According to FAAC Allocation Documents from the Nigeria Governors Forum and National Bureau of Statistics, the Federal Government has realized approximately ₦1.45 trillion in savings from the removal of subsidies on Premium Motor Spirit, commonly known as petrol, between June and September.
A breakdown of these savings shows that the Non-Oil Revenue (Savings) account received monthly deposits of ₦696.93 billion in June, ₦389.7 billion in July, ₦71 billion in August, and ₦289 billion in September.
The decision to remove the petrol subsidy was announced by President Bola Tinubu during his inaugural address on May 29, 2023. This move was aimed at reducing government expenditure and redirecting funds toward more productive purposes.
Before the subsidy removal, the Nigerian National Petroleum Company Limited had expended ₦1.828 trillion on subsidy payments from January 2023 to May 2023, marking a 55% increase compared to the same period in 2022. A total of ₦1.15 trillion was spent on subsidies in the first four months of 2023, with ₦274.769 billion in January, ₦477.742 billion in February, ₦415.381 billion in March, and ₦353.130 billion in April.
In a national address on August 1, 2023, President Bola Tinubu disclosed that the Federal Government had saved ₦1 trillion in just two months (June and July) following the subsidy removal. He emphasized that these funds, which would have otherwise benefited “smugglers and fraudsters,” would be redirected towards intervention programs benefiting families across the country.
Trade Union Congress president, Festus Osifo, expressed concerns about the claimed savings, urging transparency in how the saved funds were being utilized. He called for the deployment of these savings to benefit Nigerians and questioned the need for further government borrowing.
Meanwhile, Minister of Information and National Orientation, Mohammed Idris, noted that substantial savings had been achieved through the removal of the subsidy. He mentioned that a significant portion of these savings had been disbursed to state governments to help mitigate the impact of the policy on the citizens, as state governments are better positioned to provide immediate relief to their constituents. However, he did not specify the exact amount of savings, as the process was ongoing.