Govt saves N1.45tn from subsidy removal

The federal government has so far saved about N1.45tn from earnings generated from the removal of subsidy on Premium Motor Spirit, popularly called petrol between June and September.

This is according to FAAC allocation documents obtained from the website of Nigeria’s Governors Forum and National Bureau of Statistics.

An analysis showed that the funds remitted monthly to the Non-Oil Revenue (Savings) account of the government received the sum of N696.93bn in June, N389.7bn in July, N71bn in August and N289bn in September.

President Bola Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, saying, “Subsidy is gone.”

Before the removal, the Nigerian National Petroleum Company Limited said it spent N1.828tn on subsidy payments between January 2023 to May 2023 — 55 per cent higher than the amount paid in the corresponding period of 2022.

About N1.15tn was spent on subsidy in the first four months of 2023. Breakdown of the figures showed that N274.769bn was expended in January 2023, N477.742bn in February, N415.381bn in March, and N353.130bn in April, respectively.

On August 1, 2023, President Bola Tinubu, in a nationwide broadcast, revealed that the Federal Government of Nigeria has saved N1tn in the two months (June and July) since the removal of the petrol subsidy.

Tinubu said these monies that would have been otherwise squandered by those he called “smugglers and fraudsters” will now be channelled into intervention programmes targeting families nationwide.

He stated, “In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters.”

Trade Union Congress president, Festus Osifo had raised an alarm over monies claimed to have been saved by the government. Osifo asked where the money saved since subsidies were removed was.

Speaking on the matter during an interview on AriseTV, Osifo said since the government announced that N1 trillion has been saved, there is no reason to continue borrowing money, adding that FG should simply deploy part of the funds on Nigerians.

Osifo said, “The president and commander-in-chief on his own came and said the country has saved N1 trillion. The federal government went everywhere to announce that if the subsidy is removed, it’s going to save substantial money.

“And so, we don’t expect them to go everywhere and start borrowing money. They told us they were going to save money. So where is the money that you have saved and how have they deployed this money?”

Meanwhile, the Minister of Information and National Orientation, Mohammed Idris, stated that the government has made a lot of savings from the petrol subsidy removal and passed the same to state governments to assist in cushioning the effects of the policy on Nigerians.

He disclosed this at a parley with senior journalists on Monday in Abuja.

The minister who didn’t ascertain the amount saved emphasised that a lot has been passed to state governors, in that regard.

He said, “So much money has been saved since the removal of the subsidy. Some of the money that has been saved has been given to states.

“Mr President believes that state governments are closer to the people than the federal. That is why the administration has been passing funds through the governors to provide palliatives to cushion the effects of the subsidy removal.

“I cannot give the exact figure right now because it is an ongoing exercise.”