N20.4tr Saved as Petrol Subsidy and Forex Reforms Pay Off
By Patience Ikpeme
The Federal Government has revealed that removing the petrol subsidy brought in ₦15.8 trillion between June 2023 and December 2025, providing the financial support needed to keep Nigeria’s economy standing.
Out of this money, ₦10.4 trillion went directly to state and local governments, while the Federal Government kept ₦5.4 trillion.
Speaking at the Ministry of Finance headquarters in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, explained how the government raised and spent money over the past three years.
“We invited you here today not to declare a victory, but to give an account,” Prof. Oyedele said. “Those decisions came at a real cost, and we are not here to pretend otherwise. Prices rose. The naira adjusted sharply. Households and businesses felt it, and many still do.”
The Minister explained that the ₦5.4 trillion retained by the Federal Government was part of a larger ₦20.4 trillion in new money raised over the period. This total also included ₦3.1 trillion collected from government agencies and ₦11.9 trillion raised through fresh loans.
However, total extra spending reached ₦30.64 trillion. The biggest chunk, ₦9.39 trillion, went into paying higher salaries, increasing the minimum wage, and settling workers’ allowances. Another ₦9.37 trillion was used to pay back foreign debts that became more expensive after the naira dropped in value, while ₦6.5 trillion went into road and infrastructure projects.
“It is instructive that the single largest expenditure line—wage adjustments, at ₦9.39 trillion—outstripped the Federal Government’s entire savings from subsidy removal,” Oyedele noted. “This is evidence that the reform was never introduced for revenue purposes, but to address entrenched corruption in an artificially managed fuel subsidy and foreign exchange market.”
The money given to states helped solve serious local money problems. In May 2023, 27 states could not pay salaries regularly, but today, no state owes workers’ salaries. Without these changes, government calculations show that more than 30 states would have run completely out of money by now.
The economic report also shows that Nigeria’s foreign savings grew to $52.5 billion, while main economic growth moved up to 3.89 percent. The gap between the official naira rate and the black market rate dropped from over 60 percent to less than 5 percent.
The government acknowledged that these economic changes brought heavy sacrifices for families. Petrol prices jumped from ₦185 per litre to between ₦1,100 and ₦1,400 per litre, and bank interest rates went up to fight inflation.
“Petrol at the pump has risen from roughly ₦185 a litre to between ₦1,100 and ₦1,400,” the Finance Minister said. “That is a major, felt cost, and I will not stand here and tell you otherwise. What I will say is what the counterfactual shows: on the pre-reform path, petrol would likely be simultaneously unavailable at the old official price and trading above ₦3,000 on the black market—a worse cost, paid in scarcity as well as money, with nothing gained in return.”
On food prices and daily living conditions, Oyedele added, “Food inflation has eased from 24.82 percent to 17.52 percent as at June 2026, but poverty and household welfare recovery is still classified in our own scorecard as unfinished business, not a victory lap.”
Moving forward, the Finance Ministry plans to use the stable economy to help everyday citizens directly through cash support for poor households, farming programs to bring down food costs, and new tax laws that protect small businesses and low-income earners.
