FG: Subsidy removal saved Nigerians from ₦3,000 black market petrol
Nigerians were saved from paying over ₦3,000 per litre for petrol on the black market following the removal of fuel subsidy, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.
He disclosed this in Abuja on Wednesday, while presenting the government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented.”
According to him, the Federal Government spent ₦9.39 trillion on wage adjustments, minimum wage increases and allowances for public servants between June 2023 and December 2025 from ₦15.8 trillion saved through subsidy removal.
He said the Monetary Policy Rate rose from 18.5% to 26.5% within the period, adding that under the old system, petrol would have become increasingly scarce at the former official price and would have traded above ₦3,000 per litre on the black market.
Of the ₦15.8 trillion total subsidy savings, ₦5.4 trillion accrued to the Federal Government while ₦10.4 trillion was shared among states and local governments.
According to him, the Federal Government generated an additional ₦3.1 trillion in independent revenue, principally through remittances from government-owned entities, while incremental borrowing accounted for ₦11.9 trillion.
“Altogether, the Federal Government’s incremental resources over the period came to ₦20.4 trillion,” he said.
He explained that the resources helped to finance ₦30.64 trillion in incremental expenditure, including ₦9.39 trillion for wage adjustments, minimum wage increases and allowances, ₦9.37 trillion for external debt service arising from exchange-rate depreciation, and ₦6.5 trillion for strategic infrastructure.
He said borrowing accounted for 58 per cent of the Federal Government’s ₦20.4 trillion incremental resources, while subsidy savings contributed 27 per cent and other revenue 15 per cent.
The minister said the figures demonstrated that the removal of fuel subsidy and the unification of the foreign exchange market were not primarily designed to raise revenue, but to correct distortions that had become entrenched in the economy.
He acknowledged that the reforms imposed significant costs on Nigerians, particularly through higher fuel prices and interest rates, but argued that maintaining the pre-reform system would have exposed the economy to deeper fiscal and monetary pressures.
According to him, the reforms created fiscal space and prevented a worsening of the economic crisis.
Oyedele said the number of states unable to reliably pay salaries had fallen from 27 in May 2023 to zero, adding that government estimates indicated that at least 30 states could have been unable to meet salary obligations if the pre-reform trajectory had continued.
He also said the premium between the official and parallel foreign exchange markets, which stood above 60 per cent before the reforms, had fallen to below five per cent.
He maintained that without the reforms, the premium could have risen above 150 per cent, with foreign exchange becoming increasingly difficult to access at the official rate.
The minister further said the ₦30 trillion Ways and Means stock inherited by the administration had been curtailed instead of doubling as projected under the pre-reform trajectory.
He listed regular payment of salaries and pensions, settlement of pension arrears and the increase in the minimum wage from ₦30,000 to ₦70,000 among the benefits recorded under the reforms.
Oyedele added that the Nigerian Education Loan Fund had supported more than 1.5 million students, while cash transfers, subsidised mortgages and agricultural interventions were deployed as part of measures to cushion the effects of the reforms.
He said the new Tax Act also exempts low-income earners and small businesses from tax while simplifying the tax system.
However, the minister admitted that household welfare and poverty reduction remained areas requiring further intervention.
“Food inflation has eased from 24.82 per cent to 17.52 per cent as at June 2026, but poverty and household welfare recovery is still classified in our own scorecard as unfinished business,” he said.
The minister said headline inflation had declined to 15.91 per cent in June 2026 from 22.41 per cent in May 2023.
He also said gross external reserves increased from about $35 billion to $52.5 billion, while net reserves rose from roughly $3 billion to $34.8 billion.
Stock market capitalisation, according to him, increased from about ₦31 trillion to approximately ₦150 trillion, while real Gross Domestic Product growth strengthened to 3.89 per cent from a baseline of 2.31 per cent.
He further noted that S&P Global upgraded Nigeria’s sovereign credit rating to ‘B’ in May 2026, describing it as the country’s first upgrade in 14 years.
He said Nigeria also exited the Financial Action Task Force grey list in October 2025 and the European Union’s Anti-Money Laundering and Combating the Financing of Terrorism Deficiency List in January 2026.
Speaking, Minister of Information and National Orientation, Mohammed Idris, said the briefing was convened to provide Nigerians with information on the financial implications of the fuel subsidy removal and how the resources freed by the policy had been utilised.
He said the subsidy removal had required “sacrifices and adjustments” from individuals, families, businesses and communities, but maintained that resources previously committed to subsidising fuel consumption were being redirected towards investments intended to deliver sustainable value to Nigerians.
He said the government recognised the public interest surrounding the reform and had a responsibility to account for the resources released and their impact.
“This is fundamentally about transparency and accountability,” Idris said.
He added that the administration’s responsibility was not merely to announce policies but also to explain them, acknowledge their challenges, account for their outcomes and demonstrate how difficult decisions were intended to strengthen the economy.
