The Nigerian government has reported saving approximately N1.45 trillion over four months from the removal of subsidies on Premium Motor Spirit (PMS), commonly known as petrol. The details were extracted from documents provided by the Federal Accounts Allocation Committee (FAAC) and are available on the website of the Nigeria Governors’ Forum and the National Bureau of Statistics.
The analysis showed that the government transferred N696.93 billion to the Non-Oil Revenue (Savings) account in June, N389.7 billion in July, N71 billion in August, and N289 billion in September.
President Bola Tinubu announced the removal of petrol subsidies during his inaugural address on May 29, 2023, stating, “Subsidy is gone.”
Before the subsidy removal, the Nigerian National Petroleum Company Limited disclosed that it had spent N1.828 trillion on subsidy payments between January and May 2023, which was 55% higher than the corresponding period in 2022. Approximately N1.15 trillion was spent on subsidies in the first four months of 2023.
President Tinubu, in a nationwide broadcast on August 1, 2023, revealed that the federal government had saved N1 trillion in the two months following the removal of the petrol subsidy. He stated that these savings would be channeled into intervention programs targeting families across the nation.
The Trade Union Congress President, Festus Osifo, expressed concern over the reported savings by the government. He questioned the utilization of these funds, especially as the government had announced that substantial savings would be made by removing the subsidy.
On the other hand, the Minister of Information and National Orientation, Mohammed Idris, stated that the government had made substantial savings from the subsidy removal and had passed some of these funds to state governments to help alleviate the impact of the policy on Nigerians. He emphasized that the state governments are better positioned to address the needs of the people and that the administration had been providing funds to state governors for relief measures. However, the exact amount saved was not disclosed.
