IRAN CRISIS: NIGERIA’S FUEL SUBSIDY COULD HAVE HIT ₦58TN, NAIRA ₦4,500/$ WITHOUT REFORMS — ADEDEJI
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By: Muftau Fatimo
The Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, has said Nigeria’s fuel subsidy bill could have risen to as much as ₦58 trillion annually if President Bola Ahmed Tinubu had not removed the subsidy.
Adedeji made the remarks while defending the economic reforms introduced by the Tinubu administration, including the removal of the petrol subsidy and the unification of the foreign exchange market.
According to reports, the NRS chairman said the combination of rising global crude oil prices and volatility linked to the US-Iran conflict could have pushed Nigeria’s annual petrol subsidy burden to between ₦38 trillion and ₦58 trillion.
He argued that retaining the subsidy would have placed enormous pressure on government finances, potentially consuming a significant portion of the Federal Government’s budget.
Adedeji also said that without the exchange-rate reforms, the naira could have remained under severe pressure, with the parallel-market exchange rate potentially reaching between ₦3,000 and ₦4,500 to the dollar.
He described the removal of the fuel subsidy as a “fiscal necessity”, rather than simply a policy choice, insisting that the reforms helped prevent further deterioration of Nigeria’s finances and foreign-exchange position.
The NRS chairman further stated that Nigeria’s external reserves, which he put at about $34 billion, could have fallen below $2 billion had the reforms not been implemented.
Adedeji’s comments come amid continued debate over the impact of fuel subsidy removal and the government’s broader economic reforms on Nigerians.
While the government has maintained that the reforms were necessary to stabilise the economy, critics have continued to raise concerns about their impact on the cost of living and purchasing power.
The widely circulated version stating ₦53 trillion and ₦3,500/$ appears to be a simplified or altered version of the figures reported from Adedeji’s remarks. The stronger published figures I found were ₦38tn–₦58tn for potential subsidy costs and ₦3,000–₦4,500/$ for the possible parallel-market rate.
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