At $120 oil price, fuel subsidy could have hit N52 trillion, consumed 76 per cent of budget — Adedeji

The Chairman of the Nigeria Revenue Service, Zacch Adedeji, says Nigeria’s petrol subsidy regime could have consumed as much as 76 percent of the 2026 national budget if global oil prices had reached $120 per barrel.

Adedeji made the projection on Tuesday during the inauguration of the NRS headquarters in Abuja, where he also defended the removal of fuel subsidy as a fiscal necessity aimed at strengthening the country’s economic stability.

He said the scale of potential subsidy costs would have placed an unsustainable burden on public finances.

“At an oil price benchmark of $120 per barrel, Nigeria’s annual subsidy bill could have risen to between N38 trillion and N52 trillion — consuming as much as 56 to 76 percent of the country’s N68 trillion 2026 budget,” he said.

Adedeji said the removal of the subsidy has helped ease pressure on government finances and improved key macroeconomic indicators.

“Eliminating the subsidy has freed up fiscal space, improved external reserves, and helped stabilise the country’s debt service outlook,” he said.

He maintained that the decision was necessary to prevent long-term fiscal imbalance and reduce distortions in the economy.

The NRS chairman also highlighted strong growth in government revenue following reforms in remittance systems and financial controls across public institutions.

According to him, federal collections rose from N711 billion in May 2023 to N3.63 trillion in September 2025, representing a 411 percent increase.