The National Chairman of the All Progressives Congress (APC), Nentawe Yilwatda, has warned that a return to petrol subsidy could revive fuel queues and weaken governments’ ability to sustain the payment of the current minimum wage.
Mr Yilwatda spoke in Abuja while receiving a delegation of economic stakeholders who visited him to discuss Nigeria’s economic situation, ongoing reforms and prospects for sustainable growth.
His comments followed a proposal by former Vice-President Atiku Abubakar, the presidential candidate of the African Democratic Congress (ADC), to restore petrol subsidy if elected president in 2027.
Atiku has also criticised the Federal Government over its handling of savings from the removal of the subsidy, arguing that the funds should have been deployed towards poverty reduction and development.
President Bola Tinubu announced the removal of the petrol subsidy in his inaugural address on 29 May 2023. The decision led to a sharp rise in petrol prices and contributed to increases in transport fares and living costs.
Mr Yilwatda urged Nigerians to look beyond the prospect of cheaper petrol and consider the effect of subsidy payments on government revenue and expenditure.
“Subsidy may appear attractive because it promises cheaper petrol, but Nigerians must also ask the bigger question: who pays for the subsidy and what happens to the resources that government must divert to finance it?” he said.
He argued that the success or failure of the policy should not be assessed solely by its immediate effect on pump prices.
“A policy cannot be judged only by its immediate benefit at the pump. We must examine its impact on government revenues, salaries, pensions, education, healthcare, infrastructure and the overall capacity of government to meet its obligations to citizens,” he said.
The APC chairman said the removal of the subsidy had resulted in higher federal allocations to state governments, improving the finances of several states.
According to him, some states had previously struggled to meet their salary and pension obligations, with some resorting to partial payments.
He maintained that any proposal to reintroduce the subsidy should undergo detailed economic assessment to prevent Nigeria from returning to the fiscal pressures associated with the previous system.
Mr Yilwatda also connected the subsidy debate to the payment of the new minimum wage, arguing that governments need stronger and more sustainable revenues to meet higher wage bills while continuing to fund other responsibilities.
“The challenge is not merely to announce higher wages but to create an economic environment in which governments can consistently pay them without sacrificing investment in infrastructure, education, healthcare and other essential services,” he said.
He further warned that restoring subsidy could affect funding for education.
Mr Yilwatda recalled the prolonged disruption of academic activities in Nigerian universities under the previous administration and urged Nigerians to consider the wider consequences of policies that could constrain public finances.
“A return to a fiscally unsustainable subsidy regime could have consequences far beyond the price of petrol. When government revenue is squeezed, the first victims are often the critical sectors that directly affect the welfare and future of our people,” he said.
