Federal Government of Nigeria Recovers N1.45 Trillion From the Removal of Fuel Subsidy in 4 Months

Ever since President Bola Tinubu's inaugural speech on May 29th, 2023, where he said that “subsidy is gone”, the rise in the price of petrol has led to a hike in transportation fares and even the price of food items and other commodities.

However, the federal government has asked its citizens to be patient with the decision, as the funds used to subsidize fuel will be used to revive other sectors of the economy.

In the most recent news, the FG is said to have saved over N1.45 trillion between June and September from the removal of fuel subsidy. This was recorded in the FAAC allocation that was obtained from the National Bureau of Statistics and Nigeria’s Governors Forum websites.

From the records, monthly contributions to the Non-Oil Revenue (Savings) account amounted to N696.93 billion in June, N389.7 billion in July, N71 billion in August, and N289 billion in September.

Before President Bola Tinubu took office in May 2023, the Nigerian National Petroleum Company Limited spent a total of N1.828 trillion on fuel subsidy from January to May 2023, which was 55% higher than in 2022.

President Tinubu also announced that a total of N1 trillion was recovered from the removal of fuel subsidy in June and July, which he claims will be used to finance other intervention programmes benefiting families.

“In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy, which only benefitted smugglers and fraudsters,” he said.

Speaking on President Tinubu's speech, Festus Osifo, President of the Trade Union Congress (TUC), questioned the FG's claims of saving a trillion naira from the removal of fuel subsidy. He urged for transparency in making good use of the funds.

In an interview with Arise Television News, Osifo said, “The president and commander-in-chief, on his own, came and said the country has saved N1 trillion. The federal government went everywhere to announce that if the subsidy is removed, it’s going to save substantial money.”

He also advised that the government put an end to borrowing, as he claimed that the money recovered should be used to benefit Nigerians.

The Minister of Information and National Orientation, Mohammed Idris, acknowledged the removal of fuel subsidy and said that the funds recovered would be provided to state governments to ease the hardship felt by the citizens. Although he did not disclose the amount that will be reimbursed to the state governments.

He said, 

• So much money has been saved since the removal of the subsidy. Some of the money that has been saved has been given to states.

• Mr. President believes state governments are closer to the people than federal ones. That is why the administration has been passing funds through the governors to provide palliatives to cushion the effects of the subsidy removal.

• I cannot give the exact figure right now because it is an ongoing exercise.

The current price of a litre of petrol in Nigeria is N627 as of today!