Nigeria urged to clearly explain the consequences of ending fuel subsidies
In Nigeria, the editorial board of Premium Times Nigeria called on the authorities to explain in greater detail how the abolition of fuel subsidies in 2024 affected revenues to the federation account and public borrowing. According to the publication, calculations presented by the Ministry of Finance do not make it possible to clearly separate the effect of ending subsidies from the impact of other reforms and changes in the oil market.
The editorial board notes that before the subsidies were abolished, these payments were accounted for by the national oil company NNPCL rather than as a separate item in the state budget. The payments were a first-line deduction from the federation account, so the actual volume of subsidies, their funding sources, and possible unpaid obligations require separate analysis, according to Premium Times.
Comparison of NNPCL reporting
The publication believes that savings should be assessed by comparing NNPCL financial statements from before 2024 with indicators for 2025. In particular, the editorial board proposes determining how much the company spent on subsidies in their final year, where those funds came from, and whether the state had outstanding debt to the company.
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The authors also drew attention to a presidential decree signed at the beginning of 2026, which ended the practice of NNPCL retaining 30% of the federation's oil revenues as payment for managing assets. The purpose of this decision was to direct additional funds to the federation account. At the same time, in the editorial board's view, it complicates the assessment of what portion of the increase in NNPCL transfers is specifically linked to the abolition of subsidies.
Borrowing and spending
The article mentions that NNPCL's audited financial statements for 2024 recorded energy security expenses of 7.1 trillion naira, compared with 4.8 trillion naira in 2023. Premium Times believes that without detailed disclosure of the relevant items, it is impossible to reliably determine the financial result of abolishing subsidies.
The editorial board also questions whether public borrowing has decreased since the reform and what share of it is directed toward capital expenditures versus the state's current needs. The discussion intensified after former vice president and African Democratic Congress presidential candidate Atiku Abubakar promised to restore subsidies if elected in the next general elections.
