Arch. Peter Agada, the presidential hopeful of the [Young Progressives Party (YPP)](https://en.wikipedia.org/wiki/Young_Progressives_Party_(Nigeria)), has presented a limited‑duration fuel‑subsidy blueprint that would require roughly ₦3.2 trillion in its inaugural year, lower transport fares by as much as 45 % and push headline inflation toward 7.5 %.
**What does the scheme cover?**
The plan hinges on LIN cards issued to verified productive users – commercial buses and taxis that run on Premium Motor Spirit (PMS), haulage trucks using Automotive Gas Oil (AGO), domestic airlines that consume aviation turbine kerosene (ATK), and low‑income households reliant on kerosene. Unlike the previous universal subsidy, the new model imposes spending caps, tiered subsidy bands and an automatic sunset trigger.
**How much fuel is expected to be subsidised?**
The report released to Vanguard estimates daily subsidised volumes at 29.1 million litres, broken down into 18.96 million litres of PMS, 9.075 million litres of AGO, 735,000 litres of ATK and 315,000 litres of kerosene. At October 2026 price levels, this translates to a daily outlay of ₦11.48 billion, or ₦349 billion per month, culminating in a twelve‑month total of ₦3.20 trillion if the programme starts in July 2027.
**When will the subsidies cease?**
An automatic sunset mechanism will suspend subsidies once the ex‑gantry price drops to 45 % of the prevailing pump price, with re‑activation only if prices climb back to 55 %. The thresholds are set at:
- PMS: current ₦1,380 → sunset ₦621 → resume ₦759
- AGO: current ₦1,850 → sunset ₦832 → resume ₦1,018
- ATK: current ₦1,950 → sunset ₦878 → resume ₦1,072
- Kerosene: current ₦1,600 → sunset ₦720 → resume ₦880
Projected price trajectories, driven by domestic refining, suggest PMS ex‑gantry prices could fall from ₦1,325 to ₦470 by month 15 and near ₦300 by December 2028. Similar declines are forecast for AGO, ATK and kerosene, leading to an expected subsidy termination between the 13th and 15th months – roughly August to October 2028.
**How will abuse be prevented?**
Beneficiaries will face graduated purchase caps per LIN card. For PMS, a card allows 250 litres per cycle, with a 60 % subsidy on the first 120 litres, 80 % on the next 80 litres and 90 % on the final 50 litres; any volume beyond 250 litres will be charged at full price. AGO limits are set at 400 litres, ATK at 700 litres, and kerosene at 70 litres per month with a 20 % subsidy. The design mirrors Iran’s fuel‑card system.
**What impact is expected on transport and inflation?**
The transport‑fare index is projected to slide from 100 in July 2027 to 73 by the programme’s end, a 27 % reduction under baseline assumptions and potentially over 45 % if fuel prices reach the ₦300‑litre mark. Headline inflation, recorded at 15.39 % in August 2026 (food inflation at 19.57 %), is expected to ease to about 7.5 % as pump prices settle between ₦300 and ₦470.
A study by the [Central Bank of Nigeria](https://www.cbn.gov.ng/) indicates that a one‑percent rise in PMS prices lifts headline inflation by 0.9007 percentage points, while a similar increase in AGO adds 0.0591 points. Sustained fuel‑price cuts, therefore, should alleviate inflationary pressure.
**Will air travel become cheaper?**
Domestic airline fares are estimated to drop from an average of ₦23,500 per 100 km to ₦12,925 once ATK subsidies lapse – a 45 % reduction – with fares stabilising between ₦11,500 and ₦12,900 by February 2029.
**What supports the subsidy financially?**
The scheme relies on allocating 600,000 barrels per day of crude to local refineries under the Naira‑for‑Crude programme, adopting a 49:51 equity split for the four state‑owned refineries modelled on NLNG, auditing crude‑oil hypothecations within 30 days, enforcing Section 181 of the [Petroleum Industry Act 2021](https://en.wikipedia.org/wiki/Petroleum_Industry_Act_(Nigeria)), and targeting a daily crude production of three million barrels.
The proposal stresses that the subsidy is a temporary bridge, not a permanent fiscal commitment, stating: “It is not a permanent subsidy. It is a bridge that ends itself.”