The Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has stated that Nigeria’s petrol subsidy bill could have risen to about ₦53 trillion if President Bola Ahmed Tinubu had not removed the subsidy in 2023.
Adedeji made the disclosure during an exclusive interview on Channels Television’s Sunday Politics programme while defending the Federal Government’s economic reform.
According to him, retaining the subsidy would have imposed an unsustainable burden on the nation’s finances, particularly amid global energy market pressures and geopolitical tensions, including developments in Iran.
“The subsidy today would have been ₦53 trillion if Mr President has not removed it, given what is happening in Iran, given what is happening globally,” Adedeji said.
He further noted that the exchange rate could have weakened to around ₦3,500 to the dollar if the reform had not been implemented.
Adedeji described the subsidy regime as “evil” and unsustainable, explaining that it amounted to the government borrowing money to buy petrol at a higher price and selling it to consumers at a much lower price.
“Subsidy is not an income. It is like you are using your borrowing money to buy a product and that product is 10 naira, and you are selling it at 3 naira,” he stated.
The NRS Chairman described the removal of the petrol subsidy as the best decision taken for the Nigerian economy, insisting it was not a mistake but a courageous step that has yielded positive results.
“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,” he said.
Adedeji explained that President Tinubu inherited an economy plagued by an unsustainable subsidy regime, an opaque foreign exchange market, an underperforming oil sector, and a narrow tax base. He maintained that the reforms, including subsidy removal and exchange rate unification, were necessary to address these structural challenges.
President Tinubu announced the removal of the petrol subsidy on 29 May 2023 during his inauguration, a decision that led to a sharp increase in pump prices and higher costs of transportation, food, and production.