Oyo State Governor and African People’s Movement presidential candidate, Seyi Makinde, has said Nigeria’s ongoing debate over petrol subsidy is focused on the wrong issue, arguing that the country needs a new petroleum pricing framework.
Makinde made the position known in the September edition of his newsletter, The Business of Governance, uploaded on Friday.
The governor said the central issue should not simply be whether the Federal Government should restore or maintain the removal of petrol subsidy, but whether Nigeria’s current system for determining petroleum prices is appropriate for an oil-producing country.
“We are asking the wrong question. The more important question is: what is the right pricing framework for an oil-producing country like Nigeria?”
Makinde said Nigerians should have access to clear information on the factors used to determine the price of petrol at filling stations.
According to him, a transparent pricing framework should show the crude oil price benchmark, refining costs and margins, exchange-rate assumptions, logistics and distribution costs, taxes and levies, as well as other variables that contribute to the final pump price.
He argued that greater transparency would enable Nigerians to understand why petrol prices rise or fall and assess whether the pricing system provides adequate value to citizens.
Makinde also rejected the argument that Nigerians should pay higher prices for petrol to make fuel smuggling into neighbouring countries less profitable.
“We should also reject the argument that Nigerians must pay more for petroleum products simply to eliminate the price difference that makes smuggling into neighbouring countries profitable.”
The governor said Nigerians should not be made to bear the financial burden of weak border controls.
“Nigerians should not be made to bear the cost of government’s inability to secure its borders.”
Makinde said the petroleum debate should therefore focus on whether Nigerians are receiving a fair benefit from the country’s natural resources.
“The petroleum question should therefore not simply be whether subsidy should return or remain removed. It should be whether the pricing system we are using is the right one for Nigeria and whether it allows Nigerians to derive a fair benefit from the natural resources they own.”
The governor disclosed that he would present an alternative petroleum pricing framework in the coming weeks for Nigerians to examine.
His comments come amid continued public debate over petrol prices, fuel subsidy policy, domestic refining and the impact of petroleum pricing on the cost of living in Nigeria.
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