States’ Revenues Surge Over Twofold Post Fuel Subsidy Elimination, Says Federal Government
By Oludare Joshua
The Federal Government has announced that state revenues have significantly increased following the removal of the petrol subsidy instituted by President Bola Tinubu’s administration in May 2023.
During the National Health Financing Dialogue held in Abuja on Thursday, Coordinating Minister of Finance Wale Edun highlighted the positive outcomes of this challenging decision. He stated that the removal of the subsidy on Premium Motor Spirit (PMS) has more than doubled the financial resources available to state governments, allowing for meaningful investments in critical sectors.
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Edun pointed out that the previous subsidy regime primarily benefited a select few, including foreign entities, while consuming approximately 2.5% of the nation’s GDP. The abolition of the subsidy, he noted, has unlocked funds for essential investments in areas such as education, healthcare, and infrastructure.
Although fuel prices initially soared above ₦1,000 per litre, they have since fallen below ₦900. Edun reported a slight easing of inflation, which decreased to 21.88% in July from 22.22% in June, after peaking around 27% last year. Additionally, year-on-year food inflation also dropped to 22.74% in July, down from 39.53% during the same period last year.
Despite the discomfort caused by these reforms, Edun emphasized that they are crucial for rebuilding the economy, restoring investor confidence, and generating opportunities across various sectors.
