The Federal Government of Nigeria has successfully saved a staggering N1.45 trillion from the removal of subsidies on Premium Motor Spirit, commonly known as petrol, between June and September, as reported by the Federal Accounts Allocation Committee (FAAC).
According to FAAC allocation documents obtained from the Nigeria Governors Forum and the National Bureau of Statistics, a breakdown of the figures revealed monthly remittances to the Non-Oil Revenue (Savings) account of the government.
In June, the account received N696.93 billion, followed by N389.7 billion in July, N71 billion in August, and N289 billion in September.
This substantial financial accomplishment came after President Bola Tinubu’s announcement of the removal of petrol subsidy during his inaugural address on May 29, 2023, declaring, “Subsidy is gone.”
Before the removal, the Nigerian National Petroleum Company Limited had disbursed a total of N1.828 trillion for subsidy payments from January 2023 to May 2023, marking a 55% increase compared to the same period in 2022.
In the first four months of 2023 alone, approximately N1.15 trillion was spent on subsidies, with N274.769 billion in January, N477.742 billion in February, N415.381 billion in March, and N353.130 billion in April.
President Tinubu, in a nationwide address on August 1, 2023, revealed that the government had saved N1 trillion in the two months following the subsidy removal (June and July).
He emphasized that these funds, previously susceptible to exploitation by “smugglers and fraudsters,” would now be allocated to nationwide intervention programs aimed at supporting families.
Festus Osifo, the Trade Union Congress president, raised concerns about the allocation of the saved funds.
He questioned the government’s borrowing activities, given the proclaimed savings of N1 trillion, and urged the government to transparently disburse these funds to benefit the Nigerian people.
However, the Minister of Information and National Orientation, Mohammed Idris, addressed these concerns by stating that the government had made significant savings through the subsidy removal and had passed substantial amounts to state governments to mitigate the impact of the policy on Nigerians.
He emphasized that the administration was prioritizing state governments for distributing funds as they are closer to the people.
Minister Idris explained, “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 that state governments are closer to the people than the federal. 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 substantial savings resulting from the removal of petrol subsidies are expected to have a positive impact on the Nigerian economy and help in the implementation of various social and economic programs aimed at benefiting citizens nationwide.
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