Rewane Advocates Refinery-Based Fuel Subsidy Model

Bismarck Rewane, managing director of Financial Derivatives Company, has proposed a shift in Nigeria's fuel subsidy framework to a refinery-focused model. This recommendation aims to deliver direct benefits to consumers and improve efficiency in the downstream petroleum sector.

Rewane's proposal arises amid renewed public debate regarding fuel price inflation and the long-term effects of subsidy removal, as highlighted by President Bola Tinubu. He emphasized that Nigeria's vast oil reserves and strategic geographical location provide a solid foundation for a sustainable subsidy structure anchored in domestic refining.

Rewane insists that refineries should sell oil at a particular price to help reduce costs. He noted that the current subsidy mechanism has created fiscal leakages and that only three or four refineries are operational.

The proposal follows the removal of petrol subsidies in 2023, part of broader fiscal reforms aimed at improving government revenue and reducing budgetary strain. The World Bank estimates Nigeria loses N10 trillion annually to fuel subsidies, while the NESG projects an increase in oil revenue due to rising global prices.