FG Saves N1.4trn from Fuel Subsidy Removal, Distributes to States

The Nigerian Federal Government has saved N1.4 trillion following the removal of subsidy on petroleum products. PEBNEWS can report that the amount was saved from earnings unspent on subsidy for Premium Motor Spirit, otherwise known as petrol between June and September 2023. This is contained in FAAC allocation documents obtained from the website of Nigeria’s Governors Forum and National Bureau of Statistics.The documents showed that 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.Recall that 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, which was 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 with a breakdown of the figures revealing that N274.769bn was expended in January 2023, N477.742bn in February, N415.381bn in March, and N353.130bn in April, respectively.Meanwhile, President Tinubu had in a nationwide broadcast on August 1 announced that the government had saved N1tn in just two months between 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.”Meanwhile, the Minister of Information and National Orientation, Mohammed Idris, announced on Monday that the government has saved a lot of money from the petrol subsidy removal and passed the same to state governments to assist in cushioning the effects of the policy on Nigerians. During a parley with journalists in Abuja, the minister 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.”