Subsidy removal, FX reforms yielded N15.8tn in 30 months – FG
August 19, 2026 1:09 pm
File photo: The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The Federal Government said on Wednesday that the removal of petrol subsidy and the unification of the foreign exchange market generated N15.8tn in additional resources for the Federation between June 2023 and December 2025, with states and local governments receiving the larger share of the amount.
The government, however, acknowledged that the subsidy savings did not appear in the Federation Account as a separate line item, explaining that the gains from the reforms manifested instead through increased revenue collections arising from changes in the exchange rate and the removal of subsidy-related distortions.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this at a media conference on Nigeria’s reform scorecard, titled, “The Benefits, Costs and Harm Prevented.”
The disclosure provides a fresh government explanation to a question that has persisted since President Bola Tinubu announced the removal of petrol subsidy in May 2023: where did the savings go?
According to Oyedele, the N15.8tn was not paid into the Federation Account under a heading described as “subsidy savings.”
Instead, he said the combined effect of the petrol subsidy removal and foreign exchange reforms increased the naira value of revenues accruing to the Federation.
“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.
“Many people will say, ‘Where is the subsidy saving?’ As a matter of fact, there wasn’t any line in the Federation Account with the description, ‘subsidy savings.’
“So, the subsidy savings showed up in the form of higher collection by Customs because, for every one dollar of import duty before, at N460, it became one dollar at N1,004, N1,003, N1,005.
“The NRS, Petroleum Profit Tax that it collected before, same dollar, higher amount in naira. So, the savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms.”
The minister said the additional fiscal resources were not generated by the petrol subsidy removal alone, arguing that the foreign exchange reforms also ended what he described as an implicit subsidy that had created opportunities for rent-seeking.
He said, “Not just the subsidy removal, but also the exchange rate flotation, because we were subsidising the exchange rate. And that subsidy was not going to the ordinary person or manufacturers. It was going to rent-seekers.”
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Damilola Aina is a journalist at Punch Newspapers with over five years of experience covering energy, business, investment, infrastructure, and property sectors. He specializes in producing well-researched and insightful reports that inform readers and provide clarity on complex topics. Damilola’s work demonstrates practical newsroom experience, editorial insight, and a strong commitment to accurate and engaging journalism.
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