By Adeola Kunle
Nigeria’s petrol subsidy bill could have risen to approximately ₦53 trillion, while the naira exchange rate might have weakened to about ₦3,500 per dollar, if the subsidy regime had been maintained, Chairman of the Nigeria Revenue Service, Zacch Adedeji, has said.
Adedeji made the assertion during an interview on Channels Television’s Sunday Politics, where he defended the economic reforms introduced by President Bola Tinubu’s administration.
According to the NRS chairman, the removal of petrol subsidy was a necessary decision that helped prevent further deterioration of Nigeria’s finances and contributed to what he described as positive economic developments.
He argued that the government inherited an economy burdened by an unsustainable subsidy system, a poorly performing oil industry and a narrow tax base.
“All the good results that I will reel out soon come as a result of that courageous decision (subsidy removal). So, it is not a mistake; it is the best thing that has happened to this country. Subsidy was evil and had been with Nigeria for decades,” Adedeji said.
He maintained that continuing with the subsidy would have placed even greater pressure on government finances, particularly against the backdrop of fluctuations in the international energy market and the Iran crisis.
Adedeji projected that the cost of maintaining the subsidy could have climbed to about ₦53tn, while the exchange rate could have deteriorated to approximately ₦3,500 to the dollar.
The NRS chairman also defended the administration’s exchange-rate reforms, urging Nigerians to evaluate the government's economic policies based on their outcomes rather than emotions.
He challenged politicians seeking to replace the Tinubu administration in the 2027 presidential election to clearly explain what alternative measures they would adopt to address Nigeria’s economic difficulties.
“What the President deserves now is support and commendation for being a statesman and not a politician. Anybody who says he is coming (to contest as president), just ask them, ‘What will you do differently?’
“Are they saying that it is wrong that we removed fuel subsidy? Are they saying that it is wrong that we unified the rate?” he asked.
President Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, declaring that “fuel subsidy is gone.”
The policy immediately triggered a significant increase in petrol prices and contributed to rising transportation, food and production costs across the country.
At the same time, the removal of the subsidy has helped increase government revenues and boosted allocations shared among the Federal, State and Local Governments through the Federation Account.
However, the resulting increase in the cost of living remains a major concern for Nigerians, with the impact of the reform continuing to generate debate.
Adeola Kunle
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