{"id":3916,"date":"2026-09-05T22:28:43","date_gmt":"2026-09-05T22:28:43","guid":{"rendered":"https:\/\/consumerconnectng.com\/?p=3916"},"modified":"2026-09-06T00:42:15","modified_gmt":"2026-09-06T00:42:15","slug":"nigeria-reversing-oil-subsidy-regime-calamitous-15-states-in-north-will-collapse-within-3-months-don","status":"publish","type":"post","link":"https:\/\/consumerconnectng.com\/?p=3916","title":{"rendered":"Nigeria: Reversing oil subsidy regime \u2018calamitous&#8217;, 15 States in North will collapse within 3 months &#8211;Expert"},"content":{"rendered":"<p><strong><em>*Adet<strong>unji<\/strong> Ojo Ogunyemi, an economic historian, lawyer, public affairs analyst and Professor at Obafemi Awolowo University, Ile-Ife, Nigeria, warns against restoring petrol subsidy, stating besides Federal Government&#8217;s inability to support its &#8216;minimum expenditures&#8217;, about 15 States in Northern Nigeria &#8216;will collapse within three months&#8217;<\/em><\/strong><\/p>\n<p>Isola Moses | ConsumerConnect<\/p>\n<p>Arguments and counter arguments over the propriety, or otherwise of returning the West African country to the controversial fuel subsidy regime have continued to dominate public discourse in recent times.<\/p>\n<p>Speaking on the burning issue, Adetunji Ojo Ogunyemi, an economic historian, lawyer, public affairs analyst and Professor at Obafemi Awolowo University (OAU), Ile-Ife, Nigeria, has warned that restoring petrol subsidy could leave about 15 States in Northern Nigeria unable to sustain their operations within three months.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"pxSDvs1y4d\"><p><a href=\"https:\/\/consumerconnectng.com\/?p=3924\">INEC, JAMB collaborate on biometric verification tech, strengthen partnership<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"\u201cINEC, JAMB collaborate on biometric verification tech, strengthen partnership\u201d \u2014 Consumer Experience Is A Top Priority\" src=\"https:\/\/consumerconnectng.com\/?p=3924&amp;embed=true#?secret=Bz7LY6LJVf#?secret=pxSDvs1y4d\" data-secret=\"pxSDvs1y4d\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>Prof. Ogunyemi gave the warning during an interview on Open Forum 360 aired Friday, September 4, 2026, via a podcast hosted by Dare Adekanmbi, and monitored in Lagos.<\/p>\n<p>The don said this in a direct reaction to a recent proposal by former Vice-President (Alhaji) Atiku Abubakar and Presidential Candidate of the African Democratic Congress, to restore petrol subsidy, if elected President come January 2027.<\/p>\n<p>The professor, however, reportedly, argued that returning the oil subsidy would reduce the funds available for distribution through the Federation Account.<\/p>\n<p>President Bola Ahmed Tinubu, GCFR, in his inaugural address, May 29, 2023, had declared that \u201cfuel subsidy is gone.\u201d<\/p>\n<p>The policy decision, shortly after, triggered a sharp increase in petrol prices, and contributed to higher transportation, other services, and living costs for consumers.<\/p>\n<p><strong>Returning oil subsidy regime &#8216;is calamitous&#8217; for economy <\/strong><\/p>\n<p>The professor affirmed that most States in the Nigerian Federation currently, rely on savings from subsidy to finance government operations.<\/p>\n<p>Ogunyemi averred: \u201cI think it is calamitous, to say the least, if we reverse the subsidy regime in Nigeria in favour of returning the subsidies.&#8221;<\/p>\n<p>The consequences, he stated, would extend beyond the states, listing reduced Federation Account revenue as one of four major problems that would arise from a return to the subsidy regime.<\/p>\n<p>The OAUniversity don further said: \u201cThe Federation Account is the jugular of more than 30 states in the Federation. &#8221; &#8220;Only about four states in Nigeria can survive without the Federation Account.&#8221;<\/p>\n<p>Ogunyemi listed these to include Lagos, Delta and Rivers as states that could cope without depending heavily on Federal allocations.<\/p>\n<p>He, however, cited Taraba as an example of a state whose finances are significantly dependent on the Federation Account till this day.<\/p>\n<p>The University don explained: \u201cSo, if you now say reduce the accrual from the account, I tell you more than about 15 states in the North will collapse.<\/p>\n<p>&#8220;They will collapse within three months.&#8221;<\/p>\n<p>According to him, a revenue squeeze from the Federation Account will make it difficult for several state governments to meet their obligations to workers and pensioners.<\/p>\n<p>Ogunyemi noted: \u201cThe second is that states will return to a regime of incapacity to pay salaries, let alone pensions.\u201d<\/p>\n<p>He equally cautioned that the Federal Government of Nigeria would face difficulties funding its recurrent and capital expenditure, if its revenue share declines.<\/p>\n<p>The professor further explained that between 60 and 70 percent of the Federal Government\u2019s expenditure goes to recurrent spending.<\/p>\n<p>He described the development as \u201cconsumption expenditure\u201d.<\/p>\n<p>He again, explained: \u201cThat is consumption expenditure.<\/p>\n<p>&#8220;You reduce the revenue in that respect, you will see a situation in which government will not be able to support its minimum expenditure, let alone go for capital expenditure.&#8221;<\/p>\n<p>Besides, he warned that declining revenues could affect Nigeria&#8217;s ability to service its debts.<\/p>\n<p>Ogunyemi opined that failure to meet those obligations could damage the country&#8217;s financial standing and creditworthiness in the international system.<\/p>\n<p><strong>Atiku&#8217;s proposal, a ploy to gain political support, says Ogunyemi <\/strong><\/p>\n<p>Aside from far-reaching consequences of retiring the fuel subsidy regime, Prof. Ogunyemi also questioned Atiku\u2019s proposal, hinting that the former Nigerian Vice-President and Presidential Candidate in the 2027 Election could be using the subsidy promise to gain political support from Nigerians.<\/p>\n<p>He, nonetheless, contended that as having served as the Vice-President, Alhaji Atiku should be more explicit about the possible consequences of restoring the subsidy in the economy.<\/p>\n<p>It is recalled that Atiku had initially pledged to restore the subsidy, arguing that Nigerian consumers had not seen sufficient benefits from its removal.<\/p>\n<p>He also queried how the funds saved from the policy had been used thus far.<\/p>\n<p>However, days after the purported pronouncement, Atiku later clarified that his proposal was not a return to the former import-subsidy arrangement.<\/p>\n<p>Atiku rather said he preferred a &#8220;targeted and capped intervention&#8221; that would support domestic refining and production, with transparency and auditing built into the scheme.<\/p>\n<p>Meanwhile, the Nigerian Government has defended the decision to discontinue the oil subsidy regime since 2023 as necessary to reduce fiscal pressure, and &#8220;free resources&#8221; for other levels of government, including state and local councils.<\/p>\n<p>The Federal Ministry of Finance recently, also disclosed the current administration&#8217;s economic reforms has generated estimated N15.8trillion in resources for the entire Federation between June 2023 and December 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>*Adetunji Ojo Ogunyemi, an economic historian, lawyer, public affairs analyst and Professor at Obafemi Awolowo University, Ile-Ife, Nigeria, warns against restoring petrol subsidy, stating besides&hellip;<\/p>\n","protected":false},"author":2,"featured_media":3939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"_FSMCFIC_featured_image_caption":"Prof. Adetunji Ojo Ogunyemi, Economic Historian, Lawyer and Public Affairs Analyst        Photo:  ProfAdetunjiOgunyemi\/LInkedIn","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","_customify_content_layout":"","_customify_sidebar":"","_customify_page_header_display":"default","_customify_disable_header":"","_customify_disable_header_top":"","_customify_disable_header_main":"","_customify_disable_header_bottom":"","_customify_disable_page_title":"","_customify_disable_content_vertical_padding":"","_customify_disable_footer_top":"","_customify_disable_footer_main":"","_customify_disable_footer_bottom":"","_customify_breadcrumb_display":"","_customify_header_transparent_display":"default","footnotes":""},"categories":[20,3,4],"tags":[],"class_list":["post-3916","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-highlights","category-infoeducation","category-markets"],"featured_image_urls":{"full":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc.png",672,365,false],"thumbnail":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc-150x150.png",150,150,true],"medium":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc-300x163.png",300,163,true],"medium_large":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc.png",672,365,false],"large":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc.png",672,365,false],"1536x1536":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc.png",672,365,false],"2048x2048":["https:\/\/consumerconnectng.com\/wp-content\/uploads\/2026\/09\/Adetunji-Ojo-Ogunyemi-cc.png",672,365,false]},"author_info":{"info":["ConsumerConnect"]},"category_info":"<a href=\"https:\/\/consumerconnectng.com\/?cat=20\" rel=\"category\">Highlights<\/a> <a href=\"https:\/\/consumerconnectng.com\/?cat=3\" rel=\"category\">InfoEducation<\/a> <a href=\"https:\/\/consumerconnectng.com\/?cat=4\" rel=\"category\">Markets<\/a>","tag_info":"Markets","comment_count":"6","_links":{"self":[{"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/posts\/3916","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3916"}],"version-history":[{"count":7,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/posts\/3916\/revisions"}],"predecessor-version":[{"id":3948,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/posts\/3916\/revisions\/3948"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=\/wp\/v2\/media\/3939"}],"wp:attachment":[{"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3916"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3916"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/consumerconnectng.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}