ABUJA, Nigeria — The Federal Government says Nigeria freed up ₦15.8 trillion in resources between June 2023 and December 2025 following the removal of the petrol subsidy, raising fresh questions about how the savings were distributed and spent.
The figure, however, does not represent ₦15.8 trillion sitting in a dedicated government account or a single pool of cash labelled “subsidy savings”.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the resources became available to the federation because the government stopped financing the petrol subsidy.
How Was the ₦15.8tn Distributed?
According to Oyedele, of the ₦15.8 trillion in resources freed by the subsidy reform, ₦5.4 trillion accrued to the Federal Government, while ₦10.4 trillion was shared among states and local governments through the Federation Account.
The distribution means the fiscal benefit of subsidy removal was spread across Nigeria’s three tiers of government rather than retained entirely by the Federal Government.
Why Did Nigeria Remove Petrol Subsidy?
President Bola Ahmed Tinubu announced the end of the petrol subsidy in his May 29, 2023 inaugural address, declaring that “subsidy is gone”.
The Tinubu administration argued that the subsidy had become increasingly expensive and was placing significant pressure on government finances.
Ending the subsidy was therefore positioned as a major fiscal reform intended to redirect public resources towards other priorities while reducing government expenditure on petrol price support.
What Happened to Petrol Prices?
The removal resulted in a sharp increase in petrol prices, with significant knock-on effects across the Nigerian economy.
Higher petrol costs contributed to increased:
- Transport fares;
- Food distribution and logistics costs;
- Business operating and production expenses; and
- Household living costs.
For many Nigerians, the immediate impact of the reform was therefore higher living expenses, even as the government gained additional fiscal space.
Was the ₦15.8tn Entirely From Subsidy Removal?
No.
Oyedele said the Federal Government also generated ₦3.1 trillion in additional independent revenue and borrowed ₦11.9 trillion between June 2023 and December 2025.
He put the Federal Government’s total incremental resources during the period at ₦20.4 trillion, compared with incremental expenditure of ₦30.64 trillion.
This distinction is important because not every additional naira available to government during the period came from petrol subsidy removal.
So, Did Government Receive ₦15.8tn in Cash?
Not as a single payment.
The ₦15.8 trillion should be understood as the estimated resources freed up for the federation by ending petrol subsidy payments, rather than money deposited into a separate “subsidy savings” account.
Part of the resources flowed through the Federation Account and was subsequently distributed among the Federal Government, states and local governments.
What Does the ₦15.8tn Mean for Nigerians?
The subsidy reform has given Nigeria greater fiscal room by reducing the government’s direct expenditure on petrol price support. However, the policy has also imposed significant costs on households and businesses through higher fuel prices and inflationary pressures.
The central policy question is therefore shifting from how much Nigeria saved to how effectively the additional fiscal space is being converted into economic growth, infrastructure, public services and improved living standards.
For Nigerians, the ultimate test of the ₦15.8 trillion savings claim will be whether the resources freed by subsidy removal translate into measurable improvements in public services and economic opportunities.
Bottom Line
Nigeria’s ₦15.8 trillion petrol subsidy savings is not a single pot of cash sitting in government coffers. It represents resources the government says became available to the federation after subsidy payments were discontinued between June 2023 and December 2025.
Of that amount, ₦5.4 trillion went to the Federal Government, while ₦10.4 trillion was shared among states and local governments through the Federation Account.
Source: Channels Television