Nigeria Saves N1.45 Trillion as Subsidy on Petrol Removal Yields Fiscal Benefits

The Nigerian federal government has reported significant fiscal gains amounting to approximately N1.45 trillion between June and September due to the removal of the subsidy on Premium Motor Spirit, commonly known as petrol.

These financial achievements were revealed through an analysis of FAAC allocation documents accessible on the Nigeria Governors Forum and National Bureau of Statistics websites.

The breakdown of the funds indicates that the Non-Oil Revenue (Savings) account received monthly remittances of N696.93 billion in June, N389.7 billion in July, N71 billion in August, and N289 billion in September.

The decision to abolish petrol subsidies was initially announced by President Bola Tinubu during his inaugural address on May 29, 2023.

The Nigerian National Petroleum Company Limited had previously disclosed that it spent N1.828 trillion on subsidy payments between January and May 2023, representing a 55% increase compared to the same period in 2022.

The initial four months of 2023 saw approximately N1.15 trillion spent on subsidies.

President Tinubu, in a national broadcast on August 1, 2023, revealed that the federal government had saved N1 trillion in the two months following the removal of petrol subsidies.

He emphasized that these funds, which would have been wasted by “smugglers and fraudsters,” would now be directed towards nationwide intervention programs, benefiting families across the country.

While the Trade Union Congress president, Festus Osifo, questioned the whereabouts of the saved funds, the Minister of Information and National Orientation, Mohammed Idris, confirmed that the government had made substantial savings from the subsidy removal and had allocated some of these funds to state governments to mitigate the policy’s impact on Nigerians.

The minister stressed the government’s commitment to providing palliatives through state governors, even though the exact amount of savings was not disclosed.