Entrepreneur, diplomat and philanthropist, Otunba Adejare Rewane Adegbenro, has defended President Bola Tinubu’s decision to remove the petrol subsidy in May 2023, arguing that the policy had benefited wealthy Nigerians and fuel-smuggling networks more than ordinary citizens.
Adegbenro, in a statement, described the former subsidy regime as a “rent-distribution system”, saying its benefits were largely captured by car-owning, urban and higher-income households, alongside smuggling networks.
According to him, the subsidy system channelled approximately N18 trillion over 12 years through a limited number of importers and marketers, while pricing and disbursement decisions were made with limited transparency within the Nigerian National Petroleum Corporation (NNPC) and the presidency.
He maintained that although the removal created a difficult transition for Nigerians, the reform had produced measurable economic gains.
Adegbenro pointed to increased monthly allocations from the Federation Account Allocation Committee (FAAC) to the federal, state and local governments as one of the major benefits of the policy.
He said the increased allocations had provided sub-national governments, including states controlled by opposition parties, with greater fiscal space than they previously had.
He also noted that the parallel exchange-rate premium, which he said had contributed to fuel smuggling and foreign-exchange racketeering, had narrowed following the reforms.
According to him, the NNPC has also started releasing some information on fuel-related expenditure, although he acknowledged that the disclosures remain incomplete.
Beyond the fiscal impact, Adegbenro argued that the subsidy removal had strengthened Nigeria’s credibility with investors and multilateral lenders.
He said the decision demonstrated the government’s willingness to undertake politically difficult reforms, potentially making it easier for private-sector investors to enter Nigeria’s deregulated downstream petroleum market.
Adegbenro was reacting to a pledge by former Vice President and Africa Democratic Congress (ADC) presidential candidate, Atiku Abubakar, to restore the petrol subsidy if elected president in 2027.
Atiku had cited the Tinubu administration’s failure to adequately account for the savings generated from the subsidy removal as part of the justification for his position.
Adegbenro acknowledged that concerns over accountability were legitimate but argued that they should not lead to a reversal of the policy.
He warned that restoring the subsidy could recreate the same lack of transparency and accountability that critics of the former system have complained about.
Instead, he called for an independent audit of the savings generated from the subsidy removal, as well as an examination of NNPC’s “Energy Security Expenses” before the National Assembly.
He also recommended targeted cash transfers to transport operators and low-income households as an alternative to the petrol subsidy.
Adegbenro further urged the government to sustain investment in domestic refining capacity and continue with market liberalisation, arguing that these measures would provide a more sustainable solution to Nigeria’s energy challenges.