Nigeria is now reportedly saving over ₦10 trillion each year after the government ended its long-standing petrol subsidy, a senior senator has said, a change that supporters argue can strengthen the nation’s finances and steer money toward development.
Senator Solomon Adeola, who chairs the Senate Committee on Appropriation and represents Ogun West, made this claim during a thanksgiving event in Ogun State. He described the removal of fuel subsidy, a policy that previously required the government to borrow heavily to keep petrol prices artificially low as a major burden lifted from national finances.
According to Adeola, Nigeria used to borrow roughly ₦6–7 trillion annually just to sustain the subsidy. Now, with that obligation gone, the country does not need to divert those funds or borrow as much to bridge fiscal gaps, leading to what he called “over ₦10 trillion” in annual savings.
“I am a living testimony to what the president has done,” the senator said, referring to President Bola Tinubu’s economic reforms. “Within his two years of assumption of office, he succeeded in removing the cankerworm in our economy that has affected our finances over the years. That is, the fuel subsidy, which benefited very few Nigerians at the detriment of the overall population of this nation.”
The senator also highlighted ongoing infrastructure projects, including the ambitious Lagos-Calabar expressway and the Sokoto-Badagry highway with plans for multiple dams as examples of how the government is attempting to reinvest part of the fiscal relief into long-term development.
What the Subsidy Removal Means for the Economy
The fuel subsidy in Nigeria was officially scrapped in mid-2023, ending decades of government support that kept petrol prices below market cost. This policy had been a central feature of Nigeria’s oil economy, designed to make fuel affordable for citizens but at a steep cost to public finances, often cited as costing the government many trillions of naira annually.
Economists say removing the fuel subsidy has reduced fiscal strain and freed up budget space for public investment and debt reduction. According to a *World Bank* estimate, subsidy abolition could save Nigeria over ₦11 trillion by 2025 compared with continuing the policy, potentially boosting GDP and strengthening public finances.
Balancing Savings With Real-World Challenges
While political leaders emphasize the fiscal gains, the subsidy removal has also led to higher fuel prices, increased transport costs, and elevated inflation, prompting pushback from unions and civil society. Critics argue that without strong safety nets and transparent reinvestment of savings, ordinary Nigerians may bear the brunt of price hikes.
For supporters of the reform, cutting the subsidy is a necessary step toward a more efficient fiscal system, reducing waste and corruption linked to subsidy payments while allowing the state to prioritize infrastructure, health, education, and debt servicing in future budgets.
