Subsidy Removal Saved Nigeria N15.8trn in 30 Months, Says Finance Minister Oyedele

The removal of petrol subsidy saved Nigeria N15.8 trillion between June 2023 and December 2025, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said on Wednesday. He spoke at a press conference breaking down the financial impact of the Federal Government's economic reforms under President Bola Tinubu.

Oyedele said the savings were reflected in resources available to the Federation, but did not appear as a separate credit called 'subsidy savings' in the Federation Account.

Where the subsidy savings went

'Between June 2023 and December 2025, subsidy savings mobilised the sum of N15.8 trillion in resources for the Federation,' Oyedele said.

'Many people will say, where is the subsidy savings? As a matter of fact, there wasn't any alert to the Federation Account with the description 'subsidy savings',' he said.

The Federal Government received N5.4 trillion of the N15.8 trillion, while N10.4 trillion was shared among state and local governments through the Federation Account.

Independent revenue and borrowing

The government generated N3.1 trillion in incremental independent revenue, largely from remittances by government-owned entities and increased surpluses from government agencies. It also borrowed an additional N11.9 trillion between June 2023 and December 2025.

'People will say, you said you have exceeded your revenue, why are you still borrowing?' Oyedele said. 'The additional borrowing that the Federal Government took for that period of time, June 2023 to December 2025, amounted to N11.9 trillion.'

The combination of incremental independent revenue and additional borrowing brought the Federal Government's incremental resources during the period to N20.4 trillion. However, total incremental expenditure stood at N30.64 trillion.

Reforms came at a cost

Oyedele said the figures demonstrated the fiscal implications of reforms introduced to address long-standing economic distortions and reduce pressure on government finances. He identified the removal of petrol subsidy and the unification of the foreign exchange market as key measures.

'The removal of fuel subsidy, which was quietly bankrupting the country, and the unification of an exchange rate system that had become a source of distortion and corruption rather than stability. Those decisions came at a cost, and we are not here to implement otherwise. What does reform cost?' Oyedele said.

President Tinubu announced the removal of petrol subsidy on May 29, 2023, during his inauguration, declaring that 'subsidy is gone'. The reform led to a sharp increase in petrol prices and contributed to higher transportation, logistics and production costs.

The Federal Government has consistently defended the decision as necessary to reduce fiscal pressure and redirect public resources towards other priorities. However, the policy, alongside the naira reforms, has also contributed to significant economic hardship, with households and businesses facing increased costs of transportation and essential goods. The government has since introduced measures aimed at cushioning the impact, including wage adjustments, support for agriculture and the expansion of Compressed Natural Gas initiatives as an alternative to petrol-powered transportation.

For Nigerian consumers and businesses, the numbers confirm that the subsidy savings have not translated into immediate relief. The combination of higher fuel prices, a unified exchange rate and continued borrowing means the cost of reforms is still being felt across the economy.