The federal government of Nigeria has revealed substantial savings of approximately N1.45 trillion generated from the removal of subsidy on Premium Motor Spirit (PMS), commonly known as petrol, between June and September. These figures were obtained from the allocation documents of the Federation Account Allocation Committee (FAAC) accessible on the Nigeria Governors Forum and National Bureau of Statistics websites.
An in-depth analysis of the data indicated that significant sums were remitted monthly to the Non-Oil Revenue (Savings) account of the government during this period. In June, N696.93 billion was deposited, followed by N389.7 billion in July, N71 billion in August, and N289 billion in September.
The decision to eliminate the petrol subsidy was announced by President Bola Tinubu during his inaugural address on May 29, 2023, marking a significant policy shift. Before this removal, the Nigerian National Petroleum Company Limited had reported an expenditure of N1.828 trillion on subsidy payments between January 2023 and May 2023, representing a 55% increase compared to the corresponding period in 2022. Notably, about N1.15 trillion was allocated to subsidy payments in the first four months of 2023.
Breaking down these figures further, it was revealed that N274.769 billion was disbursed in January 2023, followed by N477.742 billion in February, N415.381 billion in March, and N353.130 billion in April.
On August 1, 2023, President Bola Tinubu addressed the nation and disclosed that the Federal Government had successfully saved N1 trillion in just two months, specifically in June and July, following the subsidy removal.
These substantial savings represent a major milestone in the government’s efforts to reallocate resources and enhance the nation’s financial stability. The funds can be reinvested in various critical sectors of the economy to stimulate growth, infrastructure development, and social welfare programs, thereby fostering economic resilience and prosperity in Nigeria.