Yellow danfo buses, a public means of transportation in Lagos, Nigeria
Photo by sheyi owolabi on Unsplash

In August 2026, the International Monetary Fund wrapped up its annual review of Nigeria's economy with a message that read, on the surface, like an endorsement. The Fund said strong reforms over the past three years had produced improved macroeconomic outcomes and built resilience into the economy. Nigeria's finance ministry welcomed the assessment as independent validation of its reform agenda. But buried in the same IMF statement was a harder sentence: conditions for many Nigerians remain difficult, with poverty sitting at 63 percent on the national line.

Both things are true at once, and that gap, between an improving macroeconomic picture and a population still absorbing the shock, is the real story of what happened after President Bola Tinubu removed Nigeria's petrol subsidy on his first day in office, May 29, 2023.

Why the subsidy existed, and why it ended

For decades, Nigeria sold petrol to its own citizens below the price it cost to import, a policy defended as a tangible benefit of oil wealth in a country where most people never saw oil money in any other form. By the early 2020s the subsidy had become one of the most expensive line items in the federal budget, and successive governments had tried and failed to remove it, each time backing down in the face of public anger. In January 2022, facing exactly that pressure, the Buhari government suspended a planned removal, with then finance minister Zainab Ahmed citing inflation risk and warnings from labour unions of nationwide strikes.

Tinubu went ahead anyway, declaring in his inauguration speech that the subsidy was gone. The government's case rested on numbers that were genuinely large: the World Bank estimated the subsidy was costing Nigeria roughly 2 trillion naira a year, and officials argued the money could be redirected toward health, education and infrastructure instead of flowing largely to fuel importers and smugglers moving cheap Nigerian petrol across the border.

The immediate shock

The price of petrol at the pump roughly tripled within weeks, from about 190 naira a litre before the announcement to around 540 naira a litre shortly after. The naira, pegged at roughly 461 to 471 per dollar before Tinubu's inauguration, was floated weeks later and began a slide that has not meaningfully reversed. By late July 2026, the official exchange rate was trading between 1,360 and 1,380 naira to the dollar, according to Central Bank of Nigeria data reported by local outlets, meaning the currency has lost roughly two thirds of its value against the dollar since the reforms began.

The World Bank warned at the time that removing the subsidy could push as many as 7.1 million Nigerians into poverty unless adequate compensation reached the poor. Even with cash transfers to 10 million of the most vulnerable households, the Bank's own modelling projected a net increase of 5.4 million people falling into extreme poverty, with poor households losing the equivalent of 5,700 naira a month in income. Nigeria secured an 800 million dollar World Bank facility specifically to fund that cash transfer programme.

Three years on, the numbers that matter

Petrol prices have continued to climb well past that initial jump. By late 2024, as the Dangote refinery began supplying the domestic market and the state oil company NNPC adjusted its own pricing in response, pump prices in Lagos moved into the 850 to 1,000 naira range, with prices in some northern states reported above 1,000 naira a litre.

Inflation has eased from its worst points but remains punishing. Nigeria's National Bureau of Statistics recorded headline inflation at 15.39 percent year on year in August 2026, down slightly from July, while food inflation stood at 19.57 percent, itself a retreat from a peak of 20.31 percent the month before. Those are improvements on paper, but they describe a country where food prices are still rising by roughly a fifth a year, on top of the price level the subsidy removal had already reset higher. The NBS also rebased its consumer price index during this period, adopting 2024 as the new base year, a technical change that makes exact year on year comparisons with the original 2023 shock harder to draw precisely.

The relief that was promised, and what actually arrived

The government's central answer to the transport cost crisis was the Presidential Compressed Natural Gas Initiative, meant to convert Nigeria's vehicle fleet, much of it commercial buses and taxis, away from petrol and onto cheaper domestic gas. The ambition was large: one million commercial vehicles converted by 2026, out of roughly 12 million vehicles on Nigerian roads. The delivery has been much smaller. By the end of 2024, officials said only around 100,000 vehicles had been converted, despite more than 200 million dollars already invested in the programme, and the one million vehicle target has since been pushed back to 2027. Reporting from mid-2025 described long queues and supply shortages at CNG filling stations in Abuja, with one attendant blaming inadequate delivery trucks and poor roads for the bottlenecks.

The other major relief mechanism, direct cash transfers to vulnerable households, has drawn more serious scrutiny. Nigeria's Auditor-General, in a 2024 annual report, found insufficient evidence that 33.75 billion naira in cash transfers intended for more than 3.29 million vulnerable households had actually reached those households. Opposition politician Atiku Abubakar seized on the finding to call for an independent probe, and civil society monitors, including the Africa Network for Environment and Economic Justice, reported that most verified beneficiaries were concentrated in the north of the country, raising questions about how evenly the programme reached the vulnerable households it was designed for nationwide. The National Cash Transfer Office has not publicly released updated, verified beneficiary numbers since those findings.

Did it achieve what it set out to do

Here the picture is genuinely mixed, and worth being honest about rather than flattening into a simple success or failure story. The federal government's own August 2026 scorecard, reviewed by the financial analysis firm Proshare, claimed roughly 15.8 trillion naira in subsidy savings since the reforms began. But the same scorecard showed that wage adjustments made to cushion public sector workers, combined with the exchange rate's effect on servicing Nigeria's external debt, had absorbed around 18.75 trillion naira over the same period, more than wiping out the headline savings on paper. The IMF's own position has been to urge Nigeria to hold its nerve and not reinstate the subsidy, arguing the reform has improved the functioning of the foreign exchange market and ended a costly practice of financing the deficit through money printing. The Tinubu government has publicly ruled out bringing the subsidy back.

What is not in serious dispute is who absorbed the transition. Inflation and currency depreciation hit poorer households hardest, because food and transport make up a larger share of their spending, and the compensating mechanisms, CNG conversion and cash transfers, have both underperformed their own targets and drawn credible questions about where the money actually went.

Three years after Tinubu's inauguration speech, Nigeria has a policy that international lenders broadly endorse and a population that is still, by the government's own figures, majority poor by the national measure. Both of those facts were predictable in 2023, and both were, in their own way, intended outcomes of a trade that Nigeria's leaders judged worth making. Whether it was worth making is a judgment every Nigerian household has had to render for itself, one fuel receipt at a time.

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