US-Iran War Could Have Pushed Petrol Subsidy To N58tn — NRS

The Executive Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, on Tuesday said Nigeria’s petrol subsidy bill could have risen to between N38tn and N58tn annually if the Federal Government had failed to remove the subsidy amid current global oil market volatility.

Adedeji stated this during his address at the inauguration of the new headquarters of the Nigeria Revenue Service in Abuja, where he defended key economic reforms introduced by President Bola Ahmed Tinubu since assuming office.

He described the removal of petrol subsidy as a fiscal necessity rather than a policy choice, saying the decision saved the country from unsustainable spending pressures worsened by rising global crude oil prices.

“To put it in perspective, the removal of fuel subsidy was not a policy choice, but it was a fiscal necessity,” Adedeji said.

“If you had not taken that courageous decision on your first day in office, our subsidy budget today would have been between N38tn and ₦58tn per annum.”

According to him, retaining the subsidy would have consumed as much as 76 per cent of the country’s N68tn budget recently passed by the National Assembly, leaving little room for infrastructure, healthcare, education and other development priorities.

“People may not understand that figure. The total budget passed by the National Assembly is N68tn. Just imagine N52tn out of that going to subsidy. That means about 76 per cent of the total budget would have gone to wasteful spending,” he said.

Adedeji further argued that without the reform, Nigeria’s external reserves could have plunged below $2bn.

“Our external reserves today stand at $34bn. If that decision had not been taken, reserves would have been under $2bn,” he said.

He also said debt servicing obligations would have worsened significantly, placing more strain on government finances.

The NRS chairman used the occasion to defend the administration’s foreign exchange reforms, particularly the unification of the exchange rate system. He said the move had helped narrow the gap between the official and parallel markets and improved stability in the naira market.

“The second courageous decision was the unification of the exchange rate. If nothing had been done, the official rate would still be around N460 to N700, while the parallel market would have been between N3,000 and N4,500 per dollar,” he said.

“Today, the market has become more stable and even the parallel market is losing relevance because the gap has narrowed.”

On fuel supply, Adedeji said Nigeria had avoided prolonged scarcity and queues due to reforms that encouraged local refining and increased domestic supply.

“If those decisions had not been taken, petrol supply security today would have joined the queue. Not only would it be expensive, it would still not be available,” he said.

He maintained that despite recent price increases, petrol prices in Nigeria remain lower than in many countries.

“The price in Nigeria today is still lower than what obtains in many countries. In the United States it is higher, in India it is higher, in South Africa it is higher,” he added.

Adedeji also praised President Tinubu’s leadership, describing him as “the greatest gift bestowed on this republic by Almighty God.”

He said the newly commissioned headquarters building was a symbol of the administration’s reform agenda and Nigeria’s fiscal transformation.

“This headquarters stands today as one of the tangible expressions of that reform journey, a visible and enduring symbol that reform is not abstract, but real; not temporary, but structural; not theoretical, but implemented,” he said.

The project, which he noted began about 22 years ago, was completed through policy clarity, institutional collaboration and government support.

Adedeji thanked the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the Minister of State for Finance, members of the National Assembly and other agencies for their contributions to the reform process and completion of the headquarters.

President Tinubu attended the event alongside senior government officials, lawmakers and stakeholders.

ENDS