The Presidency has revealed that Nigeria is saving $7.5 billion annually following the removal of the fuel subsidy, a significant financial benefit aimed at redirecting funds to critical sectors of the economy. Sunday Dare, Special Adviser on Media and Public Communications to President Tinubu, shared this update in a recent bulletin highlighting achievements in the oil sector.
The removal of the subsidy is part of broader reforms in the sector, which also include five new executive orders signed by President Bola Tinubu, designed to unlock $2.5 billion in new oil and gas investments. Additionally, the introduction of two pricing tiers for petroleum products, one for truck transport and another for sea transport, is expected to streamline the distribution process.
Since taking office, President Tinubu announced the removal of the fuel subsidy, a move that saw the price of Premium Motor Spirit (PMS) rise from N180 to N620 per liter in 2023, and again to approximately N1,200 a year later. The subsidy removal has led to substantial savings that could be redirected toward other key sectors such as education, healthcare, and infrastructure.
While the exact amount saved remains unclear, figures such as the Minister of Finance’s recent statement about N20 trillion in savings have sparked discussions on the use of these funds and the government’s ongoing borrowing efforts to address budget shortfalls.
The full deregulation of the downstream oil sector has resulted in petrol prices now ranging from N1,200 to N1,400 per liter, depending on the location, marking a shift toward a more market-driven pricing system.
