Wale Edun, minister of finance and coordinating minister of the economy, says the revenue of states have doubled since the removal of the petrol subsidy.
Edun spoke on Thursday during the National Health Financing Dialogue in Abuja.
“And over the past two years, the bold reforms have come at some cost as you repair and you fix some of the things that were broken in the economy,” he said.
“So, the removal of subsidy was a tough decision but it has restored fiscal balance, not just at the federal level.
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“The states have much more money, they have double the kind of funds they had before, and so they are able to provide their own contribution in this all-important area and others.”
Speaking further, Edun said petrol subsidy was a distortion “which was only benefiting a few and even benefiting foreigners, and it was gulping about 2.5 percent of GDP”.
“When you remove that, the opportunity cost was that there wasn’t enough funds for investment in healthcare, education and so forth,” he said.
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“Therefore, it will take time and it is taking time to recover the kind of investments that have been lacking over the years.”
On May 29, President Bola Tinubu said the petrol subsidy regime was over.
Three months later, TheCable reported that Tinubu was considering a “temporary subsidy” on petrol as crude oil prices and foreign exchange (FX) rates soared.
Although the federal government consistently denied the return of petrol subsidy, the Nigerian National Petroleum Company (NNPC) Limited later said the federal government owes it N7.8 trillion for under-recovery.
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Nigeria fully exited subsidy payments in October 2024 when the federal government deregulated the downstream sector, with petrol pump price crossing N1,000 at NNPC’s retail outlet, reflecting market prices.
