The Trade Union Congress (TUC) has proposed a new strategy to reduce rising fuel prices in Nigeria, urging the Federal Government to subsidise crude oil supplied to the Dangote Refinery and other modular refineries across the country.
The labour union argued that instead of reintroducing the controversial petrol subsidy regime scrapped in 2023, the government should focus on “production subsidy” by lowering the cost of crude supplied to local refineries.
TUC President Festus Osifo made the proposal during an appearance on Channels Television’s Politics Today, where he warned that the rising cost of petrol was worsening economic hardship for millions of Nigerians.
According to Osifo, the Federal Government currently earns significant excess revenue whenever global crude oil prices rise above the benchmark used in Nigeria’s national budget.
He explained that a portion of the excess earnings should be redirected toward subsidising crude feedstock for domestic refineries to enable cheaper fuel production.
“So what we proposed, knowing and understanding that they wouldn’t want to bring consumption subsidy, we were advocating for a production subsidy,” Osifo stated during the programme.
The TUC leader specifically suggested that at least half of the additional revenue earned above the national oil benchmark should be channelled into supporting local refining operations.
Under the proposal, crude oil would be sold at discounted rates to the Dangote Refinery and modular refineries, thereby reducing production costs and eventually lowering pump prices for petrol nationwide.
Osifo argued that subsidising production directly would be easier to monitor and less vulnerable to corruption compared to the old petrol subsidy system that consumed trillions of naira over the years.
“When you subsidise crude, it cannot be abused because you are subsidising production directly,” he said.
The TUC’s proposal comes amid renewed pressure on the Federal Government over rising fuel prices across Nigeria.
Petrol prices have surged significantly in recent months, with prices climbing from around ₦800 per litre in some areas to over ₦1,300 depending on location and transportation costs.
Labour leaders blame the increase partly on global oil market instability, exchange rate pressures, and the ongoing tensions involving the United States, Israel, and Iran, which have affected global energy markets.
Despite growing public complaints, the Federal Government has repeatedly ruled out returning to the previous fuel subsidy system.
Nigeria’s Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, recently reaffirmed that the government would not reintroduce petrol subsidies or impose price controls, insisting that Nigeria remains committed to market-driven reforms.
The removal of petrol subsidy by President Bola Tinubu shortly after assuming office in May 2023 triggered major economic adjustments across the country, leading to increased transportation costs, inflation, and rising living expenses.
However, government officials continue to defend the policy, arguing that subsidy payments were unsustainable and financially damaging to the economy.
The Dangote Refinery, which remains Africa’s largest single-train refinery, has increasingly become central to Nigeria’s domestic fuel supply strategy.
Industry experts believe that strengthening local refining capacity could significantly reduce Nigeria’s dependence on imported petroleum products and improve long-term energy security.
Supporters of the TUC proposal argue that subsidising local crude supply may offer a more sustainable alternative to direct fuel subsidies because it targets production costs rather than retail consumption.
Others, however, warn that any subsidy-related framework could still create transparency concerns if not properly managed and monitored.
Economic analysts also note that the proposal could reduce fuel prices temporarily but may place additional pressure on government revenues if oil prices decline globally.
The TUC further urged the Federal Government to stabilise the naira and accelerate investment in alternative energy infrastructure such as compressed natural gas (CNG) systems to reduce pressure on petrol demand.
As debates over fuel pricing and energy reforms continue, the latest proposal has added another dimension to the national conversation surrounding Nigeria’s post-subsidy economic reality.
For millions of Nigerians already battling inflation and rising transportation costs, the outcome of the government’s energy policies remains one of the country’s most closely watched economic issues.