Report Shows $84bn saved from petrol subsidy now financing 40 key roads

The Federal Government has revealed that the elimination of the petrol subsidy under President Bola Tinubu has resulted in savings of over $84 billion, which are now being channelled into the construction and rehabilitation of 40 key road projects across the country over the past two years.

This was disclosed in a policy brief released by the National Orientation Agency (NOA), titled “Two Years Later: Key Benefits of Subsidy Removal,” and made available to journalists over the weekend in Abuja.

The report, which reviewed the outcomes of the subsidy removal since May 29, 2023, noted that the policy averted a looming economic crisis.

It also enabled the Tinubu administration to clear long-standing financial liabilities, increase capital investments, and support the financial stability of state governments.

The report noted that for decades—especially since the return to democratic rule—the oil subsidy regime posed a major challenge for the Federal Government.

Efforts by successive administrations to address the issue repeatedly failed, even as the economy continued to suffer significant losses. By 2015, public sentiment had shifted, with many Nigerians agreeing that the subsidy system had outlived its usefulness.
This became even more evident when the subsidy bill surged by 700 per cent in 2022, reaching an unprecedented N4 trillion.

From 2005 to 2022, successive governments spent a total of $84.39 billion on petrol subsidies.

These payments consumed more than 70 per cent of the Federal Government’s potential revenue, pushing the nation toward financial instability.
However, the report emphasised that with the decisive move to eliminate the subsidy, Nigeria is now saving billions and redirecting funds into tangible infrastructure development.

According to the National Orientation Agency, President Tinubu’s now-famous declaration,“subsidy is gone”made on his first day in office marked the beginning of difficult but necessary economic reforms.

These reforms, the agency said, have since delivered clear fiscal benefits across multiple sectors. One key impact of the subsidy removal has been the enhanced financial independence of state governments.

Source: Businessday.ng

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