… Policy freed up funds once gulped by petrol subsidy
… Nigerians still groan under soaring cost of living
The Federal Government on Friday said the monthly allocations to state governments have doubled since the removal of petrol subsidy in May 2023.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this at the National Health Financing Dialogue in Abuja, noting that the reform, though painful, has restored fiscal balance across tiers of government.
Edun explained that prior to the reform, the subsidy regime consumed about 2.5 per cent of Nigeria’s Gross Domestic Product (GDP) while largely benefiting a few individuals and foreigners.
“The removal of subsidy was a tough decision, but it has restored fiscal balance, not just at the federal level.
“The states now have double the kind of funds they had before, enabling them to meet their obligations in critical sectors, including health and education,” he said.
The minister stressed that subsidy had deprived the country of adequate investment in healthcare, infrastructure and human capital development for years.
He added that the opportunity cost of retaining the subsidy meant that sectors crucial to Nigerians’ well-being were underfunded.
Since President Bola Tinubu announced the policy in May 2023, petrol prices jumped to over N1,000 per litre before dropping slightly to below N900 in recent weeks.
The decision triggered widespread hardship, with inflation hitting a peak of 27 per cent last year before easing to 21.88 per cent in July 2025.
Food inflation also moderated to 22.74 per cent year-on-year in July, compared to 39.53 per cent in the same period last year.
Despite the revenue surge, critics argue that states have not matched the increase in allocations with visible improvements in living standards, as poverty and unemployment continue to bite.
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