Bismarck Rewane, Managing Director of Financial Derivatives Company and a prominent economist, has endorsed a new approach to Nigeria's fuel subsidy system. During an appearance on Nairametrics TV, Rewane proposed shifting from the current import-dependent subsidy model to one that supports domestic refining. He argued that Nigeria's natural resource base and geographic position make it well-suited for a refinery-focused subsidy framework. This model, he explained, would reduce reliance on imported refined petrol and lower fuel costs for consumers. Rewane emphasized that directing subsidies to local refineries could stimulate investment, improve efficiency, and stabilize fuel supply. He cited the country's long-standing challenges with fuel scarcity and price volatility as evidence of the current system's flaws. The economist did not provide specific implementation timelines or cost estimates for the proposed model.
Bismarck Rewane's proposal exposes the absurdity of subsidizing fuel imports while domestic refineries sit underused. If the Dangote Refinery and Port Harcourt facilities operated at full capacity, a refinery-based subsidy could meaningfully reduce pump prices. But without guaranteed off-take agreements and stable gas supply, even the best-designed subsidy model will stall. This idea only works if Nigeria finally treats refining as infrastructure, not politics.
