TUC proposes production subsidy as Festus Osifo urges Nigeria Lagos oil policy shift to slash petrol prices nationwide

The rising cost of petrol in Nigeria has once again sparked national debate, but this time the Trade Union Congress is suggesting a different approach instead of demanding the return of fuel subsidies.

TUC President Festus Osifo believes the Federal Government can ease pressure on Nigerians by supporting local refineries directly.

According to him, the country should consider introducing what he described as a “production subsidy” for refiners such as the Dangote Refinery and other modular refinery operators.

Osifo shared the proposal during an appearance on Channels Television’s Politics Today programme, where he argued that the government needs to explore practical ways to reduce fuel costs without returning to the controversial subsidy regime that was scrapped in 2023.

Why Petrol Prices Are Rising Again

Fuel prices across Nigeria have climbed sharply in recent weeks, creating fresh anxiety for households and businesses already struggling with inflation and high transportation costs.

In several states, petrol prices reportedly moved from around ₦800 per litre to nearly ₦1,300 depending on location.

Analysts say international tensions, especially the conflict involving the United States, Israel and Iran, have contributed to instability in global oil markets.

Nigeria may be one of Africa’s biggest oil producers, but the country still depends heavily on refined petroleum products.

That long-standing dependence has made local fuel prices highly sensitive to international disruptions.

The removal of fuel subsidies by President Bola Tinubu shortly after taking office in May 2023 also changed the pricing structure completely.

Since then, petrol prices have been largely determined by market realities.

TUC Suggests Redirecting Oil Revenue

Rather than restoring the old subsidy system, the TUC says the government should channel excess crude oil earnings into local refining support.

Osifo argued that Nigeria currently earns more from crude oil sales than originally projected in the national budget.

According to him, the country is making roughly $35 more per barrel than expected due to global oil market conditions.

The labour leader suggested that part of that additional revenue could be used to subsidise crude oil supplied to domestic refiners.

His argument is simple: if local refineries buy crude at lower rates, they can refine petrol more cheaply, which could eventually reduce pump prices for ordinary Nigerians.

The proposal specifically mentioned the Dangote Refinery alongside modular refineries that have gradually emerged across different parts of the country.

Dangote Refinery Remains Central to Fuel Debate

The massive refinery built by billionaire industrialist Aliko Dangote has remained at the center of conversations about Nigeria’s energy future.

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The facility, located in Lagos, is expected to significantly reduce Nigeria’s dependence on imported fuel once it reaches full operational capacity.

Supporters believe the refinery could eventually stabilise local fuel supply and conserve foreign exchange.

However, many Nigerians have questioned why fuel prices remain high despite the refinery beginning operations.

Energy experts argue that global crude prices, exchange rate fluctuations, logistics costs and deregulated market conditions continue to influence the final retail price of petrol.

Federal Government Rejects Return of Fuel Subsidy

Despite growing public pressure, the Federal Government has repeatedly stated that it will not bring back petrol subsidies.

Nigeria’s Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, recently reaffirmed the administration’s position during an event in Paris.

According to him, subsidies distort the economy and place enormous financial pressure on government spending.

He also ruled out direct price controls, insisting that the administration remains committed to market-driven reforms.

Government officials have repeatedly argued that the previous subsidy system mainly benefited smugglers and created opportunities for corruption while draining public funds.

For years, Nigeria spent trillions of naira subsidising petrol imports, even while struggling with debt and infrastructure challenges.

Nigerians Continue to Feel the Pressure

While policymakers debate solutions, ordinary Nigerians continue to face the harsh reality of rising living costs.

Transport fares have increased sharply in many cities, while food prices continue to rise due to higher logistics expenses.

Small business owners who depend on petrol-powered generators are also feeling the impact.

Labour unions have consistently warned that the removal of subsidies without sufficient economic relief measures has worsened financial hardship for millions of citizens.

The TUC believes the government must urgently introduce policies that provide immediate relief while long-term reforms continue.

Impact and Consequences

If the government adopts the TUC’s production subsidy proposal, it could potentially lower refining costs and help reduce petrol prices over time.

Supporters argue that such a move would encourage local refining, strengthen energy security and reduce dependence on imported fuel.

However, critics may question whether the plan would truly benefit consumers or simply create another subsidy system under a different name.

There are also concerns about transparency, implementation and whether savings would actually reach the average Nigerian at fuel stations.

Politically, the issue remains highly sensitive because fuel prices directly affect inflation, transportation, electricity costs and public sentiment nationwide.

What’s Next?

The Federal Government is unlikely to reverse its deregulation policy anytime soon, especially after repeatedly defending market reforms.

Still, mounting economic pressure could force authorities to consider alternative support measures similar to the TUC’s proposal.

Attention will now shift toward how quickly local refineries, including the Dangote Refinery, can increase production capacity and improve domestic fuel supply.

Labour unions are also expected to continue negotiations with government officials as Nigerians demand practical solutions to rising fuel costs.

Summary

The Trade Union Congress has proposed a new strategy aimed at reducing petrol prices without restoring the old fuel subsidy system.

TUC President Festus Osifo wants the government to use excess oil revenue to subsidise crude supplied to local refineries such as the Dangote Refinery and modular refinery operators.

The Federal Government, however, insists it will not return to fuel subsidies or impose price controls, maintaining its commitment to market-based reforms despite growing public frustration over rising living costs.

Bulleted Takeaways

• The TUC proposed a “production subsidy” instead of reintroducing fuel subsidies
• Festus Osifo suggested using excess oil revenue to support local refining
• The proposal includes the Dangote Refinery and modular refineries
• Petrol prices have risen sharply across Nigeria in recent weeks
• The Federal Government says it will not restore fuel subsidies
• Taiwo Oyedele defended market-driven economic reforms
• Nigerians continue to struggle with higher transport and living costs
• Local refining is viewed as a possible long-term solution to fuel supply challenges