The Federal Government has announced a savings of $20 billion through the removal of the petrol subsidy and the adoption of a market-based foreign exchange pricing system.
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, revealed this during an event in Abuja commemorating the first 100 days in office of Esther Walso-Jack, Head of the Civil Service of the Federation.
Edun highlighted the economic burden of the subsidies, noting they previously consumed a significant portion of the country’s resources.
“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,” he said.
He emphasized that the funds saved are being redirected towards developmental projects.
“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. Similarly, profiteering from the inefficient petrol subsidy regime is no longer possible,” he added.
President Bola Tinubu officially ended the petrol subsidy regime on May 29, 2023.
