A professor at Obafemi Awolowo University, Tunji Ogunyemi, has warned that restoring petrol subsidy could leave about 15 states in northern Nigeria unable to fund their operations within three months.

He made the remarks while reacting to a proposal by African Democratic Congress presidential candidate Atiku Abubakar to bring back the subsidy if elected in 2027.

Ogunyemi argued that returning the subsidy would shrink the money available for distribution through the Federation Account. Most states depend heavily on this account to run their governments, and only a few, such as Lagos, Delta and Rivers, can manage with less federal support.

He said a drop in revenue would make it hard for many state governments to pay workers’ salaries and pensions. The Federal Government would also struggle to fund both its day-to-day spending and capital projects if its share of revenue declines.

The professor further cautioned that lower revenues could affect Nigeria’s ability to service its debts, which could damage the country’s financial standing and creditworthiness. He described a return to the old subsidy system as potentially disastrous for the economy.

Atiku had earlier pledged to restore the subsidy, saying Nigerians had not seen enough benefits from its removal. He later clarified that his plan was not a full return to the previous import-subsidy arrangement but a targeted support for domestic refining. The subsidy was removed by President Bola Tinubu in May 2023.

Photo credit: Punch Newspaper