by Emmanuel Adebanjo
## A Practical Proposal to Reduce Transportation, Distribution and Commodity Costs Through Lower Domestic Petroleum Prices
### ADDITIONAL SECTION: WHERE IS THE BENEFIT OF SUBSIDY REMOVAL GOING?
One of the most important questions the Federal Government must answer is this:
**If the removal of the petroleum subsidy has increased the revenue available to the three tiers of government, how much of that additional revenue is actually reaching the Nigerian public?**
This question cannot be ignored.
The argument for subsidy removal was not simply that government would save money.
The broader economic argument was that removing the subsidy would free resources for government and ultimately allow those resources to be used more productively for Nigerians.
Since the reform, the fiscal space available to subnational governments has increased substantially. BudgIT’s analysis reports that state revenue rose from ₦4.84 trillion in 2022 to ₦15.53 trillion in 2025. It also notes that increased fiscal space has not necessarily been matched by corresponding improvements in service delivery.
The Federal Government’s own Accountant-General records demonstrate the scale of the Federation Account distributions. For example, in April 2025, ₦1.681 trillion in distributable Federation Account revenue was shared among the Federal Government, states and local governments, with ₦556.741 billion going to state governments and ₦406.627 billion going to local government councils.
Therefore, Nigerians have a legitimate public-policy question:
## **Where is the benefit?**
If Nigerians are paying substantially more for petrol because the subsidy has been removed, they should be able to see the corresponding public benefit from the additional fiscal resources available to government.
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# GOVERNMENT REVENUE MUST BECOME PUBLIC VALUE
The solution should not be to return automatically to an unlimited petroleum subsidy.
Instead, government should establish a clear connection between:
**Higher petroleum-related government revenue**
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**Higher allocations to government**
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**Better public investment**
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**Lower infrastructure and transportation costs**
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**Greater economic productivity**
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**Improved living conditions for Nigerians**
If the additional revenue simply accumulates within government budgets without producing visible improvements in infrastructure, transportation, healthcare, education, electricity, water, security and economic productivity, then the public will reasonably question the effectiveness of the policy.
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# STATES SHOULD NOT BE THE END OF THE MONEY’S JOURNEY
Federal allocations to state governments are not themselves a problem.
States need resources to perform their constitutional responsibilities.
The issue is what happens **after the money reaches the states**.
The public should be able to identify:
– how much each state receives;
– how much is spent;
– what projects are funded;
– how much each project costs;
– where each project is located;
– when the project should be completed;
– who is responsible for implementation; and
– whether the project was actually completed.
The citizen should not have to guess.
## MONEY SHOULD BE TRACEABLE FROM ALLOCATION TO PROJECT.
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# A NEW ACCOUNTABILITY PRINCIPLE
The Federal Government should therefore consider establishing a **Petroleum Revenue Public Benefit Account/Reporting Framework**.
This would not necessarily mean taking state revenue away from states.
Rather, it would require governments receiving increased petroleum-related revenue to demonstrate publicly how the additional fiscal space is being converted into measurable public benefits.
For example:
### Additional revenue should be connected to:
**Road rehabilitation**
**Public transportation**
**Agricultural infrastructure**
**Health facilities**
**Schools**
**Water supply**
**Electricity infrastructure**
**Industrial infrastructure**
**Rural development**
**Local economic production**
These investments can ultimately reduce the cost of living more effectively than simply distributing additional money without measurable outcomes.
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# THE PUBLIC SHOULD NOT PAY MORE AND RECEIVE LESS
This is the central concern.
If petrol becomes more expensive and transportation becomes more expensive, while governments simultaneously receive significantly more revenue, the ordinary citizen can reasonably ask:
### **What exactly am I receiving in return?**
A successful economic reform should eventually produce visible improvements.
The Nigerian people should not be told only:
**“The subsidy has been removed.”**
They should also be shown:
**“Here is what the additional public revenue has accomplished.”**
—
# DO NOT REPLACE ONE SUBSIDY WITH AN INVISIBLE SUBSIDY TO GOVERNMENT
There is another important principle here.
The purpose of economic reform should not be to transfer the burden from the Federal Government’s petroleum subsidy budget to the household budgets of ordinary Nigerians while the resulting fiscal space becomes difficult for citizens to trace.
If Nigerians are paying more at the pump, government must demonstrate that the resulting fiscal benefits are being converted into productive public investment.
Otherwise, the citizen experiences the **cost immediately**, while the promised **benefit remains invisible**.
That imbalance must be addressed.
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# LET THE BENEFIT COME DIRECTLY TO THE PEOPLE
There are two possible approaches.
### APPROACH ONE
Remove the subsidy.
Increase government revenue.
Distribute additional funds.
Hope that citizens eventually benefit.
### APPROACH TWO
Remove or reform the subsidy where necessary.
Increase government revenue.
**Track the additional revenue.**
Invest it in infrastructure and productivity.
Reduce transportation and logistics costs.
Support agriculture and manufacturing.
Publish the results.
Allow citizens to see the benefit.
## This proposal calls for the second approach.
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# PETROLEUM REVENUE SHOULD HELP REDUCE THE COST OF LIVING
The Federal Government should therefore establish measurable national targets.
For example:
**If petroleum-related revenue increases, what percentage is being invested in roads?**
**How much is being invested in public transportation?**
**How much is supporting agricultural logistics?**
**How much is improving electricity?**
**How much is supporting industrial infrastructure?**
**How much is reaching local governments for grassroots development?**
And most importantly:
### **What measurable reduction in the cost of doing business has resulted?**
These questions should be answered with published data.
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# GOVERNORS AND OTHER PUBLIC OFFICIALS MUST BE ACCOUNTABLE TO THE PUBLIC
State governments receive public funds.
Those funds are not personal property of governors or political office holders.
They are public resources.
Therefore, the public has the right to demand transparency regarding their use.
It is not enough for a state government to announce that it has received increased Federation Account allocations.
Citizens should be able to see what those resources produced.
Where a government claims that increased revenue has financed roads, schools, hospitals or other infrastructure, citizens should be able to verify those claims.
**Public money must remain public in its destination, purpose and accountability.**
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# THE FEDERAL GOVERNMENT SHOULD NOT MEASURE SUCCESS ONLY BY REVENUE
This is perhaps the most important point.
A government should not measure the success of subsidy reform simply by saying:
**“Government revenue has increased.”**
That is only the first measurement.
The more important measurements are:
– Has transportation become more affordable?
– Has food distribution become cheaper?
– Has agricultural productivity increased?
– Has local manufacturing become more competitive?
– Have roads improved?
– Has electricity improved?
– Have public services improved?
– Has household purchasing power improved?
If the answer to these questions is not sufficiently visible, then government must examine why.
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# THE NIGERIAN PEOPLE DESERVE A COMPLETE ECONOMIC CHAIN
The ultimate objective should be:
**Nigeria’s crude oil**
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**Efficient domestic refining**
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**Reasonable domestic petroleum price**
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**Lower transportation costs**
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**Lower agricultural distribution costs**
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**Lower manufacturing and logistics costs**
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**Greater production**
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**More competition**
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**Lower pressure on commodity prices**
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**Higher household purchasing power**
And alongside this:
**Petroleum-related government revenue**
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**Transparent government spending**
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**Infrastructure and public services**
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**Lower cost of doing business**
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**Greater productivity**
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**Improved standard of living**
That is the complete economic benefit Nigerians should be able to see.
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# A DIRECT QUESTION TO THE FEDERAL GOVERNMENT
The Nigerian people deserve a clear answer:
### **If the removal of the petroleum subsidy has created additional revenue for government, how much of that additional revenue has been converted into measurable benefits for the Nigerian people?**
And to the state governments:
### **If your allocations have increased, where is the corresponding improvement in the lives of the people?**
These are not political questions.
They are **public accountability questions**.
—
# THE FINAL PRINCIPLE
Nigeria should not simply move money from one government account to another and call that economic progress.
Economic progress should be visible in the real economy.
It should be visible in:
**the price of transportation,**
**the movement of food,**
**the productivity of farmers,**
**the competitiveness of manufacturers,**
**the condition of roads,**
**the availability of electricity,**
**the quality of public services,**
and ultimately:
## **THE PURCHASING POWER OF THE NIGERIAN PEOPLE.**
Nigeria’s petroleum resources should benefit Nigerians.
Government revenue should benefit Nigerians.
And public money should be traceable from the point where it is received to the point where it produces public value.
### **THE NIGERIAN PEOPLE SHOULD NOT ONLY BE TOLD THAT THEY ARE BENEFITING.**
### **THEY SHOULD BE ABLE TO SEE, MEASURE AND FEEL THE BENEFIT.**
