The Nigerian federal government has successfully accrued savings of approximately N1.45 trillion between June and September by eliminating the subsidy on Premium Motor Spirit, commonly known as petrol.
This information is corroborated by FAAC allocation records sourced from the Nigeria Governors Forum and the National Bureau of Statistics.
A detailed analysis reveals monthly contributions to the Non-Oil Revenue (Savings) account, with N696.93 billion in June, N389.7 billion in July, N71 billion in August, and N289 billion in September.
The decision to remove the petrol subsidy was formally announced by President Bola Tinubu during his inaugural address on May 29, 2023.
He emphatically stated, “Subsidy is gone.” Prior to this move, the Nigerian National Petroleum Company Limited had disbursed N1.828 trillion for subsidy payments from January to May 2023, marking a 55% increase compared to the same period in 2022.
Approximately N1.15 trillion was expended on subsidies during the first four months of 2023, with a breakdown showing N274.769 billion in January, N477.742 billion in February, N415.381 billion in March, and N353.130 billion in April.
On August 1, 2023, President Bola Tinubu reported in a nationwide broadcast that the Federal Government of Nigeria had saved N1 trillion within two months following the subsidy removal in June and July.
He emphasized that these funds, previously susceptible to exploitation by “smugglers and fraudsters,” would now be redirected towards nationwide intervention programs aimed at assisting families.
Despite these announcements, Trade Union Congress President Festus Osifo expressed concern about the whereabouts of the savings claimed by the government.
He questioned the need for continued borrowing when the government had asserted that substantial funds had been saved, suggesting that these resources should be used to benefit Nigerians.
In response, the Minister of Information and National Orientation, Mohammed Idris, clarified that substantial savings had indeed been made through the subsidy removal, and a portion of these funds had been distributed to state governments to mitigate the policy’s impact on Nigerians.
He highlighted the government’s belief that state governments are better positioned to connect with the people and, therefore, funds were being channeled through the governors for providing relief measures. However, he did not specify the exact figure, as the process remains ongoing.
