Petrol Subsidy Removal: How Nigeria’s ₦15.8tn Savings Were Shared

The Federal Government says ending the petrol subsidy freed up ₦15.8 trillion for the Federation between June 2023 and December 2025, but the money was not kept in a separate account.

The Federal Government says Nigeria saved ₦15.8 trillion between June 2023 and December 2025 after the removal of the petrol subsidy.

The figure, however, does not represent a single cash payment deposited into a government account. Instead, it refers to resources that became available to the Federation after the government stopped funding the subsidy.

According to the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the ₦15.8 trillion was distributed through the Federation Account.

Of the total, ₦5.4 trillion went to the Federal Government, while ₦10.4 trillion was shared among states and local governments.

Why Was The Petrol Subsidy Removed?

President Bola Tinubu announced the removal of the petrol subsidy on May 29, 2023, declaring that “subsidy is gone.”

The government argued that the subsidy had become too expensive and was placing increasing pressure on public finances.

Following the policy, petrol prices rose significantly, contributing to higher transportation fares, food prices, logistics costs, production expenses and household spending.

Was The ₦15.8tn The Government’s Only Additional Resource?

No.

Oyedele said the Federal Government generated an additional ₦3.1 trillion in independent revenue and borrowed ₦11.9 trillion between June 2023 and December 2025.

Overall, the government recorded ₦20.4 trillion in incremental resources during the period, while incremental expenditure stood at ₦30.64 trillion.

So, Where Did The ₦15.8tn Go?

The money was not sitting in a dedicated “subsidy savings” account.

Instead, the resources became part of the funds available to the Federation and were shared through the Federation Account:

Federal Government: ₦5.4 trillion
States and local governments: ₦10.4 trillion
Total: ₦15.8 trillion

The removal therefore gave the government greater fiscal space, while also transferring more resources to the different tiers of government.

What Does This Mean For Nigerians?

The policy helped free government resources that had previously been used to subsidise petrol. However, Nigerians also experienced the immediate impact through higher fuel prices and increased living costs.

The key issue now is whether the additional resources are being translated into improved infrastructure, public services, social programmes and economic opportunities.

Bottom line: The ₦15.8 trillion is not money sitting in a special account. It represents resources the government says were freed up after petrol subsidy payments ended and subsequently became available to the Federation.