Nigerian Petrol Subsidy a Key Climate Issue #AfricaClimateCrisis

Climate change financing could help solve the petrol subsidy problem while cushioning the blow for consumers, writes Teniola Tayo for the Institute for Security Studies.

Nigeria's government has said it will re-evaluate its position on petrol subsidies this month. Global economic developments and domestic challenges such as oil theft have led to a revenue crisis that makes the subsidies debilitating for the country. 

In the past, removing the subsidies led to unrest in the face of high (and rising) living costs. At current prices, it would more than double the cost of petrol and could cost politicians at the polls - situations the government would like to avoid. But there is a potential solution. Turning to climate change financing could help cushion the blow to consumers, while getting Nigeria in line with current global goals.

The global recognition that Western nations should finance developing countries' energy transition presents an opportunity for Nigeria. If the argument for removing the subsidy were to be reframed to focus on climate considerations rather than just fiscal issues, resources and investments could be raised to cushion the effects of subsidy removal.

Dealing with Nigeria's petrol subsidy challenge could align government and international partner interests. Helping consumers shift to renewable energy could solve some of the country's fiscal issues while meeting climate mitigation commitments, reports Teniola Tayo.