In Nigeria, gasoline prices have become central to political debate a few months before the 2027 presidential election. President Bola Tinubu’s camp rejects the feasibility of opposition leader Atiku Abubakar’s plan to supply local refineries with crude oil below market prices. Both approaches address the same concern—reducing costs for consumers—but allocate risks differently among the state, businesses and households.
The controversy is unfolding in a market transformed since broad-based subsidies were removed in 2023. Nigeria has expanded domestic refining, particularly around Dangote, but national production alone does not guarantee low prices. Crude costs, processing, distribution, transport, margins and exchange rates continue to weigh on final prices.
Atiku’s proposal and its implicit cost
Atiku Abubakar proposes supporting local refineries by selling them crude below market prices. His team describes the mechanism as capped, budgeted and subject to audits. It also wants the crude-price benefit to translate into lower refined product prices in Nigeria.
The main parameters have not yet been detailed: discount per barrel, monthly volumes, duration, eligible refineries and verification methods. Below-market sales can represent a public cost even if they do not appear as a direct subsidy in budget expenditure. The public seller forgoes part of its potential revenue; the amount depends on volumes supplied and the gap between market and preferential prices.
The mechanism would also need to specify how the state ensures that consumers benefit from the discount. If products are resold at market prices or volume controls are weak, support may improve refiners’ margins without sufficiently reducing pump prices. Independent audits, publication of deliveries and a formula for passing on the benefit would be needed to assess effectiveness.
The government’s response relies on temporary measures
Bola Tinubu’s government advocates a different approach, centered on price reductions and a temporary waiver of certain NNPC Retail margins. On October 1, the national company’s retail arm announced a reduction of 66 naira per liter at its stations, initially for one week and then extended through October 31. The discount is available to customers who use the company’s app and pay digitally.
On October 8, the finance minister said NNPC Retail would waive its gasoline profit margin for 30 days to sell the product at its purchase cost. This margin reportedly represents less than 5% of the pump price. Public announcements do not fully clarify whether the waiver adds to the 66-naira reduction or overlaps with it. Consumers may therefore struggle to identify the total value and duration of support.
The government is also negotiating a cap of 1,350 naira per liter on supply costs at the refinery gate or import point. Refiners and importers could temporarily absorb costs above that level, then recover them if market conditions permit. This mechanism has yet to be finalized and does not constitute a guaranteed pump price. Its impact will depend on how eligible costs are calculated, compensation arrangements and the ability to prevent deferred amounts from becoming opaque debt.
Local refining changes dependence, but not every pricing factor
Expansion of domestic refining has changed the origin of available fuel. In August 2026, Nigeria reportedly received an average of 50.5 million liters of gasoline daily, including 35.9 million produced locally and 14.6 million imported. Dangote refinery accounted for nearly 71% of volumes received in the market, while the state-owned Port Harcourt, Warri and Kaduna refineries were not yet producing.
This reduces dependence on refined product imports, but also increases the importance of one large domestic producer in supply. Fuel availability and prices now depend more heavily on commercial terms among the refiner, national company, distributors and consumers. Maintaining effective competition, transparent wholesale prices and access to distribution infrastructure will therefore be important.
The argument for preferential crude pricing must be assessed in this context. Crude is only one input among others. If refining, financing, transport and distribution costs remain high, a lower crude price may have a limited effect. Conversely, temporary pump-price reductions can ease pressure on households without addressing structural causes if prices rise again when the measure ends.
A political and fiscal trade-off
Removing broad-based subsidies exposed domestic prices to international oil prices and naira fluctuations. The proposed measures therefore seek a balance between protecting consumers and preserving public finances. A broad subsidy can become costly and benefit consumers who do not need it; targeted support may better protect vulnerable households, but requires identification tools and credible implementation.
The measures also have different timeframes. NNPC Retail’s discount has an announced duration, the margin waiver covers 30 days and the cap mechanism remains under negotiation. Atiku’s plan forms part of a political program that has yet to specify costs or volumes. The comparison between the two strategies will be firmer once terms, beneficiaries and financial commitments are made public.
The debate would benefit from tracking three indicators: changes in average pump prices, the share of benefits actually passed on to consumers and the net cost to public finances or state-owned companies. Nigeria has made progress in local refining, but gasoline affordability remains an issue. The answer extends beyond crude prices: it will also depend on competition, margin transparency and the state’s ability to make temporary mechanisms predictable.