Economist Bismarck Rewane Advocates Refinery-Based Fuel Subsidy Model to Ease Costs for Nigerians
Renowned economist and Managing Director of Financial Derivatives Company, Bismarck Rewane, has proposed a major rethink of Nigeria’s fuel subsidy policy, calling for a refinery-focused model that channels benefits directly to consumers rather than maintaining broad-based subsidies.
Speaking on Nairametrics TV, Rewane emphasized that Nigeria’s rich oil and gas reserves, combined with its strategic geographic location, position the country to implement a more efficient subsidy framework anchored on domestic refining. According to him, such a system could stabilize fuel prices, reduce inefficiencies, and provide targeted support to households and businesses.
Under Rewane’s proposal, the government would supply crude oil to local refineries at controlled prices while ensuring that refined petroleum products reach consumers at lower rates. “It is more efficient for Nigeria to pay three or four refineries to keep going and for them to transfer the subsidies to the consumers,” he explained.
He noted that the refinery-based model would allow the government to support a limited number of domestic refiners rather than subsidizing the entire fuel supply chain. This, he argued, could serve as a middle ground between full subsidy removal and complete price controls, protecting consumers while maintaining ongoing market reforms.
The proposal comes in the wake of the government’s decision to remove the petrol subsidy, a move aimed at reducing fiscal strain and correcting distortions in the downstream petroleum sector. While subsidy removal has helped improve public finances, it has also led to rising fuel prices and inflationary pressures affecting households and businesses nationwide.
Rewane linked the model to rising global oil prices, which could provide the fiscal space needed to sustain such a system. “Nigeria is going to double its oil revenues because the price of oil has gone up. You must be able to recycle the oil windfall into the pockets of the people,” he said.
Recent analysis by the Nigerian Economic Summit Group suggested that escalating Middle East tensions could generate a potential oil revenue windfall for Nigeria, estimated at up to N30.2 trillion if the conflict between Iran and Israel continues.
Highlighting the scale of past losses, Rewane noted that according to the World Bank, Nigeria forfeited around N10 trillion in revenue due to fuel subsidies and multiple exchange rates before President Bola Tinubu’s reforms in 2022.
He concluded that a refinery-focused approach would allow the government to maintain market discipline while directly easing the financial burden on Nigerian consumers, ensuring that fuel subsidies are more targeted and efficient.