So far, the federal government has been able to save almost N1.45 trillion from the money it made when the Premium Motor Spirit, or petroleum, subsidy was removed between June and September.
This is based on FAAC allocation papers that were retrieved from the National Bureau of Statistics and the Governors Forum of Nigeria’s website.
An investigation revealed that the government collected N696.93 billion in June, N389.7 billion in July, N71 billion in August, and N289 billion in September as monthly contributions to the Non-Oil Revenue (Savings) account.
“Subsidy is gone,” President Bola Tinubu declared in his inauguration speech on May 29, 2023, about the elimination of the petroleum subsidy.
The Nigerian National Petroleum Company Limited reported before to the removal that it paid N1.828 trillion in subsidies from January 2023 to May 2023, which is 55% more than it did for the same time in 2022.
Subsidies cost around N1.15 trillion in the first four months of 2023. According to a breakdown of the numbers, N274.769 billion was spent in January 2023, N477.742 billion in February, N415.381 billion in March, and N353.130 billion in April.
In a countrywide broadcast on August 1, 2023, President Bola Tinubu disclosed that the Federal Government of Nigeria had saved N1 trillion in the two months (June and July) following the elimination of the petroleum subsidy.
According to Tinubu, these funds that would have been wasted by those he referred to as “smugglers and fraudsters” would now go toward family-focused intervention programs across the country.
“In just over two months, we have prevented the waste of over a trillion Naira that would have been spent on the inefficient fuel subsidy that benefited smugglers and scammers,” he said.
Festus Osifo, the head of the Trade Union Congress, had expressed concern over money that the administration purported to have saved. Osifo questioned where the savings from the elimination of subsidies went.
Speaking on the issue in an interview with AriseTV, Osifo stated that the Federal Government should just use a portion of the money on Nigerians, adding that since the government declared that N1 trillion has been saved, there is no need to keep borrowing money.
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?”
In the meanwhile, Mohammed Idris, the Minister of Information and National Orientation, declared that the government had saved a significant amount of money by eliminating the gasoline subsidy and had given it to state governments to help lessen the impact of the policy on Nigerians.
He made this revelation on Monday in Abuja at a discussion with top journalists.
The minister underlined that a lot of it had been passed on to state governors, even if she was unsure of the precise sum saved.
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.”
