…Now shared to States, LGs, Hold Them Accountable For Subsidy Savings
Oil Minister Heineken Lokpobiri has replied former Vice President Atiku Abubakar and Labour Party presidential candidate Peter Obi on fuel subsidy debate, advising where attention should shift.
Lokpobiri said when President Tinubu assumed office, government was projected to spend about N18.4 billion daily on fuel subsidy payments, citing figures previously presented by former Finance Minister Zainab Ahmed before National Assembly.
That would amount to approximately $15 billion annually or about N21 trillion when converted at N1,400 to dollar.
“Where would money come from? Money is expected to come from same oil sector,” he asked.
Minister said subsidy system also contributed to financial weakness of Nigerian National Petroleum Corporation before its transformation into NNPC Limited, arguing corporation had previously struggled to meet obligations, including cash calls in joint venture arrangements.
“You recall that NNPC never paid any dividend. NNPC never made any profit at all. What they were doing was shipping out crude and shipping in refined products. NNPC was sole importer of refined products,” he said.
He said situation had become unsustainable because corporation could not meet financial commitments required to maintain participation in oil production.
“If you say you own 60 per cent of business, you also have to pay 60 per cent of cost of doing that. That is cash call. But before this government came, NNPC couldn’t pay its cash call. Today, NNPC is not owing any cash call,” Lokpobiri said.
Minister also linked subsidy debate to wider fiscal position, saying debt servicing consumed large proportion of government revenue before Tinubu administration.
According to him, debt service was previously taking about 97 per cent of government income, situation he described as unsustainable because government was effectively borrowing to service existing obligations. He said ratio had subsequently fallen to about 60 per cent.
Lokpobiri argued money previously committed to fuel subsidies is no longer confined to petroleum sector but is distributed through Federation Account to federal, state and local governments.
“Today, all of you can attest to fact that for first time, at end of every month, FAAC is convened and over N2 trillion is shared every month. Some states get hundreds of billions a month,” he said.
Official figures show Federation Account allocations have indeed crossed N2 trillion mark on some occasions. In March 2026, for example, N2.036 trillion was distributed to three tiers of government, according to Federal Ministry of Finance.
But minister’s broader argument was that increased allocations should also shift burden of accountability away from Abuja alone.
“Before this government came in, 27 states could not pay salaries. Today, even poorest states have enough money, not just to pay salaries, but also to do projects.”
He argued Nigerians should therefore pay greater attention to what state and local governments do with resources they receive.
“Proceeds from subsidy removal are shared among three tiers of government: federal, state and local government. But instead of people holding their state governments accountable, their local governments accountable, everybody is looking at federal government,” he said.
Lokpobiri also rejected allegations that resources released by subsidy removal were not being properly utilised by Federal Government.
“That statement is absolutely false,” he said.
He cited programmes including Nigerian Education Loan Fund, NELFUND, CNG and clean cooking programmes as examples of interventions that demonstrate how government is deploying resources freed from old subsidy arrangement.
