After months of persistent denials, the federal government under President Bola Ahmed Tinubu has finally acknowledged that Africa’s largest oil-producing nation will allocate up to N5.4 trillion for oil subsidies in 2024.

This figure is a sharp increase from the N3.6 trillion spent in 2023 and N2.0 trillion in 2022.

The revelation came during a presentation by Wala Edun, the minister of finance and coordinating minister of the economy on an Accelerated Stabilisation and Advancement Plan (ASAP), designed to address key challenges affecting the reform initiatives and stimulate development in various sectors of the economy.

“At current rates, expenditure on fuel subsidy is projected to reach ₦5.4 trillion by the end of 2024. This compares unfavourably with ₦3.6 trillion in 2023 and ₦2.0 trillion in 2022,” a draft copy of the ASAP presented by Edun said.

The federal government had previously maintained that it would no longer subsidise fuel costs, instead opting for a deregulation policy.

In December, the government said contrary to the claim by the World Bank that the government is still paying subsidy on petrol, the era of petrol subsidy is “gone for good”.

Speaking in an interview on Channels TV, Minister of Information and National Orientation, Mohammed Idris had said President Tinubu made it clear from his first day in office that his government would not sustain the payment of subsidy on petrol.

The minister said the subsidy removal had translated to increased revenue accruing to the federation account.

“As far as I’m concerned, the President removed the subsidy and it remains removed till today. Anybody who is saying that subsidy is being paid, it is left for the person to bring the facts and then we will talk about them,” Heineken Lokpobiri, minister of state for petroleum resources (Oil) also said in April.

In April, the former governor of Kaduna State, Nasir El Rufai, said the federal government was spending more on petrol subsidy than before.

The President of the Trade Union Congress (TUC), Festus Osifo, also corroborated this in April that the Nigerian government was currently applying quasi-subsidy on fuel.

Recall that Tinubu’s ‘fuel subsidy is gone‘ statement served as a springboard for the policy implementation in June 2023, causing the pump price of the product to increase from N250 per litre to over N500, and later over N600.