vehicles at ₦95,000 per tank. The problem?

A full tank for those vehicles shouldn’t cost more than ₦60,000. That’s ₦35,000 being quietly pocketed on every single fill, across a fleet of over 100 vehicles, for years. Nobody held a press conference about it. Nobody was indicted. It was just business as usual.

The BYD, by the way, gives close to 600km on a full charge, Lagos to Ibadan, three times over, and charges in 2 to 3 hours. The theft stopped the day the pump was replaced by a plug.

That story isn’t about government. It’s about us. Subsidy in Nigeria doesn’t just enable corruption at the top, it franchises it downward, all the way into your office car park, your domestic staff, your supply chain.

It creates a national architecture of incentivized dishonesty, where the gap between the subsidised price and the market price becomes everybody’s personal business opportunity. The man signing the NNPC contracts and the driver submitting inflated fuel receipts are operating from the same playbook. The scale differs; the instinct doesn’t.

The “Oil Producing Country” Argument Doesn’t Hold Water

Every time petrol prices rise, someone shows up in the comments with the phrase: “We are an oil producing country, cheap fuel is our right.”

It’s an emotionally satisfying argument. It is also economically illiterate.

Here is the cost reality. Saudi Arabia’s average cost to produce a barrel of oil is among the lowest in the world, typically under $10.

The UAE’s breakeven sits just above $20. Nigeria’s after-tax breakeven for producing fields is probably $30+ per barrel.  And that’s before you layer in the cost of crude theft, pipeline vandalism, years of underinvestment, and a creaking infrastructure that haemorrhages oil before it ever reaches a refinery.

So when oil is trading at $75 a barrel, Saudi Arabia is pocketing the better part of $65 on each barrel. They can sell crude to their domestic refineries at $25, subsidise pump prices, and still run a surplus.

They are not subsidising fuel, they are discounting their profit margin. That is a fundamentally different thing.

Nigeria doesn’t have that luxury. At $30+ to get the oil out of the ground, and that’s on a good day when the pipeline isn’t vandalised, and someone isn’t stealing barrels at the wellhead, the margin for generosity is thin to non-existent. Needless to say, the government is also broke. Giving away cheap petrol in this environment isn’t a social policy. It’s a fiscal suicide note.

And if the response is “but let’s give Dangote cheaper feedstock so he passes savings to consumers”, that Pandora’s box should stay sealed. Give someone a $10 discount per barrel in Nigeria and I guarantee you, $10 will appear somewhere as a kickback before the crude hits the refinery gate.

We lack the institutional infrastructure to manage a sensitive subsidy mechanism without it becoming a feeding trough. That is not cynicism, it is pattern recognition.

Look Around the Neighbourhood

Let’s take a walk across the West African corridor, because the regional data makes the argument more powerfully than any op-ed can.

Nigeria currently has the lowest petrol price in West Africa, at around $0.55 per litre (approximately ₦870), even after the subsidy removal in 2023.  Now compare that to the neighbours. Ghana sells a litre at the naira equivalent of ₦1,611.

Benin Republic charges around ₦1,817. Togo is at ₦1,778. Ivory Coast sits at ₦2,172. Senegal is at ₦2,589, and Mali at ₦2,235.  Guinea tops the West African chart at ₦2,170, closely followed by Burkina Faso at ₦2,223 and Sierra Leone at ₦2,172.

Let that marinate. Nigerians, who by any macro measure represent the most prosperous economy in West Africa, are still paying the least for fuel in the entire region, subsidy or no subsidy. The workers from Cotonou who used to cross the border into Nigeria for better wages and then repatriate home? They are paying nearly double per litre back home.

The naira’s sharp devaluation in recent years made some of them reconsider that migration, which says everything about how currency stability matters more to ordinary people’s welfare than a discounted petrol price. Dangote himself confirmed that Nigerians pay 55% less for petrol than in other African countries  and that’s in the post-subsidy era.

The people complaining about ₦1,000 per litre in Nigeria should be having a conversation with their counterparts in Accra or Dakar, not the other way around.

The Damage Was Always Greater Than the Benefit

For decades, the subsidy didn’t help the poor, it helped the middle class and the well-connected, who owned the cars, and had the capital to profit from arbitrage. The man selling iced water in traffic didn’t benefit much from cheap petrol.

If we were able to fix electricity in this country, the argument for subsidies would die away fast. As for logistics, they use diesel, so what concerns you concern petrol and diesel are fully deregulated. Even kerosene, which means more to the man on the street is not subsidized.

The monies that disappeared into the subsidy regime, the NNPC under-remittances, the phantom volumes, the multiple-billing, the imported fuel that may or may not have existed, was money that could have been hospitals, roads, and schools. It is never coming back. The subsidy didn’t transfer wealth to the poor. It transferred it upward and outward, and dressed the whole transaction in the language of social justice.

Nigeria failed its people for a long time. Our leaders collected the oil money and returned very little of it in the form of functioning public infrastructure. That is a legitimate grievance. But the answer to that failure is not to reintroduce the same corrupt instrument that enabled it. You don’t cure a hangover by drinking more.

If subsidy ever pokes its head back up, regardless of who is in power, regardless of what oil is trading at, regardless of how compelling the populist argument sounds in an election year, the answer must be no. Not “let’s study it.” Not “well, in this specific case.” A clean, permanent, unconditional no.

Block the number. Delete the contact. Restrict her on every platform. She is not coming back to help you. She never was

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