Nigeria’s fuel subsidy bill could have climbed to approximately ₦53 trillion, while the naira could have weakened to ₦3,500 per dollar, if the subsidy regime had remained in place, the Chairman of the Nigeria Revenue Service, Zacch Adedeji, has said.
Adedeji made the projection while defending President Bola Tinubu’s economic reforms during an interview on Channels Television’s Sunday Politics programme.
According to him, the subsidy system had become financially unsustainable, particularly against the backdrop of weaknesses in the oil sector, a narrow tax base and mounting pressures on the economy.
He argued that retaining the policy would have placed a significantly heavier burden on government finances and worsened pressure on the foreign exchange market.
Adedeji described the removal of petrol subsidy as a major turning point for the Nigerian economy, arguing that several of the administration’s reported economic gains were linked to the decision.
He said the subsidy had existed for decades and characterised it as an unsustainable policy that had to be discontinued.
President Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, declaring that “fuel subsidy is gone.” The announcement immediately triggered a sharp increase in petrol prices, with consequential increases in transportation, food and production costs.
Since then, the policy has also increased government revenue available for distribution through the Federation Account, resulting in higher allocations to the Federal Government, states and local governments.
However, the reform has continued to carry significant consequences for households and businesses, particularly through elevated transportation and energy costs and the broader cost-of-living pressures that followed the initial fuel-price increase.
Adedeji also defended the administration’s exchange-rate reforms, including the unification of the foreign exchange market, and urged Nigerians to evaluate the policies based on their economic outcomes rather than political sentiment.
He challenged political opponents preparing for the 2027 elections to explain how they would approach the country's economic difficulties differently.
The NRS chairman maintained that the Tinubu administration should be recognised for taking decisions he described as politically difficult but economically necessary.
The subsidy removal came as the government sought to redirect resources away from petrol price support and strengthen public revenue. The reform has since remained one of the central pillars of Tinubu’s economic programme, alongside exchange-rate reforms and efforts to expand the country’s tax base.
Adedeji said the alternative scenario would have been significantly more costly, maintaining that the combination of a potentially ₦53 trillion subsidy burden and a naira exchange rate of ₦3,500/$ would have placed substantially greater pressure on the economy.
The projection, however, represents Adedeji’s assessment of what could have occurred had the subsidy regime remained in place, rather than an independently established estimate of an actual future subsidy liability.