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Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has revealed that the revenues of Nigerian states have doubled since the government removed the petrol subsidy.
Edun made the statement during the National Health Financing Dialogue held in Abuja, emphasizing the challenges and benefits of the subsidy removal.
“The removal of the subsidy was a tough decision, but it has restored fiscal balance—not just at the federal level, but also for the states,” Edun said.
“States now have much more money, double what they had before, allowing them to contribute more effectively to critical sectors like healthcare and education.”
He described the petrol subsidy as a costly economic distortion, benefiting only a few, including foreigners, while consuming about 2.5% of Nigeria’s GDP.
“Removing the subsidy meant that funds previously used to prop up fuel prices can now be redirected toward long-neglected investments,” Edun explained.
“It will take time to recover the investments in healthcare, education, and other sectors that have been lacking over the years.”
The removal of the petrol subsidy was announced by President Bola Tinubu on May 29, 2024. While there were reports of a potential temporary subsidy due to rising crude oil prices and exchange rate fluctuations, the federal government remained firm that the subsidy would not return.
In October 2024, Nigeria fully exited subsidy payments by deregulating the downstream oil sector. Petrol prices at NNPC retail outlets were adjusted to reflect market rates, surpassing ₦1,000 per litre. The Nigerian National Petroleum Company later confirmed that the federal government owed it ₦7.8 trillion in subsidy under-recoveries.
