Petrol subsidy removal nets Nigeria $84 billion, funds 40 major roads – NOA report
Lagos, June 9, 2025 — A policy explainer released by the National Orientation Agency (NOA) over the weekend reveals that Nigeria’s bold move to discontinue petrol subsidies has generated approximately $84.39 billion in federal revenue and catalyzed the construction and rehabilitation of at least 40 critical road projects nationwide over the past two years .
Since the 1980s, petroleum subsidies had been a persistent drain on government coffers. NOA reports that between 2005 and 2022, successive administrations expended $84.39 billion servicing Premium Motor Spirit (PMS) subsidies—effectively siphoning off more than 70% of potential federal income and pushing the country to the verge of insolvency .
In stark contrast, withdrawing the subsidy has engendered a fiscal reprieve. NOA indicates that the increased revenue has been channelled into crucial infrastructure and debt repayment. States and local governments have experienced a collective fiscal boom: FAAC allocations surged from ₦4.79 trillion in 2022 to ₦6.16 trillion in 2023, and then dramatically to ₦15.26 trillion in 2024—a 60% jump year-on-year—owing largely to subsidy abolition .
Consequently, sub‑national governments have reduced their domestic debts. Data from the Debt Management Office show that, from June 2023 to December 2024, state debts fell from ₦5.82 trillion to ₦3.97 trillion—reflecting N1.85 trillion in repayments within 18 months .
At the federal level, the 2025 Appropriation Act reflects this shift in fiscal strategy by allocating ₦23.96 trillion (outpacing the ₦13.64 trillion earmarked for recurrent expenditure). This marks a watershed moment, as capital expenditure now exceeds operational costs for the first time in decades .
One tangible outcome of this fiscal reallocation is the commissioning of 40 road projects, whose developments are visible across the country. These range from federal highways to strategic feeder roads enhancing connectivity and economic activity .
Analysts attribute the success of these projects to targeted investment strategies aimed at driving economic growth. However, critics caution that sustained progress will depend on transparent governance, efficient budget implementation, and ongoing maintenance efforts.
The NOA’s report paints the removal of petrol subsidy as a significant turnaround in Nigeria’s economic management. It illustrates how redirecting funds from unsustainable subsidies to developmental projects can yield measurable benefits for the country’s infrastructure and fiscal stability.
As Nigerians begin to navigate a post-subsidy landscape marked by higher pump prices, the challenge now is to ensure that the economic dividends—improved road networks, reduced debt, better services—are both sustained and equitably shared across all regions.
Let me know if you’d like deeper coverage of any specific roads, states’ experiences, or economic projections.
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