Governor Nasir el-Rufai of Kaduna State has said the current fuel subsidy regime is not beneficial to Nigerians.
According to the governor, the monthly subsidy payments which cost the country over N250 billion is only to the benefit of neighbouring countries.
El-Rufai also said one of Nigeria's neighbouring countries, Cameroon shutdown its refinery because of the cheap fuel they are getting from Nigeria.
The governor spoke at the launch of the World Bank Nigeria Development Update (NDU).
"The fuel that matters to Nigerian is kerosene, it has been deregulated and the world has not collapsed. The fuel that is important to industry and transporters is diesel and it has been deregulated -- nothing has happened," el-Rufai said.
"So this hullabaloo about petrol is just something we must as a country have a conversation and agreed that it has to end, we can not continue to provide petroleum gasoline to our neighbouring country, which is what we are doing."
According to the governor, the major beneficiaries of fuel subsidy in Nigeria are smugglers, neighbouring Africa countries, and some rich people in Nigeria.
"This month, the NNPC brought only N14 billion to the federation account. In the budget, they are meant to bring in N120 billion monthly, but they brought 14 billion with the threat that they will ask the federation account to give them a cheque to cover subsidy."
"Who is befitting for the subsidising other than the smugglers, neighbouring Africa countries, and some rich people?"
"We should stop politicising these things that will bring Nigeria to its knees"
On the move to replace fuel subsidy with a N5,000 transport grant for 40 million Nigerians, the governor said it's a welcome development as the state governors are in full support.
"The Nigerian Governor Forum has met and agreed to support the federal government, withdraw this subsidy by February, and use the N250 billion per month that would have been lost between February and May to do these conditional cash transfers that would put money in the pocket of Nigerians," he said.
"To ameliorate not only cost of transportation but also the 2 to 3 percent jump in inflation that is expected when the subsidy is removed."