Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, has stated that state governments have seen their revenues double following the removal of the petrol subsidy.
Speaking at the National Health Financing Dialogue in Abuja, Edun noted that recent economic reforms, though challenging, have been necessary to restore fiscal stability.
“Over the past two years, bold reforms have come at a cost as we repair and fix many of the broken aspects of the economy,” he said.
According to Edun, the removal of the fuel subsidy was a tough but crucial decision. “It has restored fiscal balance not just at the federal level. States now have significantly more resources—double what they had before—and can better contribute to critical sectors like healthcare and others.”
He described the petrol subsidy as a major economic distortion that primarily benefited a few individuals and even some foreign interests, while costing the nation around 2.5% of its GDP.
“When you remove that distortion, the opportunity cost becomes clear—there was simply not enough funding for investments in healthcare, education, and other essential services,” he explained. “It will take time, and it is taking time, to rebuild the investments that have been missing for years.”
President Bola Tinubu officially ended the petrol subsidy regime on May 29. Although there were later reports of a potential temporary subsidy due to rising crude prices and exchange rate volatility, the federal government maintained its position against reinstating the payments.
Nigeria fully exited subsidy payments in October 2024 after deregulating the downstream sector. Petrol pump prices at NNPC stations began reflecting market rates, surpassing ₦1,000 per litre. The Nigerian National Petroleum Company (NNPC) subsequently revealed that the federal government still owed it ₦7.8 trillion for previous under-recovery payments.
