Nigeria saves $20 billion through Petrol subsidy, market-based forex pricing

Nigeria’s Minister of Finance and Coordinating Minister of the Economy,Wale Edun, has revealed that Nigeria has saved $20 billion through the removal of the petrol subsidy and the adoption of market-based foreign exchange pricing.

Edun disclosed this during an event marking the first 100 days in office of Esther Walso-Jack, Head of the Civil Service of the Federation, in Abuja.

“An amount of five percent of GDP is what those two subsidies were costing,” Edun stated. “When there was a subsidy on PMS and on foreign exchange, they collectively cost five percent of GDP. Assuming GDP was $400 billion on average, five percent of that is $20 billion—funds that could now go into infrastructure, health, social services, and education.”

Also Read: Gambia, Nigeria unite for cultural diplomacy through music, others

He noted that the saved funds are now redirected into government coffers for developmental purposes. “The real change is that no one can wake up and target cheap funding or forex from the central bank to enrich themselves without adding value,” Edun said. “Similarly, profiteering from the inefficient petrol subsidy regime is no longer possible.”

President Bola Tinubu announced the end of the petrol subsidy regime on May 29. However, by August 19, the Nigerian National Petroleum Company (NNPC) Limited revealed that the federal government owed it ₦7.8 trillion for under-recovery, despite earlier denials of any subsidy reintroduction.