The minister of finance and coordinating minister of the economy, Wale Edun, has stated that state revenues have doubled since the removal of the petrol subsidy.
Edun made this known on Thursday while speaking at the National Health Financing Dialogue in Abuja.
“And over the past two years, the bold reforms have come at some cost as you repair and you fix some of the things that were broken in the economy,” he said.
“So, the removal of subsidy was a tough decision but it has restored fiscal balance, not just at the federal level.
“The states have much more money, they have double the kind of funds they had before, and so they are able to provide their own contribution in this all-important area and others.”
He further noted that petrol subsidy had been a distortion “which was only benefiting a few and even benefiting foreigners, and it was gulping about 2.5 percent of GDP.”
“When you remove that, the opportunity cost was that there wasn’t enough funds for investment in healthcare, education and so forth,” he said.
“Therefore, it will take time and it is taking time to recover the kind of investments that have been lacking over the years.”
On May 29, President Bola Tinubu declared an end to the petrol subsidy regime.
Three months later, TheCable reported that Tinubu was considering a “temporary subsidy” on petrol due to surging crude oil prices and foreign exchange (FX) challenges.
Although the federal government consistently dismissed claims of a subsidy return, the Nigerian National Petroleum Company (NNPC) Limited later disclosed that the federal government owes it N7.8 trillion for under-recovery.
Nigeria fully exited subsidy payments in October 2024 after deregulating the downstream sector, which saw petrol pump prices rise above N1,000 at NNPC’s retail outlets in line with market rates.