Nigeria’s tax chief has said the country’s petrol subsidy bill could have surged to as much as ₦58 trillion a year if the government had not removed the policy amid global oil market volatility.
Zacch Adedeji said the subsidy would have become “fiscally unsustainable” if it had remained in place during the recent rise in global crude oil prices.
He made the remarks on Tuesday in Abuja during the inauguration of the new headquarters of the Nigeria Revenue Service, where he defended key economic reforms introduced under President Bola Tinubu.
Adedeji said removing the subsidy was not a political choice but a “fiscal necessity”.
“If you had not taken that courageous decision on your first day in office, our subsidy bill today would have been between ₦38tn and ₦58tn per annum,” he said.
He added that such spending would have consumed most of Nigeria’s national budget, leaving little room for health, education and infrastructure.
“The total budget is ₦68tn. Just imagine ₦52tn going to subsidy. That is about 76% of the entire budget,” he said.
The tax chief also warned that Nigeria’s foreign reserves would have been severely affected if the policy had continued.
“Our external reserves today stand at $34bn. Without that decision, it would have been under $2bn,” he said.
Nigeria ended its long-running fuel subsidy system in 2023, a move that led to a sharp rise in petrol prices but was defended by the government as necessary to stabilise public finances.
Adedeji also said reforms in the foreign exchange market, including the unification of exchange rates, had helped reduce pressure on the naira and improve market stability.
He said fuel supply had also become more reliable as domestic refining increased, reducing the risk of prolonged scarcity.
Despite rising pump prices, he argued that petrol in Nigeria remained cheaper than in several other countries, including the United States, India and South Africa.
The event was attended by senior government officials and lawmakers, including Finance Minister Wale Edun, alongside President Tinubu.
