Makinde Answering The Wrong Question?| Remi Ladigbolu

Seyi Makinde says Nigeria has been asking the wrong question about petrol pricing.

In his latest newsletter, The Business of Governance, the Oyo State governor argues that Nigeria has spent years treating petroleum pricing as a choice between subsidising petrol and allowing Nigerians to pay the full market price.

“I believe we are asking the wrong question,” he wrote.

Makinde believes the alternative question is more fundamental. What should the right pricing framework be for an oil-producing country like Nigeria?

He wants the assumptions behind the existing framework made public, including the crude oil price benchmark, refining costs and margins, exchange-rate assumptions, logistics and distribution costs, taxes, levies and the other variables that ultimately determine what Nigerians pay at the pump.

He also rejects the argument that Nigerians should bear higher petrol prices because a price differential creates an incentive for smuggling. In his view, citizens should not be made to pay more because the government cannot adequately secure its borders.

Makinde says he will present his alternative in the coming weeks.

That is where the argument becomes considerably more interesting.

So far, Makinde has offered a diagnosis rather than a complete pricing model. He has questioned the assumptions behind the existing framework and challenged the tendency to reduce the debate to subsidy or deregulation. But until he sets out his alternative in full, it remains difficult to determine whether he is proposing a fundamentally different approach to petroleum pricing or a different set of assumptions within broadly the same market structure.

If the governor believes Nigeria has been asking the wrong question, Nigerians will reasonably want to know how his proposed approach answers the problems that the present system has struggled with.

What crude price benchmark should be used? Should it reflect international prices, domestic production costs or some combination of the two? How should refining costs be calculated when domestic refineries operate under different cost structures? What exchange rate should determine the naira value of crude and refined products? How should transportation, storage, distribution and financing costs be treated? What taxes and levies should remain in the final pump price?

And perhaps the most difficult issue is what happens when the assumptions change.

A pricing model that appears workable when crude prices are stable and the naira is relatively strong can come under severe pressure when international oil prices rise or the currency depreciates sharply. A serious national model therefore has to explain not merely how petrol should be priced under normal circumstances, but how the system should respond to volatility.

Makinde’s argument on smuggling also deserves a practical answer. If the domestic price remains substantially above that of neighbouring countries, border enforcement becomes part of the economics of the pricing system. If the governor believes Nigerians should not bear the cost of weak border controls, how would his approach address the resulting incentive to move cheaper Nigerian petrol across the borders?

These are the details that will determine whether “the right question” produces a better policy or simply a more attractive political argument.

Makinde’s intervention should, however, be considered in the context of his own professional background. He is not making the argument as someone with no connection to the oil and gas industry.

He studied Electrical Engineering at the University of Lagos and joined Shell Petroleum Development Company in 1990 as a pupil engineer. He later worked with Rebold International as a field engineer and assistant manager in its Eket operations before establishing Makon Engineering and Technical Services Limited in 1997.

His professional career therefore gave him exposure to the oil and gas industry long before he entered politics. He also belongs to professional bodies associated with engineering, automation, measurement and oil and gas design.

That background gives Makinde a legitimate basis for speaking about the petroleum industry. But experience in oil and gas engineering and services is not the same as demonstrated mastery of the national petroleum pricing architecture.

His career therefore makes the eventual proposal worth examining more closely.

What part of the industry did his work at Shell, Rebold and Makon expose him to? What did that experience teach him about regulation, pricing, refining economics and the relationship between government policy and private-sector operations? Which lessons from that career have shaped the pricing framework he says he is preparing to offer Nigeria?

Those questions become especially relevant because Makinde is no longer commenting merely as an engineer or businessman. He is presenting himself as a potential president with a national programme.

The same scrutiny should apply to his record in Oyo State.

Makinde’s administration has delivered more than physical infrastructure. Under his government, 105 rural schools covered by the World Bank-supported BESDA AF-TESS programme had undergone classroom upgrades by 2025, while more than 14,000 teaching and non-teaching staff had been recruited. More than 209 primary healthcare centres had been upgraded under Omituntun 1.0, with 264 equipped and another 106 undergoing upgrades.

The state has also pursued agricultural and industrial projects, including the 3,000-hectare Oyo State Agribusiness Transformation Centre at Eruwa. In December 2024, the first phase of an 11MW Independent Power Project was commissioned, and by the following year the state government said the Secretariat was being powered around the clock.

The administration has also invested in Ibadan Airport and its road connection. The 3.2-kilometre Airport Road was dualised as part of plans to develop the airport into an international and regional aviation hub. The state has also upgraded facilities at the airport and installed a 500,000-litre aviation fuel storage and dispensing facility. The government has described the wider project as part of its plan to develop an aerotropolis around the airport.

The choice to build up the airport infrastructure also comes against the background of Nigeria’s difficult experience with government-backed airlines. Nigeria Airways was liquidated in 2003 after years of financial and operational problems. Virgin Nigeria later stopped operations, as did Air Nigeria in 2012. Makinde’s approach has instead focused on the airport, its access roads and the infrastructure needed to support aviation activity without the state having to run an airline.

The administration is also pushing to complete the Ibadan Circular Road. The 110-kilometre road is intended to take through-traffic away from the city centre and connect major highways around Ibadan. The first 32-kilometre section has been completed and asphalted, while work continues on other sections. The project will also make land along the route more accessible for industrial, residential and logistics development.

Ibadan is Nigeria’s third most populous city and the country’s largest by geographical area, according to UNESCO. The completed circular road would shorten journeys across the city and provide easier access to areas that have been relatively difficult to reach. It could also change where businesses, housing developments and logistics operators choose to locate as the new road network takes shape.

The administration has also sought to change how Oyo saves and invests for the future. Through the Oyo State Sovereign Wealth Fund, the government created a vehicle intended to build long-term savings, attract investment and reduce dependence on federal allocations. The fund was listed by GlobalSWF among five sovereign wealth funds launched in 2025, with the state disclosing an initial cash deposit of more than $6 million and later setting a $100 million target.

OYO MEESI, writing on X as @abi4u2011, challenged Makinde’s capacity to make confident prescriptions on the petroleum industry.

“The subsidy debate is beyond your governance level @seyimakinde. Let’s keep talking about road construction at your level.”

But reducing Makinde’s record in Oyo to infrastructure alone would itself produce an incomplete assessment.

There is also evidence of fiscal performance that complicates any attempt to portray the administration simply as an infrastructure government. BudgIT’s 2025 State of States assessment ranked Oyo 11th among 35 states assessed for overall fiscal performance and seventh for debt sustainability. The state recorded ₦205.10 billion in capital expenditure and ₦447.46 billion in total expenditure in 2024, with a reported fiscal balance of ₦63.80 billion.

The figures do not prove that Makinde is ready to run Nigeria. They do show that his presidential proposition is coming from governing a substantial subnational administration, managing public finances and implementing policies across several sectors.

However, being president does not simply mean governing Oyo State with a larger budget.

The national government deals with monetary policy, external reserves, federal taxation, customs, defence, foreign exchange, debt, energy security, petroleum regulation and a political economy that stretches far beyond the experience of any single state.

Makinde’s Oyo record can demonstrate experience in governing a complex state and managing significant public resources. It cannot establish that every national prescription he makes will work.

The industry sits at the intersection of government revenue, foreign exchange, energy security, household costs, transportation, industrial production and international trade. Any change to the way petrol is priced therefore has consequences far beyond the pump.

Makinde’s promised alternative will need to address those realities when it is presented.

If domestic refining is central to his thinking, how much of the pricing advantage should be passed to consumers? If crude produced in Nigeria is used by domestic refineries, at what price should it be transferred? Should domestic refiners be required to sell at a particular benchmark? How would the government prevent a pricing formula intended to protect consumers from becoming another mechanism for transferring public resources to private operators?

If the answer involves market pricing, what would make Makinde’s approach different from the market-based system he is challenging?

If the answer involves government intervention, how would he prevent that intervention from recreating the fiscal burden associated with the subsidy regime?

These are among the issues any new pricing system would have to confront.

There is also the question of institutional credibility. A national pricing formula is only as reliable as the institutions responsible for calculating, regulating and enforcing it. If the problem with the current arrangement includes opaque assumptions, any new system will need to show not only a different formula but a transparent process for determining and reviewing it.

He has described his broader project as “Reset Nigeria”, an attempt to interrogate the systems and institutions through which the country is governed. The ambition extends far beyond petrol pricing.

Makinde has spoken with confidence about governance because governance is what he has been doing in Oyo since 2019. His engineering and business background gives him another basis for approaching national policy. His record provides evidence that he has managed a state government with substantial responsibilities and resources.

The presidential contest will therefore test those experiences against the much broader demands of running a country — and against the national policies he intends to offer.

I have supported Makinde and written positively about his administration because I believe there is substance in what has been achieved in Oyo. That support does not require suspending scrutiny. A presidential ambition built around “Reset Nigeria” should invite scrutiny precisely because the electorate will eventually have to decide whether the proposed reset is technically sound, financially sustainable and institutionally workable.

Makinde is entitled to argue that Nigeria has been asking the wrong question about petrol pricing.

He may well be right. But his diagnosis is only the beginning.

He has told Nigerians to look beyond the familiar subsidy-versus-market-price debate and examine the assumptions behind the price they pay. The next step is for him to set out what he believes should replace the present approach.

What price should Nigerians pay? Who should bear the risks when the variables change? What should government pay, what should consumers pay and what should producers and refiners earn? How should the system respond to smuggling, currency depreciation, crude price shocks and changes in domestic refining capacity?

Those answers will tell Nigerians much more about Makinde’s presidential proposition than the diagnosis in his newsletter.

The real test of “Reset Nigeria” will therefore not be the phrase itself. It will be the quality of the policies Makinde eventually places before the country.

*Ladigbolu is a journalist based in Lagos.