Taiwo Oyedele, minister of finance and coordinating minister of the economy, says petrol subsidy savings mobilised N15.8 trillion in resources for the federation between June 2023 and December 2025.
The government, however, acknowledged that the subsidy savings did not appear in the Federation Account as a separate line item, explaining that the gains from the reforms manifested instead through increased revenue collections arising from changes in the exchange rate and the removal of subsidy-related distortions.
Oyedele spoke on Wednesday at a media conference on the scorecard of Nigeria’s reforms between 2023 and 2026.
The disclosure provides a fresh government explanation to a question that has persisted since President Bola Tinubu announced the removal of petrol subsidy in May 2023: where did the savings go?
According to Oyedele, the N15.8tn was not paid into the Federation Account under a heading described as “subsidy savings.”
Instead, he said the combined effect of the petrol subsidy removal and foreign exchange reforms increased the naira value of revenues accruing to the Federation.
“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.
“Many people will say, ‘Where is the subsidy saving?’ As a matter of fact, there wasn’t any line in the Federation Account with the description, ‘subsidy savings.’
“So, the subsidy savings showed up in the form of higher collection by Customs because, for every one dollar of import duty before, at N460, it became one dollar at N1,004, N1,003, N1,005.
“The NRS, Petroleum Profit Tax that it collected before, same dollar, higher amount in naira. So, the savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms.”
The minister said the additional fiscal resources were not generated by the petrol subsidy removal alone, arguing that the foreign exchange reforms also ended what he described as an implicit subsidy that had created opportunities for rent-seeking.
He said, “Not just the subsidy removal, but also the exchange rate flotation, because we were subsidising the exchange rate. And that subsidy was not going to the ordinary person or manufacturers. It was going to rent-seekers.”
Never miss a moment! Get the stories shaping Nigeria, delivered straight to your phone. Follow Peoplesdaily Newspaper on WhatsApp for breaking news, exclusive reports, and the headlines everyone will be talking about, before anyone else.
