Nigeria’s federal government recorded a staggering 500% increase in savings from the removal of petrol subsidies, with funds exceeding ₦7.74 trillion by May 2025, according to a report by the Ministry of Finance presented on June 9, 2025.
The surge, driven by President Bola Tinubu’s May 2023 decision to end the decades-long subsidy regime, has bolstered federal revenues, enabling investments in infrastructure like the Lagos-Calabar Coastal Highway. However, the policy, which saw petrol prices soar to ₦1,239.33 per litre by April 2025, has sparked public discontent, with labor unions and citizens decrying its impact on living costs. The report underscores Nigeria’s economic reset, balancing fiscal gains with social challenges.
The subsidy removal, announced during Tinubu’s inauguration, eliminated a system costing $10 billion annually, plagued by corruption and smuggling. The report highlights increased allocations to states, with Lagos receiving ₦150 billion for rail projects, and social interventions like N50,000 grants to 10,000 households.
Critics, including the Nigeria Labour Congress, argue the savings have not translated into tangible relief, citing 34% inflation and a weakened naira at ₦1,600 to $1. The ministry countered, noting plans to expand CNG-powered transport to offset fuel costs. Experts like Prof. Akpan Ekpo praised the fiscal discipline but urged transparent use of funds, amid allegations of mismanagement. The report, debated in the Senate, has intensified calls for palliative measures, as Tinubu’s administration navigates the subsidy’s divisive legacy.
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